Coulter v Bush; Coulter v Domain Residential Northern Beaches Pty Ltd

1. [1]

   On 25 May 2019 at around 1:00pm, the first defendant’s double storey house at 92 Riverview Road, Avalon Beach burnt down. I will refer to the first defendant as Bush.

2. [2]

   At the time, the only person at the house, and in control of it, was Julie Bundock (Bundock), a real estate agent employed by the second defendant real estate agency (Domain), which had been retained by Bush to sell his house. She was there to supervise an open house. An auction was scheduled to be held on 1 June 2019 and open houses were held, or to be held, from 11 May 2019 each Saturday and Wednesday until the auction. Bundock had attended the house on at least four earlier occasions for open houses.

3. [3]

   The house was tenanted by Elise Coulter and Joshua (also known as Reg or Reggie) Songaila pursuant to a Standard Form Residential Tenancy Agreement entered into with Bush on 9 April 2018. Also living there were Lauren Coulter and Ella Eagle (formerly Dix). I will refer to each of them by their first name, with no disrespect intended. I will refer to them collectively as the plaintiffs.

4. [4]

   Bundock had arranged for the plaintiffs to be away for the day.

5. [5]

   It is not in dispute that some 20 minutes before the fire broke out, Bundock had, on her own initiative, taken laundry, consisting of a quilt cover and two queen size bedsheets, hanging on a clothesline (apparently makeshift) on the deck at the front of the house and put it in a downstairs room (the room) on a steel shelf (being the top surface of a clothing cabinet), the shelf being approximately 20-30cm beneath a light fitting, and then turned the light on. There is a debate about where on the shelf she put it. She also put in the room a wicker basket containing various items including, apparently, a candle.

6. [6]

   The house and the personal property of the plaintiffs in it was destroyed in the fire.

7. [7]

   The plaintiffs sue Domain in tort for damages representing the value of that personal property.

8. [8]

   Bush (by cross-claim) sues Domain in tort and under the provisions of the Australian Consumer Law (ACL) for damages being the cost of restoration of the house. The ACL implies into the agency agreement between Bush and Domain a guarantee that Domain will render its services with due care and skill.

9. [9]

   A manifestly untenable claim by Elise and Reggie against Bush in contract, for the loss of their chattels based on a failure by Bush to give quiet enjoyment of the house as a consequence of Bundock’s actions, was correctly abandoned. This led Bush to abandon a cross-claim against Domain for indemnity against any such contractual liability.

10. [10]

    The parties agreed on the value of the plaintiffs’ personal property lost and on interest from 26 May 2019 to the first day of hearing. They also agreed the quantum of Bush’s damages (before any possible reduction for alleged concurrent wrongdoing by the plaintiffs – as asserted by Domain) exclusive of interest.

11. [11]

    Elise and Reggie initially sued in the Local Court. The quantum of their claimed damages is well within the jurisdiction of that Court. However, Bush’s cross-claim against Domain exceeds the jurisdiction of that Court and the proceedings were accordingly transferred to this Court.

12. [12]

    The proceedings brought by Lauren and Ella were also commenced in the Local Court and transferred to this Court.

13. [13]

    Pursuant to s 5E of the Civil Liability Act 2002 (NSW) (the Act), in these proceedings the plaintiffs and Bush bear the onus of proving, on the balance of probabilities, any fact relevant to the issue of causation.

14. [14]

    The core dispute between the plaintiffs and Bush, on the one hand, and Domain, on the other, is what caused the fire.

15. [15]

    The plaintiffs and Bush contend that the evidence establishes that the putting of the bedding on the shelf under the light caused that material to ignite from the heat generated by the light. They contend that the bedding was up against the light fitting or the light.

16. [16]

    Domain agrees that, whilst this is a possibility (or can be suspected), it has not been established on the balance of probabilities, and that not all other possible sources of the ignition have been excluded. It argues that the evidence before the Court does not establish whether a lightbulb can, or what type of lightbulb could, have caused the bedding to have ignited within 20 minutes or at all, and that there is no evidence that the heat generated from the lightbulb in this case was capable of doing so.

