The Gazette 1986

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GAZETTE SEPTEMBER 1986
inch structural concrete slab having been
omitted - and that walls rested on inadequate
foundation. It noted that all the defects were
"hidden" in the sense that they were not
discoverable by the sort of examination which
a lay person would be expected to carry out,
but were discoverable by a reasonably careful
inspection carried out by a person with an
ordinary professional qualification in house
construction, such as those that an architect
or engineer would have obtained.
Having reviewed the trend of development
of the English cases from Bottomley -v- Ban-
nister [1932] I KB 458 through Otto -v- Bolton
and Norris [1936] 2 KB 46 to Dutton -v- Bog-
nor UDC [1972] I QB 373 and Anns -v- Mer-
ton London Borough [1978] AC 728 the
Court also considered the Irish cases of
McGowan -v- Harrison [1941] IR 231, Cham-
ber -v- Lord Mayor of Cork [1959] ILTR 45,
Siney -v- Dublin Corporation [1980] IR 400
and Colgan -v- Connolly Construction Com-
pany (High Court unreported 29th February
1980) the Court held that in Irish as in English
Law the former immunity in tort of a builder
who owns the land on which the house was
built and who subsequently sells (or lets it to a
Lessee) no longer exists and that the duty was
not affected by the fact that instead of selling
it immediately after its construction the
Vendor resided in it himself for a number of
years.
The Court noted that in Colgan's case the
Court awarded damages for defects based on
the cost of making good defects which threat-
ened the health or safety of the occupier but
not for defects in the quality of workmanship
which did not threaten health or safety. This
decision predated Junior Books -v- Veitchi
[1982] 1WLR 447 in which the House of
Lords held that the duty of care extended to a
duty to avoid causing pure economic loss
consequential on defects in the work and to
avoid defects in the work. The Court found
the reasoning of the majority in the House of
Lords persuasive.
The Court held that the Vendor was in
breach of duty in (a) causing defects which
resulted in danger to the health and safety of
the Plaintiff; (b) causing defects in workman-
ship and (c) causing defects which resulted in
inconvenience and discomfort to the Plaintiff
and his wife.
2. The Claim against the Local Authority
The Plaintiff claimed firstly that the valu-
ation carried out by the Third-Named Def-
endant on behalf of the Council was carried
out negligently and that the Council was
vicarously liable to the Plaintiff for that
negligence. As the Court was about to hold
that the Third-Named Defendant was not
negligent, that claim failed. The Plaintiff
claimed secondly that in carrying out its
statutory function the Council owed a com-
mon law duty of care to the Plaintiff which
they breached. The Plaintiff's case was that
in carrying out its statutory duty to inspect
the bungalow under the 1972 Housing Regu-
lations to ascertain its market value before
granting a loan, a duty arose which was
breached by authorising an inspection by
someone who lacked the necessary
qualifications to ascertain reasonably discov-
erable defects. Noting that the English cases
of Dorset Yacht Company Limited -v- Bognor
UDC and Anns -v- London Borough oj
Merton had decided that a common law duty
could arise on the exercise of a statutory
power the Court referred to the most recent
application of the doctrine in the House of
Lords in Governors of Peabody Donations
Fund -v- Sir Lindsay Parkinson and Others
[1984] 3WLR 953.
The Court noted that the scheme which the
Council adopted for the making of loans
under the Housing Authorities (Loan for
Acquisitional Construction Houses) Regu- .
lations 1972 provided "no advance shall be
made by the Council until the Council is
satisfied as a result of a report by the Council's
Valuer as to the actual value of an existing
house" . . . and, accordingly, an Applicant
would be entitled to assume (a) that the
Council had obtained a report from their
Valuer on the actual value and (b) that as a
result of that report the Council was satisfied
that the house was readily saleable. The
Court held that the Council was operating
their lending powers under the Act to assist
persons on low incomes to purchase their
own homes and in particular those who
would have been unable to do so but for the
Council's help. The Court also held that on
the facts known to the Council it should have
been aware that it was unlikely that the Plain-
tiff would himself employ a professional
person to examine it and should have known
that if avaluationwere carelessly done it might
not disclose defects in the premises as a result
of which the Plaintiff might suffer loss or
damage.
