Neil Gibson v John Edwin Eastgate

The appeal concerned a claim brought by Neil Gibson against John Edwin Eastgate. Gibson alleged that Eastgate, as an owner-builder, owed him a duty of care to avoid causing economic loss. The dispute ultimately came before the Court of Appeal of New South Wales.

The central legal issue before the court was whether a passive co-owner who undertakes building work on a property owes a duty of care to subsequent purchasers of that property to avoid economic loss arising from defects in the building work.

The Court of Appeal held that a passive co-owner, in the absence of any assumption of responsibility or reliance by the purchaser, does not owe a duty of care to subsequent purchasers for economic loss. The court reasoned that the builder's liability for defective work is generally governed by contract, and extending a duty of care in tort to subsequent purchasers in this context would be an unwarranted expansion of liability. The court distinguished this situation from cases where a builder directly contracts with a purchaser or where there is a specific assumption of responsibility.

Leave to appeal was granted, the filing and service of the notice of appeal were dispensed with, and the appeal was dismissed with costs.