17. [17]

    Domain also pleads that there should be reduction, to nil, of any damages for which it is liable because the plaintiffs, or some of them, were concurrent wrongdoers who caused the damage, in that, they did not disclose to Domain their knowledge that, if the light was turned on, the shelf would get hot.

What did Bundock do?

1. [18]

   A significant element of dispute is whether Bundock put (or perhaps threw) the bedding onto the shelf so as to be up against the light fitting or light, or, as she now says, draped it over the front and around the sides of the shelf.

2. [19]

   For the reasons which follow, I find that she put the bedding on top of the shelf in contact with the light fitting or the light itself and switched on the light.

3. [20]

   Elise and Reggie were cross-examined briefly. They were not challenged. They were truthful witnesses. Their evidence diverged in some minor respects as one might expect. Their evidence is consistent with what was said and done contemporaneously with the disaster.

4. [21]

   On the other hand, Bundock was an unsatisfactory witness, whose evidence as to what she did with the bedding on the day I do not believe.

5. [22]

   Reggie gave evidence that he received a phone call from Bundock who told him that the house was on fire and that all she had done was to take the bed sheets off the clothesline and place them in the room. She told him that she had put them on a shelf in the bottom bedroom. He asked her whether she was aware that there was a light above the shelf, and she said no, it had all happened so quickly. He asked her whether she knew whether she covered the light with the bedsheets and she said no.

6. [23]

   Reggie also gave evidence that in the presence of another Domain employee and a police officer, Bundock confirmed that she had removed the bedsheets from the clothesline and potentially covered the wall mounted light in the room where the fire started.

7. [24]

   Bush gave uncontroverted evidence that soon after the fire, in the presence of others, including his de facto partner, Lynne Emanuel (Emanuel), Bundock said words to the following effect:

8. [25]

   Emanuel gave uncontroverted affidavit evidence that on the day of the fire, Bundock said to her and Bush that she had been cleaning up the house before the open house and had taken sheets off the veranda and thrown them “in the back bedroom on a cupboard against a light….and they caught alight”.

9. [26]

   Emanuel also gave uncontroverted evidence that Bundock said to her and Bush that there had been sheets on the balcony that were “dry and hot”, and “so I took them all in and piled them up and threw them on top of a shelf. The shelf was really close to a light. The fire started in that room where I threw the sheets”.

10. [27]

    On or about 10 June 2019, Emanuel prepared a statement as to the events on the day of the fire, which was annexed to her affidavit. She was not cross-examined.

11. [28]

    It is not necessary to resolve whether the bedding was damp or dry. In a joint statement of agreed facts, the parties agreed that it was damp, and I proceed on that footing, observing, however, first, that the washing had been on the clothesline for some hours and how damp it was is incapable of measurement or any specific finding, and, second, that the only evidence of Bundock’s understanding of how wet it was is Emanuel’s evidence that Bundock had said that it was hot and dry.

12. [29]

    In her affidavit evidence and under cross-examination, Bundock disputed that she had ever said this and maintained that she had collected a damp quilt cover and damp sheets and “draped” them over the front of the shelf, so that they were hanging and would not crush, because she planned to hang them back on the clothesline at the end of the open house. She gave evidence that she did not place any articles on the shelf on top of the bedding to prevent it from falling or sliding off the shelf.

13. [30]

    There is in evidence a photograph of the room on which Elise or Reggie drew in red marker their recollection of the size and placement of the steel cabinet. On each of the lateral extremities they drew what appears to be a semicircular railing, which, if the bedding had been draped over them, would have meant that it would have been closer to the light fitting than the surface of the shelf.

14. [31]

    Bundock gave evidence that the house was particularly untidy on that day. While she did not accede to the proposition that she was in a hurry to tidy it up, she made it clear that some effort was involved in doing it.

15. [32]

    I do not believe Bundock with regard to what she says she did with the bedding, principally because her evidence conflicts with unchallenged evidence that, contemporaneously with the catastrophe, she made statements that she had acted differently to the way she now says she did in her affidavit sworn almost 4 years after the event, and in oral evidence given in the trial. I find that her denials of having said what she is reported to have said and her denials that she did what she is reported to have done, are untruthful.

