Billingham & Anor v Schluter trading as Better Building Inspections Qld [2018] QCATA 165

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Billingham & Anor v Schluter trading as Better Building Inspections Qld [2018] QCATA 165 PARTIES: SIMON DAVID ARTHUR BILLINGHAM (first applicant) NADINE LEE BILLINGHAM (second applicant) v DEREK LESLIE SCHLUTER TRADING AS BETTER BUILDING INSPECTIONS QLD (respondent) APPLICATION NO: APL386-17 ORIGINATING APPLICATION NO: BDL155-16 MATTER TYPE: Appeals DELIVERED ON: 1 November 2018 HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Senior Member Brown, presiding Member Olding ORDERS: 1. The appeal is allowed. 2. The decision of the tribunal made 3 November 2017 is set aside. 3. The matter is remitted to the tribunal for the assessment of the applicants’ entitlement to damages and consideration of any application for costs. CATCHWORDS: CONTRACTS – BUILDING, ENGINEERING AND RELATED CONTRACTS – OTHER MATTERS – pre- purchase inspection – failure to comply with Australian Standard AS4349.1-2007 – whether applicants suffered loss from failure to note limitations on inspection as required by the standard TORTS – NEGLIGENCE – ESSENTIALS OF ACTION FOR NEGLIGENCE – DAMAGE – CAUSATION – GENERALLY – pre-purchase inspection – failure to comply with Australian Standard AS4349.1-2007 – whether applicants suffered loss from failure to note -- 1 of 16 -- 2 limitations on inspection as required by the standard DAMAGES – GENERAL PRINCIPLES – NOMINAL DAMAGES – where finding made that respondent breached contract – where failure to consider applicants’ entitlement to nominal damages Queensland Building and Construction Commission Act 1991 (Qld), s 77(3)(h) Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 28(2), s 100, s 142, s 146, s 146(b), s 147 Astley v Austrust Ltd (1999) 197 CLR 1 Ericson v Queensland Building Services Authority [2013] QCA 391 Haritos v Commissioner of Taxation (2015) 233 FCR 315 Harrison & Anor v Meehan [2016] QCATA 197 Jones v Hyndford Building Services P/L (General) [2003] NSWCTTT 142 Keeley & Ors v Horton & Anor (No 2) [2014] QDC 260 Lyons v Dreamstarter Pty Ltd [2012] QCATA 71 Motium Pty Ltd v Arrow Electronics Australia Pty Ltd [2011] WASCA 65 Peat v Payne [2006] CCT N118-04 RCW Plumbing & Excavations v Camporeale Holdings Pty Ltd [2017] QCATA 48 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 Wood v Chief Executive, Department of Employment, Economic Development and Innovation [2011] QCATA 116 REPRESENTATION: Applicants: Self-represented Respondent: Moray & Agnew, Lawyers APPEARANCES: This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld). REASONS FOR DECISION [1] Mr and Mrs Billingham have applied for leave to appeal, and to appeal, the decision of the tribunal dismissing their claim against Mr Schluter for damages and costs relating to the conduct of a pre-purchase inspection of a residential property. Background [2] In 2014 the Billinghams entered into a contract to purchase a house in Queensland. There were, situated on the property, a number of retaining walls including along the eastern and western boundaries. The contract was made subject to the Billinghams -- 2 of 16 -- 3 obtaining a satisfactory building and pest report. The Billinghams engaged Mr Schluter to inspect the property and provide a building report. After receiving the report, the Billinghams proceeded to complete the contract. Over a year after completion of the contract, and subsequent to two significant rainfall events, the Billinghams noticed that there had been movement in the western retaining wall at their property. Upon removing timber capping (by unscrewing the screws holding it in place), they discovered that the retaining wall was not new, as they say they had thought, but in fact was in a deteriorated state. [3] Mr Schluter’s inspection report had noted a number of issues with the property but made no reference to the western retaining wall. The Billinghams claimed Mr Schluter’s work was therefore negligent and in breach of their contract and that they were entitled to damages for the cost of replacing the wall and associated costs. [4] Although the inspection was carried out without the Billinghams first signing Mr Schulter’s standard contract, the case below was conducted on the basis that the Australian standard referenced in the contract, AS4349.1-2007- Inspection of buildings, Part 1: Pre-purchase inspections – Residential Buildings (the standard), applied. [5] The learned member accepted that, under the terms of the standard, Mr Schluter’s work was not deficient in failing to report any major defects in the western retaining wall. The location of the wall – against the dividing fence and in the ground on the Billinghams’ side of the western boundary – meant that Mr Schluter’s ability to inspect the retaining wall was restricted. The standard required a visible inspection of all accessible areas, but ‘without dismantling’, and thus did not require inspection of inaccessible areas. The learned member found that Mr Schluter’s inspection was carried out in accordance with the standard. [6] The standard also required Mr Schluter’s report to identify any area that was not inspected and the factor that prevented inspection, with recommendations to gain access, where practicable and considered necessary, to be included. It was common ground that Mr Schluter was required to report that there were restrictions that prevented him from inspecting the wall and that he failed to do so. [7] However, the member held that the Billinghams had not discharged the onus of proving that they had suffered loss as a consequence of this failure, and accordingly dismissed their application. Nature of appeal [8] Under section 142 of