WHITE -v- STAPLES t/as JIM'S BUILDING INSPECTIONS (DUNCRAIG) [2026] WADC 49

[2026] WADC 49 [2026] WADC 49 [JM] Page 1 JURISDICTION : DISTRICT COURT OF WESTERN AUSTRALIA IN CIVIL LOCATION : PERTH CITATION : WHITE -v- STAPLES t/as JIM'S BUILDING INSPECTIONS (DUNCRAIG) [2026] WADC 49 CORAM : HERRON DCJ HEARD : 16 DECEMBER 2025 & 18 MARCH 2026 DELIVERED : 18 JUNE 2026 FILE NO/S : CIV 319 of 2025 BETWEEN : DWAYNE WHITE First Plaintiff JACINTA WHITE Second Plaintiff AND DUDLEY STAPLES t/as JIM'S BUILDING INSPECTIONS (DUNCRAIG) Defendant Catchwords: Costs - Defendant's summary judgment application dismissed by consent - Whether defendant entitled to costs of the application - Application dismissed after statement of claim amended - Factual issues requiring expert evidence raised by amended statement of claim - Real Estate Institute of Western Australia offer and acceptance contract - Australian Standard pre-purchase inspection for major structural defects - Defendant engaged as a building -- 1 of 24 -- [2026] WADC 49 [2026] WADC 49 [JM] Page 2 inspector to provide report as to whether there were any major structural defects to the residential building - Collapse of retaining wall Legislation: Nil Result: The defendant's costs of the summary judgment application appeal from the registrar's decision dismissing the application be in the cause There be no order for the plaintiffs' costs of the appeal from the registrar's decision dismissing the defendant's application for summary judgment Representation: Counsel: First Plaintiff : Mr W G Vogt Second Plaintiff : Mr W G Vogt Defendant : Mr B J Willesee Solicitors: First Plaintiff : Vogt Legal Second Plaintiff : Vogt Legal Defendant : Wotton + Kearney Lawyers (Perth) Case(s) referred to in decision(s): Kirman and Bauer as joint and several administrators of Tiger Resources Ltd (Subject to Deed of Company Arrangement) [2021] WASC 273 Simmons v Love [No 2] [2016] WASC 167 -- 2 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 3 HERRON DCJ: Introduction 1 This is an appeal pursuant to r 15(1) of the District Court Rules 2005 (WA) from the decision of Registrar Nunn made on 11 September 2025 that the defendant's application for summary judgment pursuant to O 16 r 1 of the Rules of the Supreme Court 1971 (WA) (RSC) be dismissed. 2 During the hearing of the defendant's application before me on 16 December 2025 the plaintiff sought and was granted an adjournment to file an amended statement of claim and obtain further expert evidence. When the application came back on before me for further hearing on 18 March 2026 the defendant conceded it could not succeed in its summary judgment application following the amended statement of claim1 and consented to the summary judgment application being dismissed. 3 The only issue before me on 18 March was the appropriate order for costs by reason of the dismissal of the defendant's summary judgment application. The defendant sought an order that the plaintiffs pay the defendant's costs of and incidental to its summary judgment application as appealed from the registrar, to be taxed if not agreed. The plaintiffs oppose such an order and submit the appropriate order for costs is that the defendant forthwith pay the plaintiffs' costs of and arising from the defendant's appeal to be taxed if not agreed. 4 For the reasons which follow I order the defendant's costs of his summary judgment application in the appeal from the registrar be costs in the cause, the intention being the defendant will be entitled to those costs if he is successful in the action. The plaintiffs' application for costs arising from the defendant's summary judgment application from the time of the appeal against the registrar's decision, is dismissed. 1 Plaintiffs' amended statement of claim dated 6 February 2026 (Amended Statement of Claim). The plaintiffs have since filed two further amended statements of claim each described as 'Second Amended Statement of Claim', the first filed on 14 April 2026 and the second filed on 21 April 2026. -- 3 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 4 Background 5 On 24 November 2023, Mr and Mrs White (the plaintiffs) entered into an agreement to purchase the property situated at and known as 1 Argyll Place, Duncraig (the Property) for $1,100,050.2 6 The agreement to purchase was set out in the standard form Real Estate Institute of Western Australia (REIWA) 'contract for sale of land or strata title by offer and acceptance' dated 24 November 2023 (Contract).3 7 The Contract included the REIWA Annexure A Australian Standard Pre-Purchase Inspection For Major Structural Defects (REIWA Annexure A) which by cl 9.6 and cl 9.7 of Annexure A incorporated Australian Standard AS 4349-2007.4 8 Pursuant to REIWA Annexure A: (a) the plaintiffs were entitled to engage a building inspector to prepare a report;5 (b) if the report identified major structural defects to the residential building, the plaintiffs were entitled to issue a notice;6 and (c) if the seller did not agree to fix the defects identified in the notice, the plaintiffs were entitled to terminate the Contract.7 9 On 25 November 2023, the plaintiffs entered into an agreement with the defendant whereby they would pay him $395, inclusive of GST, to conduct a structural inspection and prepare the report (Inspection Agreement).8 10 On 4 December 2023, the plaintiffs received a report prepared pursuant to the Inspection Agreement (Report).9 2 Amended Statement of Claim, pars 1.2 and 3. 3 Amended Statement of Claim, par 3(a) (Noting that the date is erroneously stated as 24 November 2024). The Contract is Annexure DCH-1 to the Affidavit of Douglas Charles Lambon Heard sworn 2 December 2025 (Heard Affidavit), commencing at page 5. 4 Amended Statement of Claim, par 5.2. 5 Amended Statement of Claim, par 6.1. 6 Amended Statement of Claim, par 6.3. 