16. [33]

    By way of reinforcement, and in no particular order of precedence, the following considerations are pertinent:

    1. (1)

       she gave implausible evidence of never having known, and to this day not knowing, whether there was a light fixture above the shelf, in the face of her own evidence, that she had been to the house on a number of earlier occasions and that her invariable practice is to turn on all the lights, and her reported statements of having thrown the bedding onto the shelf against the light;

    2. (2)

       she gave evidence that potential buyers would have been shown into the room. I regard it as inherently more likely that she would have stowed the bedding on top of the shelf, where it would have been less visible, rather than have draped it over the shelf in full view;

    3. (3)

       it is implausible that a quilt cover and two sheets would not fall to the ground without some ballast on them, given that no part of them was hanging over the back of the shelf;

    4. (4)

       her statement to Reggie that she did not know if she had covered the light is inimical to her suggestion of draping, because had she draped the bedding there would have been no scope for her not to have known that any light was covered or not;

    5. (5)

       given that the house was, as she put it, very untidy and that she had to make it tidy within a relatively short space of time, I think it is more likely that what she did was slap-dash rather than careful. That is, I think it is more likely that she threw the bedding on top of the shelf rather than engaged in the exercise of draping it;

    6. (6)

       her evidence was clearly coloured by a heightened awareness that she had caused the catastrophe; and

    7. (7)

       she was an aggressive and uncooperative witness.

What Caused the Fire?

1. [34]

   Bush and Domain each called a forensic fire investigating expert.

2. [35]

   Bush called Mr Phillip Glover (Glover), a career firefighter of 40 years and subsequently an investigator. Glover opined that the probable origin of the fire was the bedding which had been placed on the shelf. In forming his conclusion, he relied, amongst others, on what he referred to as the reliable accounts of the circumstances of the fire. He opined that the timeframe between the light being switched on and the time the fire was discovered was sufficient for the damp bedding to be dried to a point where it would be ignited by heat from the light.

3. [36]

   Domain called Mr Peter Jeffrey (Jeffrey), a chartered chemist with degrees in chemistry and forensic science and qualifications in investigative services. He was a police officer for 3 years. Jeffrey made reference to various provisions of the American National Fire Protection Association 921: Guide for Fire and Explosion Investigation as well as to the Australian Standard 5388: Forensic Analysis. He referred to a provision in the American instrument to the effect that where all hypotheses have been rejected, or if two or more hypotheses cannot be rejected, the only choice for the investigator is to conclude that the fire cause, or specific causal factors, are undetermined. The provision further states that it is improper to base hypotheses on the absence of any supportive evidence or to opine a specific fire cause, ignition source, or fuel that has no evidence to support it, even though all other hypothesised elements were eliminated.

4. [37]

   Jeffrey opined that Glover’s opinion was not consistent with accepted methodology for reporting on the cause of a fire, in particular his reliance on prior circumstances and the presence of ignition sources to determine the origin of the fire, failure to consider any alternate origins or causes of the fire, and failure to provide citations for data or ensure that data was relevant and appropriate to the matter.

5. [38]

   Jeffrey did not agree with Glover’s conclusion as to the probable cause of the fire and, on the footing that it was not supported by sufficient data, concluded that it cannot be established whether it is even possible in the circumstances. He opined that at best it is “merely suspected” and that the cause of the fire must be considered undetermined.

6. [39]

   Jeffrey opined that the approximately 20-minute timeframe between Bundock placing the bedding on the shelf and discovering the fire was the key consideration. He considered that there is sufficient cause to doubt whether the hypothesis that this caused the fire is even possible in such a timeframe, particularly considering the bedding was wet and potentially 20-30cm from the fitting.

7. [40]

   Glover and Jeffrey attended a conclave and produced a joint report in which they both adhered to their opinions.

