Agent pays for burning home during open house

By Resolve Editor Kate Tilley

A Sydney real estate agency must pay more than $850,000 after an agent inadvertently burnt down a home only a week before it was to be auctioned.

The NSW Supreme Court judgement for $862,318.81 against Domain Residential Northern Beaches included more than $740,000 to the homeowner and the rest to tenants and residents for their destroyed property.

The agency almost must pay interest from the day after the 25 May 2019 fire until 19 March 2024 when the judgement was delivered.

The two-storey Avalon Beach home was owned by Peter Alan Bush and rented to Elise Louise Coulter and Joshua Reginald (Reggie) Songaila. Two other people also lived there.

Julie Bundock worked for Domain and was at the home to conduct an open house while the residents were absent.

Core dispute

Ms Bundock took a quilt cover and two queen size bedsheets that were hanging on a deck at the front of the house and put them in a downstairs room on a steel shelf that was the top of a clothing cabinet. The shelf was 20cm to 30cm under a light fitting and Ms Bundock turned the light on.

Justice David Hammerschlag said the core dispute was what caused the fire.

The owner and occupants argued that the bedding had ignited and Domain was responsible because Ms Bundock had put the bedding there and turned the light on.

Domain argued that not all other possible sources of ignition had been excluded and evidence did not establish whether a lightbulb could have caused the bedding to have ignited within 20 minutes, or at all, and that there was no evidence the heat generated from the lightbulb was capable of doing so.

Domain also argued any damages should be reduced to nil because neither the owner nor the occupants shared knowledge that if the light was turned on, the shelf would get hot.

Unsatisfactory witness

Justice Hammerschlag said Ms Bundock was “an unsatisfactory witness” and her claim to have “draped” the bedding over the shelf was untrue.

Mr Bush gave uncontroverted evidence that, soon after the fire, in the presence of others, Ms Bundock said words to the effect: “Oh my God Pete, I think I have burnt down your house. I had been doing some tidying up. I collected some sheets drying on the veranda and threw them on top of a freestanding metal shelving in the bedroom under the stairs. I just threw them there, Pete, right up against the light on the wall. I think that’s what started the fire.”

In her affidavit and under cross-examination, Ms Bundock disputed ever saying those words and maintained she had collected a damp quilt cover and damp sheets and “draped” them over the front of the shelf, so they were hanging and would not crush, because she planned to hang them back on the clothesline after the open house.

Ms Bundock’s evidence was 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 some effort was involved in doing it,” Justice Hammerschlag said.

He did not believe her evidence about what she did with the bedding nor her denials about what she said after the fire. It was “implausible” that she now claimed not to know the light was there, given she had been to the house several times previously and “her invariable practice is to turn on all the lights”.

Slap-dash not careful

It was more likely she would have stowed the bedding on top of the shelf, where it would have been less visible to potential buyers, than draped it over the shelf. Given Ms Bundock was trying to tidy the home quickly, “it is more likely that what she did was slap-dash rather than careful”.

Justice Hammerschlag said Ms Bundock was “an aggressive and uncooperative witness” whose evidence was “clearly coloured by a heightened awareness that she had caused the catastrophe”.

Both parties had fire investigators give evidence. Mr Bush’s expert’s opinion was that the bedding had been ignited by heat from the lamp. Domain’s expert said the cause was undetermined and, at best, it was “merely suspected” that the bedding had ignited.

But Justice Hammerschlag found, on the balance of probabilities, that Ms Bundock caused the fire.

There was no evidence of other realistically probably ignition sources. It “borders on the fanciful to suggest that … the fire was a mere coincidence”, following Ms Bundock’s actions in putting the bedding in the room and turning on the light.

Justice Hammerschlag disagreed that the risk of harm was so improbable that a reasonable person would not have known of it.

Risk plainly foreseeable

He said Ms Bundock “actively created the risk of fire and the consequent harm. Having created the risk, she took no precautions against it. That a fire might be caused by putting or throwing bedding up against a burning light is obvious.

“That risk was plainly foreseeable, and Ms 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.”

Justice Hammerschlag rejected Domain’s argument there was “social utility in a real estate agent tidying a property in the ordinary course of her employment to make a house neat and presentable”.

He said the clause in the Australian Consumer Law about social utility of an activity that creates the risk of harm did not have 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.”

Justice Hammerschlag said Ms Bundock’s negligence caused the harm and neither the owner nor the occupants had any role in causing the loss.

Coulter v Bush; Coulter v Domain Residential Northern Beaches Pty Ltd [2024] NSWSC 267 (19 March 2024)