7 Amended Statement of Claim, par 6.5. 8 Amended Statement of Claim, pars 7 - 8. 9 Amended Statement of Claim, par 21. -- 4 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 5 11 The Report concluded that there were no major structural defects.10 12 In reliance on the Report, the plaintiffs did not issue a notice and proceeded to settlement on the Property.11 13 Subsequent inspections have produced reports which identify various issues with a retaining wall constructed upon the southern boundary of the Property (retaining wall).12 14 The findings of the subsequent inspections were that: (a) there were various issues with the retaining wall;13 (b) the swimming pool had subsided on the retaining wall side;14 and (c) if the retaining wall fails, it is likely to adversely affect the structure of the 'Dwelling' (ie the residential building).15 15 The plaintiffs claim the failure to report the issues with the retaining wall as a major structural defect caused the plaintiffs to proceed to settlement and, as a result, they have suffered loss and damage.16 16 The plaintiffs' claim relies on causes of action in negligence and for breach of contract in the preparation of the Report. Crucially, the loss and damage complained of is linked to an alleged loss of the right to issue a major structural defects notice upon the seller (Notice). The right to issue a Notice would only have arisen if there was a major structural defect of the building within the meaning of those terms in Annexure A to the REIWA contract for sale of land or strata title by offer and acceptance (REIWA Contract). 17 In support of his application for summary judgment the defendant submitted that on a proper construction of Annexure A to the REIWA Contract and the Australian Standard, which by cl 9.6 of Annexure A the Report was required to be performed in accordance with Appendix A of the Standard, and which by cl 9.7 of Annexure A 10 Amended Statement of Claim, par 22. 11 Amended Statement of Claim, par 23. 12 Amended Statement of Claim, pars 25 - 27. 13 Amended Statement of Claim, pars 25.1 - 25.3, 27.1 - 27.3, and 27.5. 14 Amended Statement of Claim, par 27.6. 15 Amended Statement of Claim, par 27.7. 16 Amended Statement of Claim, pars 28 - 31 and 36 - 38. -- 5 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 6 is defined as Australian Standard 4349-2007 - Inspections of buildings Pt 1: Pre-purchased structural inspection - Residential buildings, the issues with the retaining wall, even if proven, do not constitute a major structural defect of the building, being the residential building, and that therefore the claim, as pleaded, could not succeed. 18 In opposition to the defendant's application for summary judgment, the plaintiffs submit there is a dispute between the parties as to the correct construction of the REIWA Contract, REIWA Annexure A and the Standard and that in the determination of the correct contractual construction it is necessary to call expert evidence as to whether there were, at the time of purchase of the property, any 'Major Structural Defects' of the 'Building', being the residential building only pursuant to the REIWA Contract. The Contract 19 It is accepted by the parties:17 The Contract comprises: a. the Real Estate Institute of Western Australia (Inc.) (REIWA) form 810A3 contract for sale ofland [sic] or strata title by offer and acceptance 10/23; b. REIWA 2022 Joint Form of General Conditions for the Sale of Land; c. REIWA Annexure A Australian Standard Pre-Purchase Inspection For Major Structural Defects (REIWA Annexure A); d. REIWA Annexure B Australian Pre-Purchase Inspection For Termite Pests; and e. REIWA Annexure C State Government Regulations Swimming Pool/Spa, Smoke Alarm(s), RCDs. (original emphasis) The causes of action 20 The plaintiffs' causes of action are pleaded in negligence and breach of contract. As originally pleaded,18 the plaintiffs' claim was in the following terms: 17 Heard Affidavit, par 8. 18 Writ of summons with indorsed statement of claim dated 14 February 2025. -- 6 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 7 27. The Building Inspection Report noted, among other things, the following matters: 27.1. the Retaining Wall had rotated forward by up to 190 mm in parts; 27.2. significant erosion was occurring in the limestone blocks and mortar comprising the Retaining Wall; 27.3. the forward rotation movement constituted a major structural defect (major defects) as defined under AS 4349; 27.4. the swimming pool in the Property had subsided on the Retaining Wall side; 27.5. the Retaining Wall was failing; 27.6. the swimming pool of the Retaining Wall had subsided on the Retaining Wall side; and, 27.7. if the Retaining Wall fails, this is likely to adversely affect the structure of the Dwelling (collectively, the Defects); and, 27.8. as a building inspector, the Defendant was negligent in failing to inform the Plaintiffs that the Defects constituted a major structural defect (major defect) within: 27.8.1. the Jim's Building Inspection Report; 27.8.2. the 4 December Text Message; and, 27.8.3. the 4 December Telephone Message. 28. By reason of the Defendant's failure to identify the Defects and inform the Plaintiffs: 28.1. as to the existence of the Defects; or, 28.2. that the Defects constituted a major structural defect (a major defect), the Defendant failed to exercise due care, skill, and diligence and was negligent. 29. By reason of the Defendant's negligence pleaded at paragraph 28 above, the Plaintiffs proceeded to settlement in respect of the Contract, and have suffered loss and damage. -- 7 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 8 30. The Plaintiffs are now the registered owners of the Property and are required to pay for the cost of remedying the Defects within the Retaining Wall (Remedial Works). 