Murphy+v.+Brentwood

Facts: Plaintiff's home showed damage (cracks, wet spots on the lawn, etc.) due to poor work done under ABC Homes and conducted by a firm of civil engineers whose design was approved by the Brentwood District Council (under the Public Health Act). Plaintiff's insurers were not prepared to pay the entire cost of repairs, so plaintiff sold the house for L30,000 (would have been L65,000 if free of defect) to a builder who knew of the problems.

Issue: Is the council liable to the plaintiff? In other words, did the Council owe a duty of care to the plaintiff, and did it breach that duty? IS ANNS BAD LAW?

Held: No. No, no. YES, ANNS IS BAD LAW.

"I observe ... that the two-stage test has not been accepted as stating a universally applicable principle."
 * Reasoning (Lord Keith of Kinkel):**

"The jump which is here made from liability under the Donoghue v. Stevenson principle for damage to person or property caused by a latent defect in a carelessly manufactured article to liability for the cost of rectifying a defect in such an article which is ex hypothesi no longer latent is difficult to accept ...'

The loss is ECONOMIC in the case of a manufactured article taht turns out to be useless or valueles. - Annswas also a case of pure economic loss.

- The only property which was damaged was the building **itself, not "other property."**

- Two of the judges in D&F Estates had difficulty reconciling Anns with the principle in Donoghue, and were wary of extending the scope of the principle too far.

- Policy considerations include the need to avoid "overkill" in extending the scope of tort negligence too far, the fact that most of these disputes are just insurance companies fighting each other, and the fact that the effect of Anns is to impose a general liability going far beyond "that which Parliament thought fit to impose upon house builders alone by the Defective Premises Act 1972"


 * Reasoning (Lord Bri**dge of Harwich)

- Compare the case of manufactured goods that are purely made and so are worthless or maybe can be repaired at some cost to the owner: these are pure economic loss, and the situation of buildings are comparable.

- Exceptions: there might be room for finding in favour of a building owner if the building stands so close to the boundary of the owner's land and after discovery of the dangerous defect it remains a potential source of injury to neighbours or other people.

- The "complex structure" argument (that one part of a building could harm another part) is almost never credible.

- There is no need to distinguish between a public authority approving the building plans and the builders themselves. (i.e. anything said here about the builders goes for the public authority too)

- Anns is confusing when it distinguishes teh stateof a building "such that there is present or imminent danger" as the only situation in which an owner paying for repairs can recover.

- There may be "cogent reasons of social policy" for imposing liability, but "the shoulders of a public authority are only 'broad enough to bear the loss' because they are financed by the public at large. It is pre-eminently for the legislature to decide whetehr these policy reasons should be accepted as sufficient for imposing on the public the burden of providing compensation for private financial losses."


 * Ratio: There building owners cannot claim in negligence against a public authority that approved the builders' work, when the building has a defect that causes damage to the building itself. The loss is purely economic, and therefore is not covered by any duty of care here. Courts should not extend the //Donoghue// principle too far, and should defer to the legislature. In this respect, //Anns// was bad law.**