the QCAT Act, an appeal to the appeal tribunal on a question of law only may generally be made without leave, but an appeal on a question of fact, or a question of mixed law and fact, requires leave of the appeal tribunal. [9] Apart from the requirement for leave, the distinction between questions of law and questions of fact or mixed law and fact, is significant to the appeal tribunal’s role. Broadly speaking, in deciding an appeal on a question of law under s 146 of the QCAT Act, the appeal tribunal must either confirm the decision or return the matter to the tribunal for reconsideration, unless the appeal tribunal’s determination of the question of law is capable of resolving the matter as a whole in -- 3 of 16 -- 4 the applicant’s favour.1 By contrast, an appeal on a question of fact or a question of mixed law and fact under s 147 of the QCAT Act is decided by way of rehearing with or without the hearing of additional evidence as decided by the appeal tribunal. [10] The distinction between questions of law and fact, and in particular the meaning of a question of mixed law and fact, is not always clear and the courts have not formulated satisfactory tests of universal application.2 It has been said that questions of law are about what is the correct legal test; questions of fact are about what actually took place; and questions about whether facts satisfy the legal test are questions of mixed law and fact.3 It is uncontroversial that allegations of making a factual finding without evidence and of bias raise questions of law. Grounds of appeal [11] The Billinghams’ specification of their grounds of appeal, in the application for leave to appeal and appeal, is reproduced below. The square-bracketed numbers are intended, it appears, to reference numbered paragraphs in the member’s reasons. For ease of reference, we have first extracted the relevant paragraphs from the reasons followed by each of the relevant appeal grounds. Reasons: [37] Even assuming that a major defect existed at the date of inspection I am not satisfied that a notation in the report that the retaining wall could not be visually inspected would give the Billinghams, acting reasonably, a right to terminate the contract or a realistic expectation of renegotiating the contract price by an amount equivalent to the cost of repairing it. Appeal ground: [37] Had limitation been noted, applicants would have the right to request a further invasive inspection (which would have involved removal of 4 screws to release any of the capping timbers). Such inspection would have revealed deteriorated timbers and ineffective structural repairs to retaining wall. Evidence provided by Boyle and Dixon reports. Reasons: [39] The report noted in respect of the eastern retaining wall which was capable of visual inspection: Wet rot decay was noted in the retaining wall. Repairs and or replacement of damaged timber will be required. The wall also has a forward lean. [40] There is no evidence that the Billinghams received or even sought a reduction of the purchase price as a result of this defect. They certainly did not terminate the contract. I am not satisfied that even if the limitation had been noted in the report they could or would have terminated the contract or renegotiated the contract price. 1 Ericson v Queensland Building Services Authority [2013] QCA 391. 2 Haritos v Commissioner of Taxation (2015) 233 FCR 315 contains a detailed survey of the authorities. 3 For a recent example, see RCW Plumbing & Excavations v Camporeale Holdings Pty Ltd [2017] QCATA 48. -- 4 of 16 -- 5 Appeal ground: [39][40] Respondent failed to indicate severity of deterioration. Applicants negotiated agreement of vendors to re-treat out-of-date termite barrier at their cost as a result of findings of pest inspection. Reasons: [41] I am not satisfied that the Billingham’s (sic) have established to the required standard that they have suffered any loss from Mr Schluter’s failure to note the limitation in his report. In those circumstances the application is dismissed. Appeal ground: [41] Applicants (sic) loss is threefold. 1. Loss of opportunity to request further invasive inspection to discover existing defects 2. Loss of opportunity to negotiate lower purchase price to take required repairs/replacement into account. 3. Loss of opportunity to terminate contract if further inspection/price reduction not agreed to. [12] It is notable that these grounds do not attack the finding that Mr Schluter’s report was not deficient in failing to identify a defect in the wall, but rather are confined to the question of whether the Billinghams suffered a loss because of Mr Schluter’s failure to note the limitation on the ability to inspect the western retaining wall. [13] This is not surprising, since that was the basis on which the case below was put by the Billinghams, as this exchange during final submissions indicates: MEMBER: So you - what you’re saying to me is that it’s – can I say this? There is not – from my understanding of the evidence – any way he could have seen a retaining wall, without lifting the capping, which he couldn’t do. Your complaint is that he didn’t alert you to the fact; is that - - - MR BILLINGHAM: Didn’t alert us to the fact that either – well, if – given that the retaining wall building elements, structural elements couldn’t be seen, there wasn’t a notation of the limitation with a recommendation, possibly for invasive – an invasive inspection. So we were led to believe, by the report, for our – as it turned out – incorrect assumption, because we aren’t builders – that the retaining wall was new. [14] However, the Billinghams now seek to argue that the front part of the retaining wall (that is, toward the northern