31. By reason of the matters pleaded at the above paragraphs 29 to 30 above, the Plaintiffs have suffered loss and damage. Particulars a) The Plaintiffs have been required to engage third parties at their cost to inspect and report on any deficiencies within the Retaining Wall and to date, these costs incurred are as follows: (i) $1,500 incurred being the cost of obtaining the Building Inspection Report; and, (ii) $990 incurred being the cost of engaging an independent quantity surveyor to prepare a quantity surveying report. b) The Plaintiffs will provide full and/or further, particulars of their loss and damage prior to trial, including as to the costs of carrying out the Remedial Works. BREACH OF AGREEMENT 32. Further or alternatively, it was an express term of the Agreement that the Major Structural Defect Report complied with AS 4349.1 - 2007. 33. According to AS 4349.1 - 2007, the scope of an inspection performed under this standard involves identifying 'major defects' to the building structure. 34. A pre-purchase inspection report prepared in accordance with AS 4349.1 - 2007 must report any 'major defects' to a purchaser. 35. The Defects in the Retaining Wall constituted a major structural defect (major defect) as defined under AS 4349.1 - 2007. 36. The Defendant did not: 36.1. inform the Plaintiffs of the Defects; or, 36.2. notify the Plaintiffs that the Defects constituted a major structural defect (a major defect). 37. By virtue of the matters pleaded at paragraphs 32 to 36 above, the Defendant breached his obligations under the Agreement. (original emphasis) -- 8 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 9 21 The summary judgment application initially came on for hearing on 16 December 2025. During that hearing the plaintiffs were granted an adjournment to permit them to file an Amended Statement of Claim and any further evidence and submissions relied on in opposition to the application. Subsequently the plaintiffs filed an Amended Statement of Claim dated 6 February 2026 together with a further affidavit sworn by Mr Humphry on 6 February 2026 annexing further expert reports from a consulting engineer, Mr Brett Waddell, dated 12 September 2025, 23 October 2025 and 2 February 2026 (the Second Humphry Affidavit). 22 As earlier noted,19 since the Amended Statement of Claim was filed the plaintiffs have filed two versions of further amendments to the statement of claim described as the 'Second Amended Statement of Claim'). Relevantly, the Second Amended Statement of Claim filed on 21 April 2026 pleads: 27A. On 2 February 2026, Mr Waddell prepared a further engineer inspection report (2 February 2026 Engineer Report). In the 2 February 2026 Engineer Report, amongst other things, Mr Waddell stated that: 27A.1 it was reasonable to assume that in early-December 2023, the Retaining Wall was in the same condition as on 22 January 2024, when Mr Waddell first inspected the Retaining Wall; 27A.2 where he had found in the 9 February 2024 Report that the Retaining Wall had 'failed', this meant the Retaining Wall's lean was such that 'without substantial strengthening', the Retaining Wall would collapse. 27A.3 the Retaining Wall was critical to the structural performance and was within the zone of influence of the residence (the Dwelling); 27A.4 the Retaining Wall retained the soil on which the Dwelling was constructed; 27A.5 the Retaining Wall was part of the foundation of the Dwelling; and, 27A.6 as at early-December 2023, there were major structural defects in the Retaining Wall. 19 See footnote 1. -- 9 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 10 27B. By reason of the matters pleaded at paragraphs 24 to 27A above, when the Defendant arranged for Mr Louw to carry carried out the Pre-Purchase Inspection and prepared the Jim's Building Inspection Report, the Defects were a major structural defect of: 27B.1 the foundations of the Dwelling; and, 27B.2 the Dwelling. Causation of Loss and Damage Negligence 28. By reason of: 28.1A. the matter pleaded at paragraph 23A above; 28.2A. the Defendant's failure to identify the Defects, which he ought to have been reasonably identified during the Pre-Purchase Inspection; and, 28.3A. the failure to identify the Defects as major structural defects within the Jim's Building Inspection Report, and inform the Plaintiffs: 28.1. as to the existence of the Defects; or, 28.2. that the Defects constituted a major structural defect (a major defect), the Defendant failed to exercise due care, skill, and diligence and was negligent. Causation of Loss and Damage 29. By reason of the Defendant's negligence pleaded at paragraph 28 above, the Plaintiffs lost the opportunity that they otherwise would have had to issue a notice on the Sellers pursuant to Annexure A of the Contract to: the Plaintiffs proceeded to settlement in respect of the Contract, and have suffered loss and damage. 29.1. pursuant to Clause 3 of Annexure A, issue a major structural defects notice to require the Sellers to rectify the Defects before settlement of the Property under the Contract; or, 29.2. pursuant to Clause 8 of Annexure A, issue a notice terminating the Contract for the Sellers' non-compliance with a major structural defects notice. -- 10 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 11 29A. If the Defendant had, within the Pre-Purchase Inspection Report identified the Defects as a major structural defect, the Plaintiffs would have: 29A.1. issued a notice pursuant to Annexure A to require the Sellers to rectify the Defects before settlement of the Property under the Contract; or, 29A.2 alternatively, issued a notice pursuant to Annexure A terminating the Contract for the Sellers' non-compliance with a major structural defects notice. 29B. In the event that the Plaintiffs had issued a notice on the Sellers as set out in paragraph 29A.1 above and the Sellers did not agree to rectify the Defects, the Plaintiffs would have issued a notice pursuant to Annexure A terminating the Contract. 