Grichting v Municipality of Meander Valley

[2001] TASSC 110

[2001] TASSC 110

CITATION:           Grichting v Municipality of Meander Valley [2001] TASSC 110

PARTIES:  GRICHTING, Wolfgang Leo
  GRICHTING, Eileen Wood
  v
  MEANDER VALLEY, Municipality of
  BRACEY, Malcolm John
  BRACEY, Phyllis Anne
  ROWLINGS, David
  ROWLINGS, Janet

TITLE OF COURT:  SUPREME COURT OF TASMANIA
JURISDICTION:  ORIGINAL
FILE NO/S:  349/1993
DELIVERED ON:  11 September 2001
DELIVERED AT:  Launceston
HEARING DATE/S:  3 September 2001
JUDGMENT OF:  Crawford J

CATCHWORDS:

Procedure - Supreme Court procedure - Tasmania - Practice under Rules of Court - Amendments - Statement of Claim - Whether amendment introduced statute-barred cause of action.

Ritchie & Parker Alfred Green & Co v Gornalle [2000] TASSC 8, referred to.

Aust Dig Procedure [276]

REPRESENTATION:

Counsel:
           Applicants (Plaintiffs):  C R Doherty
           First Respondent (First Defendant):     W M Griffiths
Solicitors:
           Applicants (Plaintiffs):  Toomey Maning & Co
           First Respondent (First Defendant):     S B McElwaine

Judgment ID Number:  [2001] TASSC 110
Number of paragraphs:  13

Serial No 110/2001
File No 349/1993

WOLFGANG LEO GRICHTING AND EILEEN WOOD GRICHTING v
THE WARDEN, COUNCILLORS AND ELECTORS OF THE MUNICIPALITY OF MEANDER VALLEY, MALCOLM JOHN BRACEY, PHYLLIS ANNE BRACEY, DAVID ROWLINGS and JANET ROWLINGS

REASONS FOR JUDGMENT  CRAWFORD J
  11 September 2001

1. The plaintiffs seek leave to amend their statement of claim.  The first defendant opposes the application.  The second, third, fourth and fifth defendants consent.  The third party is not troubled by it. 

1. The only bases on which the first defendant opposes the application are that the statement of claim in its present form pleads no cause of action; that any cause of action which would be pleaded by way of a proposed amended statement of claim must be regarded as being pleaded for the first time; that any new cause or causes of action against the first defendant must have arisen over six years ago; and that allowing the amendments will permit the plaintiffs to plead a cause of action which is barred by the six year limitation period prescribed by the Limitation Act 1974 and will be in breach of the so-called rule in Weldon v Neal (1887) 19 QBD 394.

1. The plaintiffs' case includes the following pleaded facts.  The fourth and fifth defendants carried on the business of designing and drawing plans for the construction of houses and held themselves out as being competent to do so.  In about October 1985, for the second and third defendant's for reward, they designed and drew plans, including a site plan, for the construction of a house.  By October 1986 the second and third defendants had built the house.  In 1989 the second and third defendants sold the property to the plaintiffs.  Since in or about 1992 extensive cracks have developed in the concrete slab foundation and in the external masonry walls and the internal walls. 

1. The plaintiffs sued the second and third defendants for damages for negligence arising out of the foundations and the construction of the house, for breach of a statutory duty created by the Building Regulations 1978 and for breach of implied terms of the contract of sale of the property, namely that the house was built in a proper and workmanlike manner and was reasonably fit for the purpose of a dwelling.  The plaintiffs sued the fourth and fifth defendants for damages for negligence arising out of their design of the house and for breach of a statutory duty created by the Building Regulations 1978. 

1. I deal next with the plaintiffs' case against the first defendant.  The writ, which was filed on 14 October 1993, contained an endorsement of claim which provided (inter alia) that the plaintiffs' claim against the first defendant was for damages for breach of statutory duty and for negligence in respect of the first defendant's approval of the design and of the plans and specifications for the construction of the residence.  The statement of claim was dated 11 July 1995.  Against the first defendant it pleaded relevantly as follows.  The first defendant was the successor to the legal liabilities of the Municipality of Westbury (par1).  In February 1986 the municipality approved the plans for the house including a site plan, which had been drawn by the fourth and fifth defendants, and issued a building permit in respect of the house (par4).  At the time of their purchase of the house and land from the second and third defendants, "the plaintiffs relied upon ... the skill and judgment of the local Council [and therefore the Municipality of Westbury] in approving the plans for the construction and siting of the house, and in issuing the building permit" (par8).  The municipality "[and therefore the first defendant] assumed responsibility as regards, inter alia, the plaintiffs, that the design and siting of the house contained in the plans was suitable for the site" (par10).  Paragraph 13(b) pleaded:

"13     The defects have been caused by:

...

