Termites eating out of house and home: the Henry v Bentley [2024] case

It is crucial to conduct a thorough pre-purchase inspection when buying a home to identify any underlying issues that may not be immediately visible. In particular, a pest inspection is vital for uncovering infestations or structural damage caused by termites or other pests. Repairing pest damage can be both costly and time-consuming, so it’s crucial to engage a professional pest inspector before purchasing. After all, you don’t want to buy a dream home only to find out it’s a pest’s paradise!

A hidden infestation of trouble: Henry v Bentley [2024]

In December 2016, newly married couple, the Henrys’, purchased a property in Ballarat from a deceased estate, with hopes of making it a home. However, two years later, in 2018, after returning from their holiday, the couple discovered their ensuite littered with dead insects. A year after that in 2019, they discovered live termites in their door frame.

Before settling, the couple conducted a pre-purchase and pest inspection service with an experienced property and pest inspector. The respondent, Mr Bentley provided a report that there were no termites and no termite damage. Upon this representation the Henrys’ purchased this property. However, following the discovery of live termites, the Henrys engaged with other pest inspector and builders only to find that their house was infested, and their roof was in danger of collapsing and the house was deemed unsafe to live in.

All seven building inspectors advised the Henrys that their house could not be repaired, and they had to demolish and rebuild. A second pest inspector found that there was indeed evidence of termite activity as traces of termite treatment was found. The pest inspector and expert entomologist confirmed that the damage indicated termite activity of between 5 to 10 years and should have been identified during the pre-purchase inspection.

With no other option, the applicants were forced to demolish their home and rebuild it, incurring costs totalling $423,563.67.

Termites don’t just bite, they cost big!

In 2022, the applicants commenced a proceeding at the Victorian Civil and Administrative Tribunal (VCAT) against the respondent to recover their costs as they claimed that the pre-purchase inspection was not conducted with due care and skill in contravention of section 60 of the Australian Consumer Law (ACL), the “no termite damage” representation was misleading and deceptive in contravention of section 18 of the ACL and the report was not fit for purpose in contravention of section 54 of the ACL.

The applicant’s witnesses- a builder, a pest inspector and an entomologist-  confirmed that there was no other option but to rebuild, as the damage caused was so extensive. This was due to the prolonged termite activity, implying that the respondent was negligent in the initial pre-purchase pest inspection and should have identified the termite activity. The tribunal member agreed with the witness findings and ordered for the respondent to pay the sum of $423,563.67.

Despite the respondent claiming that he was limited to a ‘visual inspection only’ provision as per his contract, the tribunal member found that the scope and limitation provision did not have an impact on the findings that the respondent failed to act with due care and reasonable skill during his pre-purchase inspection.

This case highlights the importance for consumers to understand their rights and that they are entitled to services that meet specified standards, and if those standards are not met by negligent service provider, they can seek appropriate remedies. This ruling represents a shift in previous cases limited by the ‘visual only’ provisions, setting a stronger precedent for holding service providers accountable.

Don’t let them termites hide the truth

In addition, even though the issue of material facts was not directly relevant to this case, the importance of material facts in property transactions can be inferred. Material facts- such as past or present pest infestations- are crucial in ensuring a fair and transparent transaction, that includes disclosing any pest activity. In this case the tribunal highlights how material facts influence a buyer’s decision and should be disclosed to avoid significant legal and financial consequences, including claims of negligence. For buyers, this can be unforeseen costs, major repairs or in the worst cases, demolition, and reconstruction, exactly what the Henrys experienced. Vendors who fail to provide accurate and complete information may be liable for resulting losses. Our team is dedicated to ensuring that your rights are protected and that you make fully informed decisions, whether you are buying or selling property.

At Brand Partners, we are committed to providing expert legal advice on consumer disputes service agreements and breach of contract matters. If you are facing a similar issue, our team of experienced lawyers is here to assist you in resolving your case efficiently and effectively.