29C. By reason of the matters pleaded at paragraphs 29 to 29B herein, the Plaintiffs proceeded to settlement under the Contract, and did not terminate the Contract where they would have been entitled to terminate or in any case, would have terminated, where the Defendant had identified the Defects as major structural defects in the Jim's Building Inspection Report. 30. The Plaintiffs are now the registered owners of the Property and are required to pay for the cost of remedying the Defects within the Retaining Wall,. (original emphasis/strikethrough) 23 The Second Amended Statement of Claim goes on to plead that on 21 October 2025 the retaining wall partly collapsed as a result of which the plaintiffs have incurred various costs.20 The issues 24 The plaintiffs' application for an adjournment of the application and the amendments to the statement of claim were in response to the following submissions of the defendant:21 25. The plaintiffs' claim is premised on their having suffered loss by reason of the defendant's negligence or breach of contract in not advising them that the 'Defects' (as defined in the Statement of Claim) constituted a major structural defect and, as a result, their being required to proceed to settlement on the Property. 20 Second Amended Statement of Claim, pars 30E - 30G. 21 Defendant's outline of submissions dated 2 December 2025 (Defendant's outline of submissions). -- 11 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 12 26. The claim relies on the loss of a right to have issued a Notice under the Contract. No other basis is alleged to have given rise to a right to avoid the Contract or otherwise have the Defects repaired. 27. Therefore, a necessary precondition to the plaintiffs' claim is an assertion that they would or should have had a right to issue a Notice pursuant to REIWA Annexure A because of the alleged Defects. 28. The right to issue a Notice is contained in cl 4 of REIWA Annexure A and is contingent on the Report that they were entitled to obtain under cl 1 identifying Major Structural Defects to the Property's Building. 29. There are two relevant defined terms within cl 4 of REIWA Annexure A. 30. First, and crucially for this application, Building or Property's Building is defined in cl 1 of REIWA Annexure A as: the residential building and of the following described areas located upon the Property ('Building'). If nothing is completed in the blank space then the Building will be the residential Building only. (emphasis added) 31. Nothing was completed in the blank space. Accordingly, the Property's Building was confined to the residential building only. To broaden the construction would render the purpose of cl 1 of REIWA Annexure A and the right of parties to agree to a broader scope of operation inutile. 32. Secondly, Major Structural Defects is defined in cl 9.4 of REIWA Annexure A as: a fault or deviation from the intended structural performance of a building element and is a major defect to the building structure of sufficient magnitude where rectification has to be carried out in order to avoid unsafe conditions, loss of utility, or further deterioration of the building structure. Major Structural Defects does not include any non-structural element, e.g., roof plumbing and roof covering, general gas, water and sanitary plumbing, electrical wiring, partition walls, cabinetry, windows, doors, trims, fencing, minor structures, non-structural damp issues, ceiling linings, floor coverings, decorative finishes such as -- 12 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 13 plastering, painting, tiling etc., general maintenance, or spalling of masonry, fretting of mortar or rusting of primary structural elements. (emphasis added) 33. Building element is not defined in REIWA Annexure A. However, it is defined in the 'Standard' referred to in REIWA Annexure A, being AS 4349.1 2007 (Standard), as a 'portion of a building that, by itself or in combination with other such parts, fulfils a characteristic function' (emphasis added). More is said about the Standard below. 34. When these key definitions are read into the operative provision, the right to issue a Notice in cl 4 of REIWA Annexure A was contingent on the Report identifying that there was a fault or deviation from the intended structural performance of a portion of the residential building that fulfils a characteristic function and is a major defect to the structure of the residential building of sufficient magnitude where rectification has to be carried out in order to avoid unsafe conditions, loss of utility, or further deterioration of the residential building structure. The right to issue a Notice in cl 4 is not some free-standing right to issue a Notice because of concerns over the condition of any aspect of the Property. (footnotes omitted) (original emphasis) 25 The defendant further submitted:22 46. When the obligation on the Consultant preparing the Report and the right to issue a Notice under REIWA Annexure A are properly understood, the Statement of Claim contains no allegation of a defect that would have enlivened the right to issue a Notice, even if it had of been included in the Report and, therefore, no allegation that can support a right to damages. 47. Rather, the Statement of Claim is concerned with allegations that the Report should have identified issues with the Retaining Wall, being a wall on the southern boundary of the property. The images at Attachment A confirm what is implicit in the description of a retaining wall along a boundary: it is not a part of the residential building. 