The Court concluded that as the purpose for
which the statutory duties were exercised was
to help persons like the Plaintiff it was con-
sistent with the Councils public law powers
that they should be accompanied by a private
law duty of care in his favour and found that
a duty of care arose in this case. The Council
also had a duty to ensure that the person who
carried out the valuation would be competent
to discover reasonably ascertainable defects
which could materially affect the market
value and were in breach of that duty by not
engaging a person with an ordinary profes-
sional qualification in relation to building
construction.
3. The Case against the Third-Named Def-
endant
The Court having assumed (but without
deciding) that the Third-Named Defendant
owed a duty of care to the Plaintiff held that
the Plaintiff failed to establish that an auctioneer
of ordinary skill and competence would have
discovered the "hidden" defects of the type
which existed in this bungalow. Thet Third-
Named Defendant was not to be blamed for
the absence of qualifications which he did not
hold himself as having.
Contributions under Section 29 of the Civil
Liability Act
The Court considered in the light of the
judgments in O'Sullivan -v- O'Dwyer [1971]
IR 275 and Carroll-v- Clare County Council
[19751 IR221 that the builder who constructs
a grossly substandard house which contains
serious hidden defects is much more blame-
worthy than a public authority whose fault
lies in the choice it made in the professional
qualifications necessary to inspect the prem-
ises and decided that the Local Authority
should recover from the builder 90^o of any
damages and costs which it might have to pay
to the Plaintiff.
Ward -v- McMaster, Louth County Council
and Nicholas Hardy & Co. Ltd. High Court
(per Costello JJ 20 April 1985 - unreported.
John F. Buckley
REVENUE
Temporary 2% levy on live Bovine Animals -
Operation unfair and oppressive - Section 79
Finance Act 1980 not applicable - Not
necessary to consider EEC Law.
In 1979, the Government introduced a tem-
porary levy of 2°7o in respect of Bovine
Animals which were slaughtered in, or exported
from, the State. The duty was payable by the
proprietor of the premises in the case of
animals slaughtered on the premises, and by
the exporter in the case of animals exported
from the State.
The Revenue Commissioners were empow-
ered to regulate the system of collecting the
duty. The Plaintiffs challenged the validity of
the duty on the grounds that it amounted to
an imposition of a Customs Duty contrary to
the provisions of the Treaty of Rome.
The issue was referred to the European
Court of Justice which ruled that in principle
the tax was not incompatible with the Treaty
but that it would be if it impeded the proper
functioning of the relevant Common Organ-
isations but that these were facts to be deter-
mined by a National Court. In the High
Court Barrington J. held the levy invalid.
On Appeal to the Supreme Court there
were three main arguments for the Plaintiff.
1. Whether the Statutory Instruments which
introduced the levy were ultra vires of the
Finance Act, 1966?
2. Even if the Statutory Instruments were
not ultra vires were they invalid because
they operated arbitrarily and unreasonably?
3. Was the levy equivalent to a Customs Duty
on Exports and therefore void from being
contrary to a Community Law?
Henchy J. held that it was only necessary to
consider Argument No. 2.
The Tax was unreasonable if not impos-
sible for the Exporter or the Proprietor of the
Slaughter House to recover the tax from the
Farmer on whom the Levy was intended as a
tax. He held that the Application of the test
of reasonableness applied in his Judgment in
Cassidy -v- Minister for Industry and Com-
merce [1978] IR 297 was applicable.
He also stated it was generally undesirable
to decide a case by invoking provisions of
Community Law when a case can be decided
by reference to domestic Law.
Section 79 of the Finance Act 1980 which
purported to remedy the defect could only act
prospectively and not retrospectively and
thus could not cure the defect of the levy.
HELD: Appeal Dismissed.
Doyle & Ors -v- An Taoiseach <£ Others. Sup-
reme Court (per Henchy J. Nem. Diss.) 29th
March, 1985 — unreported.
John O'Connor
PLANNING
Local Government (Planning and Develop-
ment) Acts 1963-1982 — Planning Appeal —
Rights of Third Parties.
The Hibernian Shirt Company &R. E.
Flanagan applied to Dublin Corporation for
planning permission for a shop/office devel-
opment at Great Strand Street and Liffey
Street, Dublin. The application was refused
by Dublin Corporation but on appeal to An
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