Proximity and the scope of special relationships, lie close to the heart of tortious principle, and although the direction taken in Anns v Merton London Borough Council was with hindsight, both unnecessary and damaging, it became important to relinquish those shackles through the examination of this case.
During the construction of a number of new homes, it was the decision of the consulting local authority to employ the services of professional and suitably qualified civil engineers, in order to ensure full compliance with the building regulations of the time.
Unfortunately, there were two properties that due to inconsistencies with the land, required very detailed and purpose-specific foundations in order to avoid subsidence or resulting damage of any kind.
The council themselves had no immediate employees instructed enough to challenge the opinions of the engineers; and so, when those same professional contractors failed to properly calculate the foundation integrity, the plans submitted were signed off without contest.
It was not until after a sale of one the two homes, that the purchaser, who after a period of growing concern, discovered there had been significant movement of the property due to a shift in the footings.
This unforeseen issue became the catalyst to a number of structural fractures, as well as utilities supply ruptures of a nature that could have proven dangerous, if not fatal, to the occupiers.
However, instead of using the home insurance proceeds to restore the property back to its correct state, the owner chose to sell the house at a grossly under market value, while issuing legal proceedings against the local authority on grounds of negligence arising from a statutory failure to prevent the faulty construction of the foundations, and thereby the overall property.
At the original trial, the judge awarded in favour of the claimant, awarding costs exceeding the value lost through the defects, with allowance for considerable outlay on furnishings and repairs while under the ownership of the original purchaser.
When the local authority appealed, it was ultimately dismissed, while the Court upheld that they had, through the course of their statutory duties, allowed the home in question to become victim to ‘physical damage,’ that by virtue of its construction, ran serious risk of causing injury and distress to those parties in occupancy at the time such an event happened.
This judgment was dependent upon the outcome of Dutton v Bognor Regis Urban District Council and in equal share, to that of Anns, which supported extension of public body liability to where private law remedy could hold them responsible beyond the reach inferred from existing statute.
Having then granted leave to appeal, the case was again presented to the House of Lords, where in many respects, the opportunity to reexamine the precedent established in Anns, could now encourage departure from the overextension of duty of care principles; particularly when relying upon Donoghue v Stevenson for relationship proximity and vicarious negligence where none existed.
After meticulously evaluating the chain of events that led to the purchaser’s claim, it became difficult to sustain that a third party to a transaction could be held against a duty of care to those suffering the results of poor construction design (as that incorporated into the overall product); which on this occasion, was the finished property.
This conflict then provoked a decision which allowed the local authority appeal and overturn the decision in Anns; a reversal that emphasised the differentiation of tortfeasor relationships, and the starkness between physical and pecuniary loss within tort law, while the court reminded the parties that:
“[A] third party cannot successfully sue in tort for the interference with his economic expectations or advantage resulting from injury to the person or property of another person with whom he has or is likely to have a contractual relationship.”