48. Accordingly, even if the issues with the Retaining Wall could satisfy the definition of Major Structural Defects in the abstract, a matter that would be contested at trial, they do not 22 Defendant's outline of submissions. -- 13 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 14 (and cannot) satisfy the definition of Major Structural Defects to the Property's Building when the Building is limited to the residential Building only - which is the only context in which the right to issue a Notice would have arisen. 26 In oral submissions,23 the defence submitted that: (a) even if there was a major structural defect to the retaining wall that could not be a major structural defect to the residential building as defined;24 (b) if there was a structural defect issue with the retaining wall when the Contract was entered into which may cause an issue with the foundation of the house in the future that was not a matter that needed to be reported on;25 and (c) the statement of claim did not plead that any issue with the retaining wall constituted a major structural defect to the house at the time the Contract was entered into.26 27 Expanding on these submissions, defence counsel submitted the statement of claim did not plead a cause of action based on a major structural defect to the house, rather it was based upon a defect to the retaining wall which might in time cause a major defect to the house which did not constitute a major structural defect with the house as defined in REIWA Annexure A.27 28 Counsel further submitted:28 … So for the purpose of today, it can be accepted that my client was negligent in not raising the issues with the limestone retaining wall, because that should have been done, informing an opinion regarding the general condition of the structure of the property. But in my submission, that's irrelevant. The only question of relevance is whether that would have been a major defect to the building structure. 29 Counsel later submitted in response to an observation by me as follows:29 23 Hearing 16 December 2025. 24 ts 24. 25 ts 25. 26 ts 27. 27 ts 28. 28 ts 40. 29 ts 43 - ts 44. -- 14 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 15 HERRON DCJ: So we're talking essentially here, from a factual point of view, the foundations of the house. WILLESEE, MR: Yes, your Honour, I think putting the position at its highest or best, for the plaintiffs, I think that is right. And I would accept, within the (indistinct) sort of test that despite there being reference to the footings or foundations, your Honour can infer that. As your Honour knows, where I say your Honour must stop short, is to infer that - is to give the benefit of some plea that that has, in fact, happened, rather than might happen. So that construction that I advocate for, which is the portion of a building must be an element of a building, must be part of the building, can be contrasted with the construction advanced in paragraph 29 of my friend's submissions, where he says that other such parts can include soil. And it goes on relevantly to speak to retaining walls that then retain the soil. Your Honour, I'm not sure that it needs to be said but, consistent with my construction, soil is not a portion of a building. At least not in its natural form. It is not an other such part. Soil may well be part of the site, or the property. But it is not part of the building. So when regard is had to the opening words of the definition, portion of a building, soil is out. 30 Counsel accepted that if there was an allegation that the foundations or footings of the residence had been undermined the defendant would be unable to bring a summary judgment application, but submitted the statement of claim did not plead as a material fact that at the time the Report was obtained the residence had been undermined. Rather, the statement of claim pleaded that at some time in the future the residence might be undermined if the retaining wall collapsed, which was not a matter which, on a proper construction of the terms of the Contract, constituted a 'major structural defect' to the house, ie to the 'residential building'.30 31 The defendant accepts that on its own, REIWA Annexure A is ambiguous in its terms. However, Annexure A must be read with the Australian Standard AS 4349-2007 which is incorporated into the annexure and when read with the Australian Standard there is no ambiguity in the meaning and proper construction of Annexure A, and there is no ambiguity about what is a building element of a residential building, or the house. In this case the retaining wall is not the house and there is therefore no ambiguity in the proper construction of Annexure A.31 30 ts 36, ts 44. 31 ts 49. -- 15 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 16 32 In their written outline of submissions32 the plaintiffs' principal contractual claim is that the defendant's obligation to carry out the inspection pursuant to the REIWA Contract was governed by s 3 and Appendix C of the Standard. Relevantly, their written submissions argue: 21) Clause 3.2.1 of s 3 of the Standard states that: The inspector shall inspect accessible parts of the building and appurtenances, together with relevant features of the property within 30 metres of the building, and without the boundaries of the site, or as otherwise agreed in the inspection agreement. In this context, 'relevant features' include car accommodation, detached laundry, ablution facilities in garden sheds, retaining walls more than 700 millimetres high, paths and driveway steps, fencing, earth embankments, surface water drainage, and stormwater runoff (underlining added for emphasis). 22) Clause 3.2.1 of section 3 of the Standard further provides that: a) 'the property within 30 m of the building subject to inspection' is to be inspected; and, b) 'building elements to be inspected in the nominated areas shall be in accordance with Appendix C (underlining added for emphasis)'. 