[b]the negligence and breach of statutory duty of the Municipality of Westbury, its servants or agents [for whose negligence the first defendant is liable];

Particulars

[i]Failing to properly assess the adequacy of the foundations proposed for the house, contrary to regulation 223[1] of the Building Regulations, 1978 [as amended];

[ii]Approving the plans without having complied with the said regulation;

[iii]Approving a foundation composed almost entirely of uncompacted fill;

[iv]Approving the plans, which contrary to regulation 225B[1] of the Building Regulations 1978 [as amended], were not designed so that any relative movements of the footing and any other elements of the substructure would not impair the stability of or cause significant structural damage to the superstructure."

1. Finally, the statement of claim pleaded that, by reason (inter alia) of the breach of statutory duty and negligence of the first defendant the plaintiffs had suffered loss and damage and had been put to expense (par15).  Particulars provided in the statement of claim were diminution in the value of the house, the cost of remedial works necessary to make good the defects and construct adequate footings for the house and the cost of removal and storage of the plaintiffs' chattels in the house, and alternative accommodation for the plaintiffs, during the remedial work. 

1. Counsel for the plaintiffs explained why they were seeking leave to amend the statement of claim.  They had pleaded reliance in par8 and assumption of responsibility by the municipality in par10, because reliance and assumption of responsibility appeared at that time to have been accepted by the High Court in cases such as Bryan v Maloney (1995) 182 CLR 609 as necessary elements for the establishment of a relationship of proximity between the parties, and a consequent duty to take reasonable care, where the damages claimed are for economic loss. See Mason CJ, Deane and Gaudron JJ at 617 - 619, 624 and 627 (as to proximity, reliance and assumption of responsibility) and Toohey J at 663 (as to proximity only). However, most of the current members of the High Court no longer rely so heavily on proximity, reliance and assumption of responsibility. See for example Perre v Apand Pty Ltd (1999) 198 CLR 180.

1. As a consequence of the perception of the plaintiffs' legal advisors that there has been a shift in judicial pronouncements of the relevant law so far as its application to the facts of this case are concerned, they now seek to amend the statement of claim so as to conform with their understanding of where the members of the High Court presently stand.  The amended pleading retains reliance on the part of the plaintiffs and assumption of responsibility by the municipality, but adds the plaintiffs' vulnerability to the municipality, their membership of an ascertained and limited class of subsequent owners of the house and of there being a high degree of forseeability that losses of the kind suffered by them would result from the municipality's negligence, all concepts which can be found scattered among the reasons for judgments of members of the court in Perre v Apand Pty Ltd (supra).

1. However, so far as their pleading of negligence is concerned in both the original statement of claim and the proposed amended statement of claim, it will remain the plaintiffs' case that they suffered economic loss by reason of the negligence of the municipality in failing to properly assess the adequacy of the foundations proposed for the house, by inappropriately approving the plan for the house and by approving a foundation composed almost entirely of uncompacted fill without ensuring that the design prevented instability. 

1. This is a case which falls within the dicta of Kelly J in Golski v Kirk (1987) 72 ALR 443 at 451, that "where the proposed amendments do not change the cause of action but do no more than particularise the facts by which the respondent proposes to sustain it ... (the) amendment will be allowed". Kelly J added that would be the case "even though the facts sought to be brought forward under the amendment are quite different from those originally alleged". With the exception of that addition, his Honour's dicta was approved by the members of the Full Court in Ritchie & Parker Alfred Green & Co v Gornalle [2000] TASSC 8. The plaintiffs are not seeking to set up a new cause of action by their amendment. They are merely seeking to plead facts additional to those previously pleaded, in an attempt to conform with recent judicial pronouncements upon what is undoubtedly a most difficult area of the law. The cause of action, if there is a valid one, remains the same.

1. It will be a matter more appropriate for the trial judge to determine, on the evidence presented at the trial, whether in fact the plaintiffs have a valid cause of action maintainable against the first defendant.  I express no view about that.  What I determine is that the plaintiffs should have leave to amend their statement of claim, in so far as it concerns the first defendant.  I add that counsel for the first defendant raised no reason why leave to amend should not be granted, other than the reason with which I have dealt.  I am satisfied that no injustice will be suffered by the first defendant if the amendments are allowed.  Its counsel did not assert to the contrary.

1. In view of what I have said and having regard to the consents of the other parties, the following orders will be made:

1That the plaintiffs have leave to file and deliver an amended statement of claim in the form annexed to the interlocutory application filed on 1 August 2001, within seven days.

2That the defendants deliver their respective defences to the amended statement of claim within 21 days of delivery of it to them.

3That the plaintiffs pay the defendants' and third party's costs thrown away as a consequence of the delivery of the amended statement of claim in any event.

4That the plaintiffs pay the second and third defendant's costs of and incidental to the interlocutory application in any event.

1. I will invite submissions from the plaintiffs and the first defendant concerning what if any order should be made between them concerning the costs of the interlocutory application.