Gunston v Lawley

Gunston v Lawley involved a dispute between the plaintiff, Gunston, and the defendant, Lawley, in relation to economic losses arising from the construction of a residential building. The case was heard in the County Court of Victoria. The plaintiff, as the proprietor of the building, alleged that the defendant, an architectural draftsman, breached a duty of care owed to both the proprietor and subsequent purchasers of the building. The defendant admitted to a breach of duty but contested the extent of his responsibility and the appropriate allocation of liability.

The primary legal issue before the court was whether the defendant was liable for economic losses incurred by the plaintiff due to the defective design and construction of the building. The court had to determine the extent of the defendant's duty of care and the principles applicable in apportioning liability among concurrent wrongdoers. The court was also tasked with interpreting the application of the Wrongs Act 1958 Part IVAA in relation to proportionate liability and the allocation of surplus settlement sums. The court needed to decide if the costs awarded should reflect the proportionate responsibility of the concurrent wrongdoers for the plaintiff’s loss and damage.

The court held that the defendant was liable for economic losses due to the breach of duty of care. The court emphasised that the duty of care of an architectural draftsman extends to both the original proprietor and subsequent purchasers of the building. Regarding proportionate liability, the court noted that while the plaintiff had settled with another party for an amount greater than the Tribunal's finding of the defendant's responsibility, this did not automatically entitle the defendant to a reduction in liability. The court ruled that the surplus settlement sum should be applied in accordance with the statutory provisions of the Wrongs Act 1958 Part IVAA. The court ordered that the costs against the concurrent wrongdoers should be proportionate to their respective responsibilities for the plaintiff's loss and damage. The court also clarified that the application for costs should be considered in the context of the overall settlement and the principles of fairness and justice.