8. [41]

   They agreed that:

9. [42]

   They agreed that ignition sources considered in the area of origin include: heat from the relevant light fitting, globe failure, electrical failure of the light fitting, the light switch, a central ceiling light (although there does not appear to have been one), office equipment, battery operated devices and chargers (although it was not known if any office equipment was there), a candle (which was apparently in the wicker basket that Bundock brought into the room – although there is no suggestion of any means in which the candle could have caught alight other than in the fire itself), and the activities of cleaners who had been in the room earlier that day (although no such activities were identified).

10. [43]

    Jeffrey also made some observations about the rarity nowadays of incandescent lights (which generate greater heat than LED or fluorescent ones).

11. [44]

    I record that Domain took objection to Glover’s report on the basis that there was an absence of facts to which his expertise could be applied to yield any relevant opinion.

12. [45]

    I did not uphold the objection because in my view, with his extensive firefighting experience and having regard to the reliable accounts of the fire (which I consider is rationally permissible), he was in a position to express an admissible expert opinion as to the origin of the fire. But that having been said, I have not found it necessary in reaching my conclusion to place any reliance on his opinion because the factual evidence, and inferences properly drawn from it, establish that Bundock’s actions were the probable (if not the certain) cause of the fire.

13. [46]

    As recorded earlier, the key consideration for Jeffrey is that the 20-minute timeframe is sufficient cause to doubt the hypothesis that the bedding caught alight considering it was wet and potentially 20-30cm from the fitting. First, and perhaps not especially important, is that the parties agreed that the bedding was damp rather than wet. But more importantly, his assumption that the bedding was potentially 20-30cm from the fitting is undermined by the evidence. The key consideration for him thus rests on a false premise.

14. [47]

    Domain placed importance on the agreement between the experts that if the maximum heat of the light, with no heat escape, is lower than the autoignition temperature of the bedding, then ignition cannot occur. This is self-evidently correct, but it says nothing of whether sufficient temperature was in fact reached.

15. [48]

    Self-evidently, the closer something is to a light the hotter it will be made, and the less air escape there is, the hotter it will get.

16. [49]

    Jeffrey was cross-examined briefly and the Court asked him a few questions. The following was the final exchange between the Court and Jeffrey:

17. [50]

    His evidence admitted of the possibility that Bundock caused the fire, but he was not prepared to accept the probability of it.

18. [51]

    On the other hand:

    1. (1)

       there is no basis in the evidence to conclude that any of the other supposed possible ignition sources was probable (or for that matter realistically possible) in this case;

    2. (2)

       the bedding was not in the room until Bundock put it there by throwing it so that it was against the light fitting or the light;

    3. (3)

       the light was not on until Bundock turned it on;

    4. (4)

       there was no fire at the time she did those things; and

    5. (5)

       20 minutes later, there was a fire in that room.

19. [52]

    In the end result Jeffrey’s evidence was neither compelling nor persuasive.

20. [53]

    I consider it to border on the fanciful to suggest that, Bundock having done what she did, the fire was a mere coincidence.

21. [54]

    On the balance of probabilities, I find that Bundock caused the fire.

22. [55]

    The following sections of the Act are pertinent.

23. [56]

    References below to sections are unless otherwise stated, or the context indicates otherwise, references to the Act.

24. [57]

    Reliance was also placed on s 60 of the ACL (which is in Chapter 3 of the ACL). The relevant provisions of the ACL are set out below.

25. [58]

    The plaintiffs and Bush submit that:

    1. (1)

       Domain, through its employee Bundock, breached its duty to take reasonable care to prevent damage to their personal property and the house respectively;

    2. (2)

       the content of the duty was to take reasonable precautions or care to prevent damage to their property;

    3. (3)

       the risk of harm from doing what she did was reasonably foreseeable, not insignificant, and a reasonable person in her position would have taken reasonable precautions, which were not to put the washing on the shelf in the manner she did and then turn on the light; and

    4. (4)

       her negligence, that is, her failure to exercise reasonable care and skill caused the harm within the general principles set out in s 5D.

26. [59]

    Bush also argues that Bundock’s actions were in breach of the guarantee in s 60 of the ACL because Domain’s services were not rendered with due care and skill.