boundary of the property) to the front of the garage was, in fact, able to be inspected and their written submissions canvass a range of other issues. The Billinghams’ submissions [15] The member’s reasons contain 41 paragraphs. The Billinghams’ submissions refer to around 20 of those paragraphs which they allege indicate errors of fact or law, but some of these seem to relate to the same essential argument. To the extent that we have been able to identify discrete arguments, we first address the submissions in relation to those arguments before turning to other alleged errors. Alleged errors relating to that part of the western retaining wall that it is said could have been inspected -- 5 of 16 -- 6 [16] As indicated earlier, the Billinghams now seek to argue that Mr Schluter could have inspected that part of the western retaining wall to the front of the garage that was visible above the ground as it was not capped and there is no dividing fence preventing access to that part of the wall. The Billinghams say that the exposed section of the retaining wall bears the same installation defects and rotted timbers as the ‘balance’ of the wall. [17] Whilst the Billinghams do not refer to any particular error by the learned member, we assume that this ground of appeal relates to a failure by the member to take into consideration relevant evidence. The difficulty with this submission is that it is unclear what is said to flow from the error. [18] Although there is no direct evidence from the Billinghams’ expert, Mr Boyle, about the condition of this part of the wall at the time of Mr Schluter’s inspection, Mr Boyle’s report did state that: The Western retaining wall extends Northwards from the front of the garage for approximately 5.5 meters (sic). At approximately its mid-point there is a bolt constructed from threaded rod, washers and nuts that extends through the root ball of a cane palm terminating through a treated pine post adjacent to the driveway. This bolt had significantly deflected as the cane palm root ball has grown. It is hard to imagine the deflection has manifested in the last two years. There were several members of this section of wall that were replaced at some time in the past. The same pattern of repair is evident to this section of wall as for the other repaired wall. Treated pine members have replaced hardwood. There were some treated pine vertical members screwed to the horizontal sleepers in this section of wall that were installed above ground level and did not extent (sic) into the ground and a footing. The wall at this mid-point was approximately 500mm high. [19] However, there is no statement in the report that Mr Schluter should have drawn any conclusions or taken any action in relation to the balance of the wall as a result of the condition of this part of the wall. Mr Boyle gave evidence that the appearance of the capped section of the retaining wall was sufficiently different to the appearance of the other retaining walls at the property that a cautionary note should have been sounded by Mr Schluter in his report: … that said something happened to this wall that caused it to look different to the other walls on site.4 [20] Mr Dixon, the expert for Mr Schluter, gave evidence that, given the appearance of the exposed northern section of the retaining wall, he would have assumed that the capped section of retaining wall had been repaired.5 [21] The reasons do not refer to the exposed northern end of the retaining wall. This is not surprising in light of the Billinghams’ submissions at the end of the hearing. As we have noted, in the course of final submissions, the member specifically raised with Mr Billingham the basis on which it was alleged that Mr Schluter’s report was deficient, that is, in relation to the failure to note the limitation on accessibility. 4 Transcript dated 18 July 2017, T1-24 lines 34 to 46. 5 Ibid, T1-17 lines 20 to 40. -- 6 of 16 -- 7 [22] At its highest, the evidence of Mr Boyle may have supported a finding that Mr Schluter’s report should have contained a reference to the difference in appearance between the capped and uncapped sections of the western retaining wall. But there was the contrary evidence of Mr Dixon. In any event, there was no evidence from the Billinghams as to what they would or could have done had they received a report containing the ‘cautionary note’ referred to by Mr Boyle regarding the appearance of the capped and uncapped sections of the retaining wall. [23] This ground of appeal is not made out. Alleged errors relating to claim in negligence [24] The Billinghams, referring to paragraphs [34] to [36] of the reasons, appear to submit that the member found that Mr Schluter was not negligent. To address this submission, it is necessary to reproduce those paragraphs and, by way of context, the preceding paragraph [33]: [33] The requirement that the report identify inaccessible areas is mandatory. It is not in dispute that the report fails to identify that the structural elements of the retaining wall could not be inspected. [34] In those circumstances, even though Mr Schluter’s inspection of the property was not negligent or in breach of his obligations under his contract with the Billinghams he was however, in breach of the Australian Standard and accordingly the contract in failing to report the limitation in respect of his inspection of the western retaining wall. What consequences flow from that? [35] The Billinghams refer me to a decision of the Consumer and Commercial Tribunal in Nickel v Kellow [footnote omitted], where the Tribunal ordered a building inspector to pay damages equivalent to rectification costs of certain items which he had negligently, and in breach of his contract, failed