Murphy v Brentwood DC [1990]

Defendant local authority approved plans to build new
houses on certain site, following consulting engineers’ report.
Engineers made mistake and cracks appeared in houses.
Plaintiff, owner of one of houses, had to sell house
for below market price as result.
House of Lords unanimously overruled Anns in so far as it imposed a duty on
local authorities.
Where defect in building was discovered before any
personal injury or damage to property (other than defective house itself) had
been done, expense incurred by building owner in rectifying defect (or in
vacating premises) was pure economic loss and therefore irrecoverable in tort.
ie Once dangerous defect discovered, merely
constitutes defect in quality, and to permit recovery in tort would be to
introduce transmissible warrant of quality in absence of any contract.
Lord Keith – Anns
could be understood on an ‘assumption of responsibility’ basis.
Sub-contractors were chosen by pursuers, therefore ‘uniquely proximate’ relationship.
Lord Bridge supported principle above but added
qualification that if building is so close to neighbouring property that it
presents risk to neighbours, building owner should be able to recover in tort
cost of obviating danger.
Lord Bridge also drew distinction between an integral
part of structure which does not perform its function of sustaining the other particles,
and distinct item incorporated in structure which malfunctions and causes
positive damage to structure, eg exploding central heating boiler.
In latter case, damages might be recoverable under Donoghue v Stevenson principles.