23) In terms of Appendix C: a) Appendix C obligates the inspector to inspect all building elements, as listed in Tables C1 to C6 (which is a non-exhaustive list); and, b) Table C6 expressly establishes that 'Retaining walls' and 'Retaining walls supporting other structures' are building elements which are to be inspected. Application Express wording 24) The Plaintiffs submit that according to the express wording of s 3 of the Standard and Appendix A, the definition of a building element included a 'retaining wall'. This reading is consistent with the accompanying note to clause 1.4.4 of the Standard, that lists, as an example, that a building element includes a portion 'supporting' a building space. 32 Plaintiffs' outline of submissions opposing defendant's appeal dated 9 December 2025. -- 16 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 17 25) It follows that according to the express wording of the Contract, Annexure A, and the Standard: a) it was not necessary for the Plaintiffs to state in the blank space the words 'Retaining Wall'; b) the Retaining Wall is a building element and is taken to be of the Building; and, c) the Defendant was required to inspect and report on any major structural defects in the Retaining Wall. 33 In my view, there is force in the defendant's submission that the inspection the REIWA Contract required the defendant to undertake was a limited structural inspection, to which Appendix A of the Standard applies, which confines the inspection to 'identify major defects to the building structure' and not a full property inspection to which s 3 and Appendix C of the Standard applies. Therefore, s 3, including cl 3.2.1 and Appendix C of the Standard, does not apply to the limited structural inspection which, on the defendant's case, the defendant was contractually required to undertake. 34 In their oral submissions on 16 December 2025 the plaintiffs conceded that when the statement of claim was drafted, they anticipated the wall was going to fail even though it had not yet failed. However, in October 2025 the retaining wall collapsed, which was a little over a year after the Report, which is the subject of the plaintiffs' cause of action, was provided. It was accepted that as a result of the collapse of the retaining wall, the statement of claim needed to be amended. Counsel also informed the court he would seek to amend the statement of claim to plead a cause of action in negligent misstatement.33 35 It was in those circumstances the defendant's summary judgment application was adjourned. Costs - legal principles 36 The legal principles relevant to the award of costs in circumstances where an application is discontinued were summarised by Hill J in Kirman and Bauer as joint and several administrators of Tiger Resources Ltd (Subject to Deed of Company Arrangement), which I gratefully adopt:34 33 ts 52. 34 Kirman and Bauer as joint and several administrators of Tiger Resources Ltd (Subject to Deed of Company Arrangement) [2021] WASC 273 [30]. -- 17 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 18 (a) the underlying policy in the Rules of the Supreme Court 1971 (WA) in relation to a discontinuance of an application is that the discontinuing party should be liable for the other party's costs unless the court orders otherwise; (b) the conduct of the parties and the reasons for discontinuing the case can bear heavily on exercise of the discretion; (c) in determining whether the costs should be borne by the discontinuing party, the court is not to try a hypothetical action between the parties; (d) if 'it appears that both parties have acted reasonably in commencing and defending the proceedings and the conduct of the parties continued to be reasonable until the litigation was settled or its further prosecution became futile, the proper exercise of the cost discretion will usually mean that the court will make no order as to the cost of the proceedings'; (e) however, where the discontinuance 'can be said to be an acknowledgement by an applicant of likely defeat or where no objective circumstance provides reason for the discontinuance, a costs order in favour of the other party will ordinarily be made'; (f) in some cases the court may be able to form the view, with confidence, that although both parties had acted reasonably, one party was almost certain to have succeeded if the matter had been heard; (g) the reasonableness of the plaintiff's conduct in commencing and discontinuing the proceedings is relevant and must be considered in the context of the policy in (a); and (h) it is relevant to consider whether there has been a supervening act which has rendered the application futile. (citations omitted) 37 To those principles can be added the general rule that, where a party amends its pleading, the other party is usually entitled to the costs thrown away or wasted by the amendment: Simmons v Love [No 2].35 35 Simmons v Love [No 2] [2016] WASC 167 [58] - [64]. -- 18 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 19 Defendant's submissions as to costs 38 The defendant submits: 1. The changes made to the Amended Statement of Claim were not made: (a) during the conferral process prior to the application for summary judgment being made; or (b) following the defendant's detailed written submissions filed in support of the application. 2. Rather they were made: (a) following, and as a result of, oral submissions and exchanges between counsel and the court regarding the state of the statement of claim; and (b) to directly respond to criticisms made of the pleading by the defendant and the matters raised by the court during the hearing on 16 December 2025. 39 In particular, it is submitted that the new pleading in par 27A.5 of the Second Amended Statement of Claim,36 that the retaining wall was part of the foundation of the dwelling, meaning the building for the purposes of the REIWA Contract is a materially different allegation to those which the plaintiffs had previously pleaded. The defendant accepts that because there is now a direct allegation that purports to engage the terms of REIWA Annexure A to the Contract that there is no longer a proper basis for maintaining his summary judgment application. 