213 / 264
GAZETTE
DECEMBER 1978
SOCIETY OF YOUNG SOLICITORS SECTION
Report on a Lecture given to the Society of Young
Solicitors in Wexford, at the 1978 Autumn Seminar
DEFECTIVE BUILDINGS, LIABILITY OF
BUILDERS, SUPERVISORY AUTHORITIES AND
OTHERS IN CONTRACT AND TORT
By Nial Fennelly S.C.
This paper presented by Nial Fennelly, S.C. examined
the liability of builders' supervisory authority and
architects for defective buildings both in contract and
tort. The paper concentrated on liability in tort in the
wake of such exceptional recent English decisions as
Dutton v. Bognor Regis Urban District Council
and
Anns
v. London Borough of Merton.
The applicable maxim for Purchasers of any building is
caveat emptor. "At Common Law there is no implied
term in the contract for the sale of land that the land is. fit
for any particular purpose . . . the maxim caveat emptor
is applied rigoursly and it is for the buyer or his surveyor
to inspect the house and make up his own mind as to its
fitness" (Smith and Thomas, page 320).
However where there is an actual misdescription of the
premises by the Vendor or his Auctioneer the situation is
different. Mr. Justice Kenny in
Bank of Ireland v. Smith
spoke of the "welcome tendency" ofmodern cases "to treat
a representation as a warranty unless the person whomakes
it can show that he was innocent of fault in connection with
it". He also dealt with the argument based on the law with
regard to negligent mis-statement developed in
Hedley
Byrne v. Heller
by saying that the relationship necessary to
give rise to a duty of care in making statements must be "if
not fiduciary or arising out of a contract for
consideration . . . equivalent in contract" and that "a
contractual relationship between the Vendors' Auctioneers
and the Purchaser does not exist".
In
Esso Petroleum Co. Ltd.
v.
Mardon
it was argued
on behalf of the Plaintiff that when negotiations resulted
in a contract, the parties rights are governed by contract
not by tort but this argument was rejected by Lord
Denning and the Court.
In view of the decisions in
Esso
and
Dutton
the Courts
may not be prepared to allow Builders/Vendors to hide
behind the Caveat Emptor maxim to escape liability.
The building contractor would be liable for defective
buildings as normally under the building contract there
would be an implied warranty that the house would be fit
for the purpose for which it is built. There are often
exculsion clauses in such contracts but the doctrine of
fundamental breach would afford some protection to the
Purchaser in having the effect of such clauses diminished.
The Dutton Case in the Court of Appeal as developed
by the House of Lords in the Anns Case shows that
Builders and Supervisory Authorities are now liable in
tort for negligence in the construction of buildings. From
the cases it is now clear that a builder is liable in
negligence for defects in the building not merely in
contract to his own purchaser but also in negligence to
any subsequent purchaser. This liability would not seem
to extend to minor defects such as disrepair or decoration
which the purchaser should be able to discover from an
inspection. The limitation period only begins to run
"when the state of the building is such that there is
present an imminent danger to the health or safety or
persons occupying it"(per Lord Wilberforce in Anns Case)
i.e. when the defects first appear.
The Dutton and Anns Cases deal with liability of local
authorities for negligence in passing faulty foundations
under their bye-laws when in fact the foundations did not
comply with the authorities "bye-laws". The Problem was
— did a subsequent purchaser come within the negligence
principle of
Donoghue
v.
Stevenson.
The Court of Appeal
decided that he did. However the House of Lords in Anns
Case curtailed the scope of the actions by stating that in
order to succeed against the Local Authority it must be
shown that the powers of inspection were being exercised
in order to ensure compliance with bye-laws. Therefore
the default complained of must be a failure by the builder
to comply with the bye-laws which was not discovered by
the Local Authority inspectors.
Architects and other professionals may be liable for
negligent advice or misstatement under the principles of
Hedley Byrne v. Heller
as can be seen from the case of
Clay v. A. J. Crump & Sons Ltd.
This paper delivered earlier than anticipated is most
informative and should not be far from the elbow of
practitioners wishing to be up to date on this developing
area of the law.
REPORT OF TRIP TO BRUSSELS AND
LUXEMBOURG 1978
The Society again returned to the Continent of Europe
in an attempt to help us keep abreast of EEC
developments. Forty eight persons participated. We left
Dublin on Wednesday morning and received on
Wednesday afternoon and Thursday six lectures from
members of the Legal Service and other Directorates of
the Commission. These varied in quality and interest but
overall were thought worthwhile.
Most interesting were lectures given on the
Convention on the Enforcement of Judgments in Civil
and Commercial Matters by Paul Leleux and on the
Preparation and Presentation of a Case before the
European Courty by Richard Wainright. The former
made it clear that the Convention signed by Ireland on 27
September 1978 is already of relevance to those in
litigation practices notwithstanding that it had not yet
been ratified by Ireland. The transitional provisions of the
Convention make it clear that provided the rules of the
Convention in relation to jurisdiction are complied with at
the commencement of proceedings, it will be possible to
use the Convention to enforce judgments given after the
date of ratification in proceedings commenced prior to the
date of ratification. We understand that ratification is not
expected for about twelve months.
On Friday morning there was an innovation which
proved very successful. We had a session on practical
aspects of EEC Law with three Lawyers practising in
213