to identify in his report. [36] That is different from the current circumstances. I have found that Mr Schluter was not negligent in carrying out the inspection. I have found that he is in breach of his contractual obligation only in that he failed to notify a limitation in the inspection. The correct measure of the Billinghams’ damages, if any, is the loss that flows from that failure and the onus is on them to prove that loss. [25] The clear basis of the member’s decision articulated in the reasons is that the report: (a) was not deficient in failing to identify a major defect in the western retaining wall; but (b) was deficient in failing to note the limitation on inspecting the wall. [26] The Billinghams were unsuccessful not because the tribunal found the report was not deficient – to the contrary, the tribunal specifically found that it was deficient in failing to note the limitation on access – but because they failed to discharge the burden of proving that they had suffered loss as a result of that deficiency. -- 7 of 16 -- 8 [27] Although the submission was not clearly made by the Billinghams, we have considered whether they intended to submit that the member had only considered their claim in contract and not in negligence. It is well established that concurrent liabilities may arise in contract and tort.6 [28] In that regard, we note that at paragraph [34] of the reasons, the learned member, in referring to the failure to report the limitation, concludes that Mr Schluter breached the contract. There is no finding of breach of duty by Mr Schluter. The reasons do not draw a clear distinction between negligence and breach of contract; for example, at paragraph [36] of the reasons in the context of the inspection only mentions negligence and in the context of the failure to note the limitation on inspection only mentions breach of contract. [29] This may be because the focus of the case was on the application of the standard. Consistent with the approach taken in the tribunal below, the Billinghams’ submissions on appeal also equate failure to comply with the standard with both breach of contract and negligence. [30] The Billinghams refer in particular to the reasons at paragraph [36] and the finding that Mr Schluter was not negligent in carrying out his inspection and that ‘he was in breach of his contractual obligations only in that he failed to notify a limitation in the inspection’. The Billinghams ask, ‘how is “a breach of the Australian Standard and accordingly the contract” not a negligent act when it results in the provision of [a defective report]?’ [31] This question stems from a misunderstanding of the reasons. Read in context, it is clear that the word ‘only’ refers to the finding that Mr Schluter’s report had a single deficiency ie in failing to note the limitation in the inspection, and not any additional deficiency including failure to report a defect in the wall. [32] In any case, and subject to what we have to say about nominal damages, there is nothing in the evidence before the tribunal below to indicate that the outcome in relation to breach would be any different whether the breach by Mr Schluter had been found to be in contract or in tort. In either case, the onus was upon the Billinghams to prove that they had suffered loss. Alleged error in conclusion on damages [33] In order to recover substantial, as distinct from nominal, damages the Billinghams were required to establish that the breach of contract or breach of duty by Mr Schluter led to the loss of an opportunity that had some value.7 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.8 If the loss of the chance had no more than a theoretical or negligible value, then the Billinghams were unable to establish any compensable loss. In other words, there was an initial question of causation. Did the breach of contract or breach of duty by Mr Schluter cause the loss of an opportunity by the Billinghams to terminate the contract or negotiate with the vendor more favourable terms? This issue was required to be determined on the 6 Astley v Austrust Ltd (1999) 197 CLR 1. 7 Sellars v Adelaide Petroleum NL (1994) 179 CLR 332. 8 Ibid. -- 8 of 16 -- 9 balance of probabilities.9 If the Billinghams were able to establish that it was more probable than not that Mr Schluter’s breach caused a loss of an opportunity of more than negligible or theoretical value it then became a question of assessing the loss. The High Court held in Sellars v Adelaide Petroleum NL: On the other hand, 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.10 [34] The learned member found that the correct measure of the Billinghams’ damages, if any, was the loss that flowed from the failure by Mr Schluter to note in his report the limitation in the inspection. It is implicit in this finding that the learned member was first required to be satisfied that the Billinghams had, on the balance of probabilities, established a loss of opportunity of more than negligible or theoretical value. The learned member correctly observed that the onus was upon the Billinghams to prove that they had lost such an opportunity as a result of Mr Schluter’s breach of contract and breach of duty.11 [35] The Billinghams submit in this appeal that if the report had disclosed the limitation on inspection of the retaining wall, various opportunities would have been available to them, including discussing the implications with Mr Schluter; requesting the vendor to consent to further investigations; negotiating with the vendor a reduction in the purchase price; or walking away from the purchase if the vendors would not permit further investigation or agree to a price reduction. It is these opportunities the Billinghams say they