D.+&+F.+Estates+v.+Church+Commissioners

- __Wates Ltd__. Were the main contractors building a block of flats (Chelwood House) completed Oct. 1965. - __Church Commissioners__ granted a lease of flat 37 to D. & F. Estates. - __D. & F. Estates__ = a group of companies. - __Mr. and Mrs. Tillman__ control D. & F. Estates, and occupied flat 37.


 * Facts**: The plaster in the ceilings of flat 37 turned out to be defective and repairs were costly. It was really bad: even after the action was started further defective plaster was discovered, so future remedial work would be necessary. The plaster-work had been done by a firm of **sub-contractors**, R.S. Hitchens, who had failed to follow the manufacturers’ instructions. D. & F. Estates brought action for the damage (including remedial work done and the required future remedial work) and for loss of rent which would be suffered during remedial work. Mr. and Mrs. T brought action for disturbance caused to them while works were being carried out in the flat.


 * Issues**: Can one claim in negligence for the deterioration of a defectively constructed item here (specifically, the deterioration of the plaster)? Did Wates owe a duty of care to the plaintiffs?
 * Held: No and no. Wates wins (not liable for the sub-contractors' shoddy work).**

Trial judge found that Wates //ought to have known// what the manufacturers’ instructions were, and awarded damages to D. & F. and Mr. and Mrs. T. Court of Appeal reversed: Wates employed competent sub-contractors and **owed no further duty of care** to the plaintiffs in relation to that work. With respect to the //future// remedial works, the C.A. accepted the argument that Wates would not owe anything to the plaintiffs even if its own employees had done the work, because this is **pure economic loss**.
 * Judicial History**:


 * Reasoning:**
 * 2 developments of the law in relation to a builder’s liability in tort for defective premises**
 * 1. Defective Premises Act 1972**: imposes certain specific statutory duties subject to certain limitations and exceptions.
 * 2. Common law/judicial development**: the change is less certain or clear than in the case of the statutory development, and the “limits have had to be and are still being worked out”.

-**DON'T LET THE POTENTIALLY LIMITLESS COMMON LAW GET OUT OF HAND POST//-DONOGHUE;// LET THE LEGISLATURE DO ITS JOB OF DEFINING, AND //LIMITING//, RESPONSIBILITIES:**

- The cost of repairing the defective plaster itself “**was not an item of damage for which the builder** ... **could possibly be made liable in negligence** under the principle of //Donoghue// … or any legitimate development of that principle.”

-There was NO contractual relationship, and it would be unfair to impose liability here. The 1972 statutory duty had certain **limits** – it only applies to dwelling-houses and defects appearing within 6 years. **“The common law duty, if it existed, could not be so confined or so limited. I cannot help feeling that consumer protection is an area of law where legislation is much better left to the legislators.”**


 * PURE ECONOMIC LOSS vs. PHYSICAL DAMAGE: IT IS DIFFICULT TO FIND A BASIS FOR ACTION IN TORT WHERE THERE IS DETERIORATION AND POTENTIAL DANGER, BUT NO PHYSICAL DAMAGE.**

-The judge considers numerous cases that grappled with situations where buildings or products contain some kind of latent defect that causes the building or item to deteriorate, or that could be dangerous but doesn’t actually cause physical injury/damage – is it possible to recover if the defect/deterioration is discovered? Or is this just pure economic loss? It is difficult to find a basis for an action in tort in such cases.

- The question may be more complicated in the case of a “**complex structure**”: if one part causes damage to another part, is this considered damage to “other property”? In this case, the defect was //only// in the plaster. Even if the notion of damage to “other property” is plausible here, it would have been trivial (ex. damage to the decorative elements that //cover// the plaster, perhaps).


 * IN ANY EVENT, WATES THEMSELVES WERE NOT RESPONSIBLE FOR THE PLASTER WORK, AND THEIR __DUTY OF CARE__ DOES NOT REQUIRE THEM TO OVERSEE AND BE RESPONSIBLE FOR THE SUB-CONTRACTORS' WORK:**

- In general the employer of an independent contractor is not liable for the negligence/torts committed by the contractor in executing the work. There are certain “well-established exceptions” or “apparent exceptions”, but Wates does not fit into any of these categories.

- Main contractor may exercise a greater or lesser degree of supervision over the sub-contractor, and might be potentially liable if he becomes aware of the fact that the sub-contractor’s work is being done in a defective and foreseeably dangerous way. However, in this case it cannot be said that Wates //knew or ought to have known// of the defective work being done.

-New Zealand Court of Appeal in //Mount Albert Borough Council v. Johnson// stated that it is a duty to see that proper care and skill are exercised in the building of houses, and that this duty cannot be delegated. Judge here says that this is admirable **as “a matter of social policy”** BUT that as “**a matter of legal principle … I can discover no basis on which it is open to the court to embody this policy in the law without the assistance of the legislature..."**


 * RATIO (specific):** There is no legal principle on which to base the proposition that a non-delegable duty of care applies to any main contractor in the building industry who contracts to erect an entire building, and sub-contracts some of the work to third parties.


 * RATIO (general):** It is "a dangerous course for the common law to embark upon the adoption of novel policies which it sees as instruments of social justice but to which, unlike the legislature, it is unable to set carefully defined limitations."