Randwick City Council v T & H Fatouros Pty Ltd

Randwick City Council (the appellant) appealed to the Court of Appeal of New South Wales against a judgment that found it liable in negligence to T & H Fatouros Pty Ltd (the respondent). The dispute arose from economic loss suffered by the respondent, which had paid damages to a third party injured on an external stairway attached to the respondent's building. The respondent contended that the Council owed it a duty of care in the exercise of its statutory powers and functions concerning the construction and safety of the stairway.

The central legal issues before the Court of Appeal were whether the appellant owed the respondent a duty to take reasonable care to prevent the third party's injury, and consequently, the respondent's economic loss. This involved determining the scope of the appellant's statutory powers and responsibilities under the Environmental Planning and Assessment Act 1979 (NSW) and the Environmental Planning and Assessment Regulation 1994 (NSW), particularly in relation to the approval, inspection, and fire safety compliance of the stairway. The court considered whether the Council's actions, including issuing fire safety orders and notices, extended to assuming supervision of the entire building for fire safety purposes, and whether specific clauses of the Regulation mandated the inclusion of stairway safety measures in fire safety schedules.

The Court of Appeal found that the appellant did not owe the respondent a duty of care in negligence. The court reasoned that the statutory framework did not impose a duty on the Council to supervise the building in a manner that would prevent economic loss to the owner arising from injuries to third parties. The Council's powers and functions were directed towards ensuring compliance with building and fire safety standards, not towards assuming responsibility for the safety of individuals using the property or indemnifying the owner against liability for injuries. The court concluded that the trial judge had erred in finding a duty of care and that the Council's actions, as described, did not create such a duty.

Consequently, the appeal was upheld. The judgment and orders of the trial judge were set aside, and judgment was entered for the appellant. The respondent was ordered to pay the appellant's costs of both the appeal and the trial, with the respondent to have a certificate under the Suitors' Fund Act 1951 (NSW) in respect of the appeal, provided it met the relevant qualifications.