40 The defendant also submits that the amendments to the statement of claim are a supervening action which have directly led to the defendant conceding his summary judgment application can no longer proceed. Therefore, it is submitted, the amendments to the statement of claim have the effect of displacing the general rule that the discontinuing party is liable for the other party's costs. 41 The defendant submits that given the nature and timing of the amendments to the statement of claim, the plaintiffs have capitulated in the face of the application for summary judgment and it is therefore 36 Amended Statement of Claim, par 28.5. -- 19 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 20 a proper and fair exercise of the court's discretion as to costs to order the plaintiffs to pay the defendant's costs of and incidental to the summary judgment application from the date of the appeal of the registrar's decision refusing to grant summary judgment. Plaintiffs' submissions as to costs 42 The plaintiffs submit their Second Amended Statement of Claim does not fundamentally alter the basis of their claim or the basis of their opposition to the summary judgment application. It is submitted that the amendments are minor and that only the matters pleaded in par 43 of their amended submissions37 in opposition to the defendant's summary judgment application are significant. 43 Paragraph 43 of the amended submissions state:38 Mr Waddell prepared a further engineer report dated 2 February 2026 (2 February 2026 Engineer Report). Within the 2 February 2026 Engineer Report, Mr Waddell finds: (a) the Retaining Wall is part of the foundations of the residence, given it: (i) is within the zone of influence of the residence; and (ii) retains the soil upon which the residence is constructed. (b) retaining walls which have major structural defects can 'Take years to show signs of failure… without there being a physical manifestation of damage to the wall or the dwelling constructed on the soil retained by the wall'; (c) where in the 9 February 2024 Engineer Report Mr Waddell found that the Retaining Wall had 'failed', this meant that 'The rotation of the wall indicated that the wall in its current state was no longer able to resist the in-situ loads. The lean of the wall indicated that without substantial strengthening, the wall would continue to move and eventually collapse'; (d) it is reasonable to assume that in early-December 2023 (when the Pre-Purchase Inspection was carried out), the Retaining Wall was in essentially the same condition as it was on 22 January 2024 (when B Waddell Consulting Engineers carried out an initial inspection for the purpose of preparing the 9 February 2024 Report); and 37 Plaintiffs' outline of amended submissions opposing defendant's appeal dated 6 February 2026 (amended submissions). 38 This submission reflects par 27A of the Second Amended Statement of Claim. -- 20 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 21 (e) as of early-December 2023, the Retaining Wall was regarded as a major structural defect. (original emphasis) (footnotes omitted) 44 Self-evidently, the obtaining of a further expert engineer's report dated 2 February 2026 is a new matter and addresses, at least partly, some of the issues discussed at the hearing on 16 December 2025. However, I regard the more significant amendments to be as pleaded in pars 27A and 27B of the Second Amended Statement of Claim,39 which now directly plead that there were major structural defects in the retaining wall at the time the building inspection report was commissioned which constituted Major Structural Defects to the Building structure within the meaning of that expression in cl 9.6 of REIWA Annexure A. It is because of those amendments the defendant now concedes he cannot proceed with his summary judgment application because expert evidence will be needed to assist the court in determining whether a major structural defect to the structure of the residential building had been suffered at the time the building inspection report was commissioned from the defendant. Findings 45 I am satisfied that the nature and type of the amendments made within the Second Amended Statement of Claim and the time at which they have been made have resulted in costs being incurred by the defendant proceeding with his summary judgment application on the basis of the statement of claim as originally pleaded. Ordinarily, amendments to a pleading would entitle the opposing party to an order for costs thrown away occasioned by reason of the amendment. 46 I reject the plaintiffs' submission that the amendments to their statement of claim are only minor and do not significantly alter the basis of their claim for damages. In my view the amendments are significant. Without those amendments having been made the plaintiffs' claim was limited in scope. Although at the hearing on 16 December I had not reached any concluded view as to the outcome of the defendant's application for summary judgment, my preliminary 39 Amended Statement of Claim, pars 28 and 29. -- 21 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 22 view was that it was reasonably arguable. That is, there was a reasonably arguable basis for dismissing the plaintiffs' claim without the need for any further evidence and without needing to proceed to trial. 