Tynan & Ors. v Newcastle City Council

The appellants, Tynan and others, brought proceedings against Newcastle City Council alleging negligence in relation to the approval and inspection of building works. The dispute concerned an extension to a house, where the Council's alleged negligence in inspecting foundations led to the house being built closer to the boundary than permitted by the approved plans. This resulted in subsequent court proceedings initiated by neighbours, which ordered the removal of the extension. The primary judge had found that the neighbours would have taken these proceedings regardless of the Council's negligence.

The central legal issues before the Court of Appeal were whether the Council owed a duty of care to the appellants concerning the distance of the house extension from the boundary, and if so, whether the appellants were entitled to damages for the loss of a chance that the neighbours' court proceedings would not have been taken had the Council not been negligent. The court also considered how damages should be assessed in hypothetical circumstances, specifically in relation to the loss incurred from the court proceedings.

The Court of Appeal, comprising Hodgson JA, Davies AJA, and Pearlman AJA, reasoned that while the Council had a duty to inspect the foundations, this duty did not extend to verifying whether the distance from the boundary conformed to the approved plans. However, the court found that the primary judge erred in not awarding damages for the loss of a chance that the neighbours would not have taken proceedings. The court determined that the appellants had lost a chance, albeit a less than even one, that the neighbours would not have pursued legal action if the Council had properly performed its duty.

Consequently, the appeal was allowed to the extent that the judgment in favour of the appellants was increased by $29,000.00 plus interest from 30 September 1998. The appeal was otherwise dismissed, and no order was made as to the costs of the appeal.