Woolcock Street Investments Pty Ltd v CDG Pty Ltd

Woolcock Street Investments Pty Ltd (Woolcock) brought proceedings against CDG Pty Ltd (CDG) in the High Court of Australia concerning a claim for damages arising from alleged negligent advice provided by CDG. Woolcock alleged that CDG, a consulting engineer, had provided negligent advice regarding the structural integrity of a building, leading to significant costs for remedial work.

The central legal issue before the High Court was whether CDG owed a duty of care to Woolcock in circumstances where CDG had been engaged by a third party, not directly by Woolcock, and where the alleged negligence related to advice given to that third party. Specifically, the court had to consider the principles governing the duty of care in tort, particularly in the context of professional negligence and the potential for liability to third parties who suffer economic loss.

The High Court, in a majority decision, held that CDG did not owe a duty of care to Woolcock. The majority reasoned that the established principles for establishing a duty of care in cases of pure economic loss, particularly in the context of professional advice, required a sufficient degree of proximity between the parties. In this instance, the relationship between Woolcock and CDG was not sufficiently proximate, as CDG's retainer was with a third party, and there was no evidence that CDG knew or ought to have known that its advice would be relied upon by Woolcock, nor that Woolcock would suffer economic loss if the advice was negligent. The court affirmed that a mere possibility of economic loss to a third party is insufficient to establish a duty of care.

The High Court dismissed Woolcock's appeal.