Building Contracts and the Law of Tort - Building Contract - page 455

decision of the House of Lords in D & F Estates Ltd rests upon the assumption that liability
in tort for the cost of repair of defective houses represents an unjustifiable intrusion of tort
into the contractual sphere, it is inconsistent with recent Canadian decisions recognising the
possibility of concurrent contractual and tortious duties; second, to the extent that the D & F
Estates Ltd decision formed part of a line of English cases leading ultimately to the rejection
of the Anns case, it is inconsistent with this court's continued application of the principles
established in Anns . . .
Bryan v. Maloney
HIGH COURT OF AUSTRALIA
(1995) 51 Con LR 29
The appellant/defendant (Bryan) built a house in Launceston in 1979 for Mrs Manion.
Mrs Manion in due course sold the house to a Mr and Mrs Quittenden and in 1986
Mr and Mrs Quittenden sold the house to the plaintiff/respondent, Mrs Maloney
(Maloney). Before the High Court of Australia, it was common ground that Bryan was
negligent in building the house with inadequate footings; that the damage suffered by
Mrs Maloney was the loss involved in the decrease in the value of the house resulting
from the inadequacy of the footings and that that damage was sustained by Mrs
Maloney when the inadequacy of the footings first became manifest by reason of the
cracks appearing in the walls of the house some six months after she had purchased it.
It was accepted that that damage was a foreseeable consequence of Bryan's negligence.
In these circumstances, the trial judge and the Full Court of the Supreme Court of
Tasmania held that Mrs Maloney could successfully maintain an action against Bryan,
who appealed to the High Court of Australia.
Held (Brennan J dissenting):
Foreseeability of loss flowing from the defendant's negligence was not sufficient for the
plaintiff to establish liability where the consequential loss was pure economic loss. The
builder of a permanent house could readily foresee that the house was likely to be
owned and occupied by a number of families during its lifetime and that second and
subsequent purchasers would rely on the house having been properly built, particularly
as to the matter such as foundations which they could not readily check for themselves.
So the factors of reliance and assumption of responsibility which were usually present
when courts imposed liability for pure economic loss were present and the factors
which normally pointed to rejection of such liability, such as avoidance of indefinite
and indeterminate liability and the desire to protect the legitimate pursuit of personal
advantage, were absent or weak in the circumstances of cases such as this. There was,
therefore, a sufficient degree of proximity between the builder and the subsequent
purchaser to justify holding that there was a duty of care, especially since the relevant
policy considerations pointed in favour of imposing rather than negativing liability.
Per Brennan J (dissenting). A remedy in tort for economic loss would be available
only to a plaintiff who actually incurred expense in removing dangerous defects which
posed a substantial risk of physical damage to person or property.