47 However, following both the Amended Statement of Claim and the Second Amended Statement of Claim, it is apparent there will need to be evidence adduced at trial, principally expert engineering evidence, as to whether there was a structural defect to the house associated with the state of the retaining wall at the time the Report was commissioned. In my view the fact of defects in the retaining wall at the time is not relevant as to whether there was a major structural defect to the residential building unless it can be established the state of the retaining wall had caused a structural defect to the residential building, by, for example, undermining the footings or the stability of the residential building. 48 Expressed only as a preliminary view, and not intended to bind or persuade the trial judge, in my view, for the reasons I have earlier outlined,40 on the proper construction of the REIWA Contract, the retaining wall is not a part of the residential building. Therefore, a building inspector, absent any notice of a structural issue with the retaining wall, was not contractually required to inspect the retaining wall when completing the building inspection report. If it cannot be established as a matter of fact that at the time the plaintiffs entered into the contract with the defendant the state of the retaining wall undermined the footings or the stability of the residence, as distinct from the retaining wall being by itself unstable, the plaintiffs' claim, as originally pleaded, was problematic. 49 The plaintiffs' claim as originally pleaded, and as it is still pleaded in the alternative,41 depends upon establishing as a matter of the proper construction of the REIWA Contract, by reference to cl 3.2.1 of s 3 of the Standard, the defendant was required to inspect the retaining wall. For the reasons I have explained, that construction is problematic. If the plaintiffs are wrong that the Contract required the defendant to inspect the retaining wall, because their cause of action, as originally pleaded, was so narrowly confined, they would fail in their cause of action. Their causes of action, as currently pleaded, are now more broadly based and there is seemingly a greater reliance on a cause of 40 These reasons [33]. 41 Second Amended Statement of Claim, pars 32 - 38. -- 22 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 23 action in negligence, which does not wholly or principally depend upon having to prove that the correct contractual construction of the REIWA Contract and the associated documentation, including the Standard, required the defendant to inspect the retaining wall because it was a part of the residential building. 50 Previously, because the cause of action in negligence as pleaded depended upon an acceptance that a proper construction of the Contract required the defendant to inspect the retaining wall, the cause of action in negligence did not add anything to the cause of action for breach of contract. As I briefly discussed with counsel at the hearing on 18 March, the basis of the pleaded cause of action was unclear. For example, it was unclear whether the fact that the plaintiffs informed the defendant of their concerns about the state of the retaining wall was relevant to any duty of care owed by the defendant to the plaintiffs or the content of any duty owed. It was not clear whether the plaintiffs pleaded a cause of action in negligence which was not reliant on their construction of the Contract that the defendant was required to inspect the retaining wall. The presently pleaded cause of action in negligence is now clearer, which reinforces the conclusion the amendments are far from minor as submitted by the plaintiffs. 51 Until the Second Amended Statement of Claim, there was no plea that at the time the Report was provided there was a defect which constituted a major structural defect to the residential building which enlivened the right to issue a major structural defects notice on the seller pursuant to cl 4 of REIWA Annexure A. Conclusion 52 In the exercise of my discretion, I determine there is no proper basis upon which the plaintiffs have an entitlement to costs arising from the defendant's concession he could no longer proceed with his summary judgment application, a concession which in my view was properly made. 53 I then turn to consider whether the defendant has an entitlement to costs because of the amendments incorporated in the Second Amended Statement of Claim after he had brought his summary judgment application and while the application was part heard. In my view the defendant is entitled to an order for costs which is contingent on him ultimately being successful if the action was to proceed to trial. It is understandable the plaintiffs, after the retaining wall collapsed in -- 23 of 24 -- [2026] WADC 49 HERRON DCJ [2026] WADC 49 [JM] Page 24 October 2025, which was after the summary judgment application was commenced, would amend their original statement of claim to reflect those new factual circumstances. However, the most significant amendments within the Second Amended Statement of Claim do not relate to the collapse of the retaining wall in October. 54 I have formed the view that balancing the various factors, a fair order as to costs is that the defendant have his costs of his summary judgment application from the date of him filing an appeal against the registrar's decision to refuse the application, which will include all of the costs incurred in filing written submissions and preparing for the hearing on 16 December 2025 and again on 18 March 2026, in the cause of the action. The intention is that the defendant's costs of the summary judgment proceedings will only be payable if he ultimately succeeds in defending the plaintiffs' claim. If the plaintiffs succeed they will have no entitlement to any costs incurred in relation to these summary judgment proceedings from the time the registrar's decision dismissing the application was appealed to a judge. I certify that the preceding paragraph(s) comprise the reasons for decision of the District Court of Western Australia. ZO Associate to Judge 18 JUNE 2026 -- 24 of 24 --