Tepko Pty Ltd v Water Board

The case of *Tepko Pty Ltd v Water Board* involved an appeal to the High Court of Australia concerning a claim of negligent misstatement causing economic loss. The appellants, Tepko Pty Ltd and associated companies, sought to subdivide land which required rezoning and the provision of water supply by the Water Board. The dispute arose from an estimate provided by the Water Board regarding the cost of connecting water to the proposed subdivision, which the appellants alleged was negligently prepared and relied upon to their detriment.

The central legal issue before the High Court was whether the Water Board owed a duty of care to the appellants in providing an estimate for the cost of water connection services. Specifically, the court had to determine if the circumstances surrounding the request for and provision of the estimate, including the Water Board's knowledge of the appellants' serious purpose, their known reliance on the figure, and the Water Board's assumption of responsibility, were sufficient to establish a duty of care. This involved considering whether it was reasonable for the appellants to rely on a "ball-park" figure provided by the Water Board, particularly given the speculative nature of the appellants' development venture and the involvement of political and administrative processes.

A majority of the High Court held that the Water Board did not owe a duty of care to the appellants. The court reasoned that while the Water Board was in a position of advantage regarding the technical assessment of the work required, it was not the sole repository of expertise concerning costing. The appellants had engaged their own experts and could have relied on their advice once the scope of work was known. Furthermore, the court found that any reliance by the appellants on the Water Board's estimate was not reasonable in the circumstances. This conclusion was reinforced by the speculative nature of the appellants' venture, the inherent uncertainties involved, and the political and administrative processes at play, which collectively underscored the unreasonableness of relying on a preliminary estimate from a statutory authority.

The High Court dismissed the appeal, ordering that the style of the respondent be amended to "Ministerial Holding Corporation" subject to further submissions. The appeal was otherwise dismissed with costs.