lost. [36] Merely identifying the lost opportunities does not establish that the Billinghams in fact suffered the loss of an opportunity which had some substantial value. There is no direct evidence of the likelihood that any of the opportunities identified by the Billinghams would have been taken up or otherwise come to fruition for the benefit of the Billinghams if the limitation on inspection of the western retaining wall had been included. Similarly, the weight of the evidence does not compel any inferences to be drawn to this effect. The loss of opportunity asserted by the Billinghams was, at best, speculative. [37] The identification by the Billinghams of the lost opportunities does not reduce the force of the member’s reasoning, which was essentially that Mr Schluter’s report actually referred to issues with the eastern retaining wall and specifically noted that it had a forward lean and that repairs or replacement of damaged timber would be required. The Billinghams took no action in response to the comments about actual issues with the eastern retaining wall. [38] The Billinghams submit that the warning in Mr Schluter’s report about the eastern retaining wall ‘failed to indicate severity of deterioration’. The warning included that ‘Repairs and or replacement of damaged timber will be required’. In our view, advising that repairs or replacement of damaged timber will be required indicates significant deterioration. 9 Ibid. 10 Ibid, 355. 11 Billingham v Schluter trading as Better Building Inspections Qld [2017] QCAT 367, [36]. -- 9 of 16 -- 10 [39] The Billinghams also submit that Mr Schluter must have regarded the deterioration of the eastern retaining wall as minor as it was not included in the Summary section of the report, which earlier decisions have indicated is of ‘utmost’ importance. Their submissions cite Jones v Hyndford Building Services P/L (General)12 and Peat v Payne.13 [40] The applicants’ reference to those cases somewhat overstates the importance accorded to the summary section in those decisions. In any case, the 2007 version of the standard that was before the tribunal in the current matter does not afford any particular status to the summary and merely states: 4.2.9 Summary A summary shall be included to provide an overview of the report, including the purpose of the inspection, the scope and the conclusion. [41] Additionally, immediately below the summary section of the report, there are statements, including a bold highlighted statement, noting that the summary cannot be relied upon on its own and must be read in conjunction with the full report. [42] The Billinghams’ second appeal ground also notes that they did in fact negotiate for the vendors to re-treat an out-of-date termite barrier revealed in a termite inspection report and implicitly submits that it should be inferred that they would have taken a similar course if they had been told that the retaining wall had not been inspected. However, there is a significant difference between being told that a property specifically requires attention to termite protection and being told that a retaining wall could not be inspected, especially when the Billinghams say they thought the wall was new. [43] Against this background, it was open to the member to conclude that he was not satisfied that the Billinghams would have taken any action if the report had, as required by the standard, noted the limitation on inspection of the western retaining wall. There was no other evidence to establish that the Billinghams in fact suffered a loss as a consequence of the failure to do so. There was no evidence that the vendor of the property would have been prepared to permit invasive testing of the retaining wall by the removal of the capping nor was there evidence that, had this testing been carried out, the results would have given the Billinghams an opportunity to negotiate a reduction in the purchase price or terminate the contract. In those circumstances, we can identify no error in the member concluding that the Billinghams had not satisfied the onus of proving they had suffered loss as a consequence of the claimed loss of opportunities arising out of the failure by Mr Schluter to report on the limitation on inspection. [44] In conclusion, it was open to the learned member to conclude that the Billinghams had not discharged the onus of proving, on the balance of probabilities, that they had lost a valuable opportunity as a result of the failure to note in the report the limitation regarding the inspection of the western retaining wall. Allegation of bias 12 [2003] NSWCTTT 142, [45]. 13 [2006] CCT N118-04, [164], [182]. -- 10 of 16 -- 11 [45] Under a heading of ‘Bias’, the Billinghams refer to a number of findings of the member based on the evidence before the tribunal. It is not necessary to detail the findings here. The Billinghams’ sentiments are summarised in the submissions: . . . the Billinghams feel that the Member seems to favour the evidence and opinions of Don Dixon (expert witness for the respondent) over those of Chris Boyle (expert witness for the Billinghams). [46] One of the components of natural justice is the rule against bias. A decision maker must not have an interest in the dispute to be decided or bring a prejudiced mind to the process of decision making. Bias may be actual or apprehended. In Wood v Chief Executive, Department of Employment, Economic Development and Innovation14 the QCAT appeal tribunal held: A reasonable apprehension of bias exists if a fair-minded lay bystander might reasonably apprehend that the decision-maker might not bring an impartial mind to the determination of the issues that he or she must decide. There are two steps in the application of the