Gotze v Ylitalo

The Supreme Court of Queensland was asked to decide whether a landlord was liable for damages for the loss of a tenant's business due to the landlord's negligence in constructing the premises. The Gotzes leased premises from Ylitalo for the purpose of operating a roadside food business. The Gotzes claimed that the premises were negligently constructed and that the landlord was liable for the loss of their business due to the defective premises. Ylitalo argued that he was not liable for the tenants' economic loss. The Court held that the landlord was liable for the foreseeable economic loss flowing from his negligent construction of the premises. The Court found that the landlord's negligence in constructing the septic system and the kitchen exhaust and ventilation hood caused the tenants' business to fail. The Court awarded the tenants damages for the loss of their business, the cost of repairs to the septic system, the loss of perishable stock, and the tenants' pain and suffering. The Court rejected the tenants' claims for damages for harassment, loss of reputation, and the cost of acquiring the business. The Court also rejected the landlord's counterclaim for unpaid rent. The Court ordered the landlord to pay the tenants' damages and costs of the action.