27. [60]

    Domain submits that the plaintiffs and Bush have not established that the requirements of s 5B(1) have been met and that:

    1. (1)

       the risk of harm of a fire being caused in these circumstances is not something a reasonable person in Ms Bundock’s position knew or ought to have known;

    2. (2)

       the risk of harm was so improbable given all the factors that must exist for the risk of harm to eventuate that a reasonable person would not have taken precautions to avoid it; and

    3. (3)

       there is social utility in a real estate agent tidying a property in the ordinary course of her employment to make a house neat and presentable.

28. [61]

    Additionally, Domain submits that both the plaintiffs and Bush caused the damage and loss that was suffered by failing to convey to Bundock that if the light was on, the shelf would heat up and that any damages for which Domain would otherwise be liable should be reduced to nil.

29. [62]

    Section 5B refers to failing to take precautions against a risk of harm.

30. [63]

    In this case, Bundock actively created the risk of fire and the consequent harm. Once having created the risk, she took no precautions against it.

31. [64]

    That a fire might be caused by putting or throwing bedding up against a burning light is obvious. That risk was plainly foreseeable, and Bundock ought to have known this. A reasonable person would not have created that risk of harm but if they did, would have taken precautions against that harm eventuating.

32. [65]

    I reject Domain’s submission that s 5B(2)(d) applies.

33. [66]

    I do not consider that where s 5B(2)(d) refers to social utility of the activity that creates the risk of harm, it has in mind a privately retained real estate agent making a privately owned house tidy or presentable for sale. There is no social element in such activity. But if the section does have such an activity in mind, it still remains that a reasonable person would have taken precautions against the harm in question.

34. [67]

    I find that Bundock’s negligence caused the harm in this case.

35. [68]

    I reject Domain’s suggestion that either the plaintiffs or Bush caused the loss or damage that is the subject of their claims. The submission is made in the context where none of the plaintiffs could have possibly or remotely conceived that Bundock might do what she did. There was no occasion which could reasonably have called for the suggested disclosure. Bundock acted on her own motion. Her actions were the sole cause of the harm.

36. [69]

    It was not suggested on behalf of Domain that presenting the house for the open house was not part of the services to be rendered by Domain. In the circumstances, it follows from the findings I have earlier made, that Domain breached that guarantee.

37. [70]

    I note that counsel for Bush submitted that Bush’s claim under s 60 of the ACL is not an apportionable claim under s 34(1)(a) of the Act. However, he did not develop the submission. Given that I do not consider that the plaintiffs or Bush in any way caused the loss or damage suffered by any of them, it is not necessary to deal with the submission. I do, however, observe that the only difference between the terminology of s 5 which defines negligence, and the content of the warranty given by s 60 of the ACL, is that the former refers to reasonable care and skill and the latter to due care and skill. Section 34(1)(a) refers to a failure to take reasonable care. I have significant doubt that there is material difference between taking reasonable care and taking due care.

38. [71]

    The Court makes the following orders:

    1. (1)

       Judgment for:

    2. (2)

       Judgment for the first cross-claimant against the first cross-defendant for $740,842.93 together with interest from 26 May 2019 to the date of judgment.

    3. (3)

       The first cross-claim is otherwise dismissed.

    4. (1)

       Judgment for:

In proceedings 2021/00348199

1. [72]

   The parties are to bring in short minutes reflecting these orders and including calculations of interest to the date of judgment.

2. [73]

   In proceedings 2021/00268164, I provisionally order that the second defendant/first cross-defendant pay the costs of the first plaintiff, the second plaintiff, and the first cross-claimant.

3. [74]

   In proceedings 2021/00348199, I provisionally order that the defendant pay the costs of the first plaintiff and the second plaintiff.

4. [75]

   The orders for costs will solidify within 7 days unless any party who seeks a different order notifies the other parties and my associate in writing of the orders sought and states brief reasons why, in which event the orders will not take effect and I will give directions for the resolution of any costs issues.

5. [76]

   The exhibits are to be returned.