test: identification of what is alleged that might lead the decision-maker to decide the case other than on its merits, and secondly, the logical connection between the matters identified and the feared digression. Mere reference to a decision-maker’s past decisions is insufficient to ground disqualification: there must be grounds upon which it might be thought that the particular decision-maker will not decide the case impartially. An adverse ruling against a litigant does not establish apprehended bias. If bias is not objected to at the time it is apprehended, the right to object may be waived. (footnotes omitted) [47] Where there was contradictory evidence by experts, choosing between the two opinions is precisely what the learned member was required to do. The Billinghams do not point to any aspect of the reasoning that is said to suggest, let alone establish, bias on the part of the member. They simply express a grievance that the learned member appeared to accept the evidence of Mr Schluter’s expert over their expert’s evidence. [48] We are satisfied that there is nothing in the findings or reasoning highlighted by the Billinghams which indicates that the learned member did anything other than make findings which were open on the evidence. The allegation of bias is not made out. Other alleged errors [49] As already noted, the Billinghams purport to identify a range of issues across a large part of the reasons. Many of these are taken up in the reasons above, but there are others on which we provide the following comments. [50] The Billinghams note that, contrary to paragraph [2] of the reasons, the western retaining wall has not yet been replaced. Nothing turns on this error. [51] The Billinghams also refer to evidence regarding the height of the retaining wall and whether the height was ascertainable. Again, nothing turns on this. The learned member did not find that the wall did not need to be inspected because of its height. 14 [2011] QCATA 116. -- 11 of 16 -- 12 At paragraph [25] of the reasons, the learned member found that the Australian Standard required an inspection of the western retaining wall as it was over 700mm high.15 The learned member found at paragraph [26] of the reasons that Mr Schluter was unable to inspect the structural elements of the wall because it was inaccessible.16 [52] The Billinghams complain that the member found at paragraph [24] of the reasons that he was not satisfied that the capping of the retaining walls made concealment of a defect ‘apparent’ and assert that it does make concealment of a defect ‘plausible’ or ‘possible’.17 That may be so, but to so say does not reveal an error in the member’s reasoning. It was open on the evidence for the learned member to find as he did. The learned member was entitled to prefer the evidence of Mr Dixon in relation to the significance of the appearance of the capping.18 In any case, the member concluded in paragraph [23] of the reasons that the standard does not impose an obligation to report an apparent concealment of a defect.19 The Billinghams’ observations do not detract from the conclusion that the deficiency in Mr Schluter’s actions was confined to failing to note the limitation on inspection of the western retaining wall, which was the basis of the Billinghams’ final submissions to the tribunal below. [53] The Billinghams also challenge the finding at paragraph [38] of the reasons that to determine that a defect was sufficiently serious to justify termination of the contract would require invasive testing and the consent of the vendors to excavate their property to expose the retaining wall or the consent of the owners of the adjoining property and their tenants to dismantling the fence. The evidence of Mr Dixon was that, without removing all of the screws fixing the capping timber, the only way to confirm the true condition of the wall and degree of lean in the wall (at the time Mr Dixon inspected the wall) would be to gain access to the western face of the wall via the neighbouring property following which it would be necessary to remove both the AC sheet and fence palings to gain access and view the sleepers and embedded posts.20 We accept that the member erred in making the finding at paragraph [38] of the reasons on the basis that there was no evidence to support the finding.21 A finding of fact where there is no evidence to support the finding is an error of law. In our view the error did not affect the decision below nor does it affect the outcome of this appeal. The error does not detract from our view that the conclusion that the Billinghams did not discharge the onus of proving that they suffered loss was reasonably open to the member for the reasons we have outlined. [54] Finally, we note the Billinghams’ submission that the vendors were well aware of the defects in the western retaining wall. There are difficulties with this submission. First, it is a mere assertion, not supported by cogent evidence of major defects being evident to the vendors.22 No one was called to give evidence at the hearing about the 15 Billingham v Schluter trading as Better Building Inspections Qld [2017] QCAT 367, [25]. 16 Ibid, [26]. 17 Ibid, [24]. 18 Report prepared by Donald Dixon dated 23 November 2016 at [8.0]; Transcript dated 18 July 2017 T1-17 lines 11 to 40; Transcript dated 18 July 2017 T1-18 lines 34 to 42. 19 Billingham v Schluter trading as Better Building Inspections Qld [2017] QCAT 367, [23]. 20 Report prepared by Donald Dixon dated 23 November 2016 at [6.0]. 21 Billingham v Schluter trading as Better Building Inspections Qld [2017] QCAT 367, [38]. 