Negligence—Public authority—Duty of care—Foreseeability and proximity—Reliance—Character of loss—Municipal council regulating construction of buildings—Whether duty to ensure construction in accordance with statute and plans—Power to inspect—Negligence in inspection—Failure of subsequent purchaser to inquire—Local Government Act 1919 (N.S.W.), Pt XI. Local Government (N.S.W.)—Building control—Inadequate footings—Whether negligence in inspection—Failure of subsequent purchaser to obtain certificate of compliance—Local Government Act 1919 (N.S.W.), Pt XI.
Decisions
GIBBS C.J.: This is an appeal from a decision of the Court of Appeal of the Supreme Court of New South Wales, affirming a decision of Robson D.C.J. given in favour of the respondents, the plaintiffs in an action brought against the appellant, the Council of the Shire of Sutherland ("the Council"). The appeal raises for decision the important questions whether a local authority in New South Wales which gives approval to the erection of a dwelling house owes to persons who subsequently become the owners and occupiers of the house a duty to take reasonable care to ensure that the building is constructed in conformity with the plans and specifications which it has approved, and what duty, if any, it owes to such persons in deciding whether to make inspections, and in carrying out such inspections as are made, during the construction of the building. The special leave to appeal which was granted by this Court was limited to prevent the appellant from raising a further question regarding the limitation period in an action of this kind.
2. In January 1975 the respondents purchased a house at 14 Bridgeview Road, Engadine, in the Shire of Sutherland, and went into occupation. The land on which the house was built fell very steeply away from the front to the rear of the allotment, and the house was supported by nine brick piers and three steel columns, as well as by the brick walls of a laundry which was underneath the rear of the house. Some of the ground in which the piers and columns stood consisted of unstable rock and soil, and this fact made it particularly necessary that the foundations of the piers and columns should be secure. In fact some of the footings were quite inadequate; a number of them were founded on material which did not afford them proper support and they allowed the piers and columns resting on them to subside, causing damage to the house - particularly distortion of beams and supports, and cracking in many places. The respondents first became aware of the damage during 1976, and then necessarily incurred expense to remedy the damage already done and to strengthen the foundations. The judgment which they obtained represented the amount of this expense plus interest.
3. By s.311 of the Local Government Act 1919 (N.S.W.), as amended, ("the Local Government Act") a building may not be erected unless the approval of…
Grounds of appeal
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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AGLC
Sutherland Shire Council v Heyman [1985] HCA 41
Case
[1985] HCA 41
Decision Date
CaseChat Overview and Summary
Sutherland Shire Council v Heyman concerned a dispute between the Sutherland Shire Council and Mr. and Mrs. Heyman regarding the Council's alleged negligence in approving building plans that did not comply with the Local Government Act 1919 (NSW). The Heymans, who purchased a property with a building that had been constructed in contravention of Council approvals, sought to recover damages from the Council for the cost of rectifying the defects. The matter ultimately came before the High Court of Australia.
The central legal issue before the High Court was whether a local council owed a duty of care to a subsequent purchaser of a property for economic loss arising from the negligent exercise of its statutory power to approve building plans. Specifically, the Court had to consider the scope of the duty of care owed by public authorities in the performance of their statutory functions and whether such a duty extended to protecting individuals from pure economic loss.
The High Court, in a joint judgment, held that the Council did not owe a duty of care to the Heymans. The Court reasoned that the statutory powers conferred upon local councils are for the benefit of the public at large, not for the protection of individual interests against economic loss. To impose a duty of care in such circumstances would be to create an indeterminate liability for the Council and would unduly fetter the exercise of its statutory discretion. The Court distinguished between a duty to prevent physical harm and a duty to prevent economic loss, finding that the latter was not established in this case. The principles of negligence, particularly concerning the existence of a duty of care, were carefully considered in light of the public nature of the Council's functions.
The High Court dismissed the appeal, upholding the decision of the lower court.