22 A copy of an unsigned, undated letter, with no addressee, apparently from the owner of a neighbouring property, was provided but not put in evidence in the hearing below. The letter merely -- 12 of 16 -- 13 providence of the letter or its relevance. Secondly, the relevance of the submission is unclear. Even if it is accepted that the evidence supported a finding that the vendors were aware of defects in the wall, the Billinghams do not refer to any specific error by the learned member said to result from this. Disposition of the application for leave to appeal and appeal [55] As our reasons make clear, the Billinghams’ submissions generally seek to challenge the learned member’s findings on the evidence. The grounds of appeal allege errors of fact or mixed law and fact. As we have indicated, appeals on such grounds require leave of the appeal tribunal. [56] The issues to be considered in determining whether to grant leave to appeal are: Is there a reasonably arguable case of error in the primary decision? Is there a reasonable prospect that the applicant will obtain substantive relief? Is leave necessary to correct a substantial injustice to the applicant caused by some error? Is there a question of general importance upon which further argument, and a decision of the appeal tribunal, would be to the public advantage?23 [57] This is a case that turned on the particular evidence and submissions before the tribunal below. There is no suggestion that it involves any question of general public importance that would warrant a grant of leave. Further, for the reasons outlined above, there is no reasonable prospect that the Billinghams would obtain substantive relief if leave were granted in respect of the identified grounds of appeal. [58] If the Billinghams had run their case below on the basis that the front part of the western retaining wall could have been inspected, and if they had led evidence that that part of the wall was deteriorated, or that deterioration in that part of the wall could indicate deterioration in the part that was concealed by the capping, the outcome may have been different. But they did not. Leave should not be granted simply to allow applicants to remedy deficiencies in the way their case was run below. [59] As the Billinghams have not established a material error in the decision in relation to those grounds of appeal raising questions of fact or mixed law and fact, we refuse leave to appeal. [60] To the extent that the appeal raises questions of law, the appeal is as of right. We have found that the allegation of bias has not been made out. As to the finding by the learned member that invasive testing as identified in paragraph [38] of the reasons was required to determine that a defect was sufficiently serious to justify termination of the contract of sale, we have found error by the learned member on the basis that there was no evidence to support such a finding. The error does not however change the outcome of the appeal. [61] The learned member found that Mr Schluter had breached the contract with the Billinghams by failing to note in his report the limitation on inspection of the western retaining wall. In the absence of the Billinghams establishing an entitlement notes that the wall ‘isn’t in the best shape’, along with the author’s hope that ‘the wall isn’t deteriorated significantly and this is a simple thing to fix’ and advice that quotes for repairs would be obtained. 23 See, for example, Harrison & Anor v Meehan [2016] QCATA 197. -- 13 of 16 -- 14 to recover substantial damages, they were entitled to an award of nominal damages only. [62] In Keeley & Ors v Horton & Anor (No 2)24 Dorney QC DCJ observed: In State of New South Wales v Stevens McColl JA, with whom Ward JA agreed (although she also agreed with Sackville AJA), observed that (with reference to cited authority):  “nominal damages is a technical phrase which means that you have negatived anything like real damage, but that you are affirming by your nominal damages that there is an infraction of a legal right which, though it gives you no right to any real damages at all, yet it gives you a right to the verdict or judgment because your legal right has been infringed”, noting that the term does not mean “small” damages;  it is clear that a breach of contract by one party always gives the other party the right to recover damages for the breach;  if the breach is not proved to have caused any loss, the party that has breached the contract is liable to pay nominal damages;  nominal damages is not a case of damages being quantified on a noncompensatory principle but a method of recording a verdict where no compensation is required;  historically, the purposes of nominal damages are those both of vindicating a plaintiff’s right and of being “a mere peg on which to hang costs”;  the latter purpose – concerning costs – is no longer an appropriate purpose because of the discretion now residing in the court concerning costs;  nominal damages are not “real damages” and, in particular, they are “vindicatory, not compensatory”; and  after considering many recent authorities, $100.00 was “an appropriate amount to award by way of nominal damages as a token of the (party’s) breach”. … Since the other cases concerning nominal damages to which I have been referred to, or otherwise have obtained, deal primarily with the issue of costs, it is unnecessary to canvas them here, subject to one exception. In Hyde Park Residence Ltd v Yelland, Jacob J declined to make any award of nominal damages in a copyright action, holding that the plaintiff had “in reality lost” and “in reality” the defendant had “established a complete defence”: at 670. In the latest edition of McGregor on Damages (19th Edition) (Sweet and Maxwell) the text presents the “thought”, referring to Jacob J’s decision (though containing an error in transcription), that the awarding of nominal damages (absent establishing a right) may be seen “as a pointless exercise”: at 24 [2014] QDC 260. -- 14 of 16 -- 15 [12-011]. But no Australian intermediate appellate court has taken that path - so neither will I in this case. 25 [63] As was held in Stevens an award of nominal damages does not automatically lead to an award of costs in a plaintiff’s favour, which is a matter for the discretion of the court. [64] It cannot be disputed that the Billinghams sought their costs below and that, had the learned member proceeded to consider the Billinghams’ entitlement to nominal damages, they would have been entitled to a final decision in their favour which in turn would have entitled them to seek an order for costs. We are mindful of the fact that the Billinghams did not seek an award of nominal damages in the proceedings below. There is perhaps no surprise in this considering the parties were self- represented. We are also mindful that the Billinghams’ grounds of appeal did not assert a failure by the learned member to assess their entitlement to nominal damages. It is apparent from the appeal submissions that neither party gave any consideration to the issue of the Billinghams’ entitlement to nominal damages. However it is also apparent that in the appeal the Billinghams maintained that the learned member had erred in not awarding them damages for Mr Schluter’s breach of contract and that they sought their costs of the proceedings below comprising filing fees, expert report and witness fees and property valuation fee.26 [65] In Motium Pty Ltd v Arrow Electronics Australia Pty Ltd27 it was held: It is clear that a breach of contract by one party always gives the other party a right to recover damages for the breach: Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57; (2008) 238 CLR 570 [58]. If the breach is not proved to have caused any loss, the party that has breached the contract is liable to pay nominal damages: see Luna Park (NSW) Ltd v Tramways Advertising Pty Ltd [1938] HCA 66; (1938) 61 CLR 286, 301; Huppert v Stock Options of Australia Pty Ltd [1965] HCA 30; (1965) 112 CLR 414, 424, 431; Chappel v Hart [1998] HCA 55; (1998) 195 CLR 232 [93], [149]. [66] In Motium it was also held, in relation to the failure by a plaintiff to specifically seek an order for nominal damages: It was, in our view, unnecessary for the appellant expressly to seek an order for nominal damages in the alternative to its claim for substantial damages at trial. Upon a finding that the respondent was in breach of the contract it necessarily followed that the appellant was entitled to an order for nominal damages if it failed (as it did) to establish that it had suffered substantial damages, and such an order should have been made by the primary judge. In the absence of such an order, it is appropriate for this court to remedy the omission. [67] In the circumstances we consider it is consistent with acting fairly and according to the substantial merits of the case28 to deal with the failure by the learned member to 25 The decision in Keeley was overturned on appeal; however, the Court of Appeal cast no doubt on this statement of principles concerning nominal damages: Keeley & Ors v Horton & Anor [2016] QCA 68. 26 Application for leave to appeal or appeal filed 28 November 2017, Part C. 27 [2011] WASCA 65. 28 QCAT Act, s 28(2). -- 15 of 16 -- 16 assess the entitlement of the Billinghams to nominal damages notwithstanding that such failure was not a specific appeal ground. [68] In our view the learned member, having found that Mr Schluter breached the contract, erred in law in not considering the issue of the Billinghams’ entitlement to an award of nominal damages for the breach. The Billinghams should have the opportunity to seek an assessment of nominal damages. They should also have the opportunity to seek an order for costs in the proceedings below. By s 77(3)(h) of the Queensland Building and Construction Commission Act 1991 (Qld), the tribunal may, in exercising its powers to resolve a building dispute, award costs. To this extent s 77(3)(h) is a modifying provision. The discretion to award costs under s 77(3)(h) is a broad one which must be exercised judicially, not upon irrelevant or extraneous considerations but upon facts connected with or leading up to the litigation.29 As was held in Lyons v Dreamstarter Pty Ltd: The discretion to award costs starts with the proposition that it is just and reasonable that a party who causes another to incur costs should reimburse the other party for them. Otherwise, the factors affecting the discretion will vary in each case.30 [69] We are constrained by s 146 of the QCAT Act in how, having identified the error of law, we are permitted to deal with the appeal. By s 146(b) we may set aside the decision and substitute our own decision. We may only do this however if determination of the question of law is capable of resolving the matter as a whole in the applicants’ favour.31 The Billinghams do not confine the relief sought in the appeal to an award of nominal damages. Substituting a decision by way of an order for nominal damages would not resolve the matter as a whole in the Billinghams’ favour. [70] Accordingly, the appropriate order is that the decision below is set aside and the matter returned to the learned member to consider the entitlement of the Billinghams’ to damages and to consider any application for costs. 29 Lyons v Dreamstarter Pty Ltd [2011] QCATA 142 citing Oshlak v Richmond River Council (1998) 193 CLR 72, 88 and Latoudis v Casey (1990) 170 CLR 534, 557. 30 [2012] QCATA 071, [11]. 31 Ericson v Queensland Building Services Authority [2013] QCA 391. -- 16 of 16 --