If they do so decide, it is not difficultfor them to say so. But that principle is not apt tobring home liability towards an occupier who knows the full extentof the defect yet continues to occupy the building. The case of physicalinjury to the owner or his licensees or his or their propertypresents no difficulty. An appeal by the council to the Court of Appeal wasdismissed by that court (Fox, Ralph Gibson and Nicholls L.JJ. But he cannot, I think, havemeant that the statutory obligation to build in conformity with thebyelaws by itself gives rise to obligations in the nature oftransmissible warranties of quality. That case presentsan interesting parallel, though not a precise one, for the dangerthere was not to the plaintiffs but to their workmen. In Canada and New Zealand, however,the Anns doctrine has been both followed and further developed. My Lords, for the reasons which I endeavoured to state inthe course of my speech in D. & F. Estates Ltd. v. ChurchCommissioners for England [1989] AC 177 and which areexpounded in more felicitous terms both in the speeches of mynoble and learned friends in the instant case and in that of mynoble and learned friend, Lord Keith of Kinkel, in Department ofthe Environment v. Thomas Bates and Sons Ltd., I have found itimpossible to reconcile the liability of the builder propounded inAnns with any previously accepted principles of the tort ofnegligence and I am able to see no circumstances from whichthere can be deduced a relationship of proximity such as to renderthe builder liable in tort for pure pecuniary damage sustained by aderivative owner with whom he has no contractual or otherrelationship. My Lords, for these reasons I would allow the appeal. For the reasons which they have given, I too wouldallow this appeal. Suppose that the defect is discovered in time toprevent the injury. As I have already said, I agree with Speight J. thatthe principles laid down in Donoghue v. Stevenson [1932]A.C. 562 apply to a builder erecting a house under acontract with the owner. It is sufficient to say that a cause of actionarises at the point I have indicated.". Two of these houses, nos. But it is against injury through latent defectsthat the duty exists to guard. It is also material that Anns has the effect of imposingupon builders generally a liability going far beyond that whichParliament thought fit to impose upon house builders alone by theDefective Premises Act 1972, a statute very material to the policyof the decision but not adverted to in it. This is quite logical because inmost cases where damage or a defect which solely affects thearticle in question is discovered before it causes other damage theowner is presented with two realistic alternatives: either herepairs it or he discards it as useless. For this House in its judicial capacity to createa large new area of responsibility on local authorities in respect ofdefective buildings would in my opinion not be a proper exerciseof judicial power. 569and received its most recent reiteration in the decision of thisHouse in Leigh and Sillavan Ltd. v. Aliakmon Shipping Co. Ltd.[1986] AC 785. In both cases the real loss ispecuniary. A relationship of proximity in the sense used byLord Atkin in Donoghue v. Stevenson [1932] AC 562 must existbefore any duty of care can arise, but the scope of the duty mustdepend upon all the circumstances of the case. In myopinion they may also include damage to the dwelling houseitself; for the whole purpose of the byelaws in requiringfoundations to be of a certain standard is to preventdamage arising from weakness of the foundations which iscertain to endanger the health or safety of occupants. So,likewise, if the builder of defective foundations had been under noliability in tort, the local authority could have been under noliability for not taking reasonable care to see that he did notconstruct defective foundations. The duty of the local authority was, as Lord Wilberforcestressed in the course of his speech in Anns, at p. 758, theordinary common law duty to take reasonable care, no more andno less. as officialreferee. If the foundations are inadequate the wholehouse is affected. So his meaning may havebeen that there must be a concurrence of material physicaldamage and also present or imminent danger to the health orsafety of occupants. Iagree with it, and for the reasons which he gives I consider thatthe House should depart from its previous decision in Anns v.Merton London Borough Council [1978] AC 728 to the extentproposed by him, and that the appeal should be allowedaccordingly. The causing of economic loss does not.If it is to be categorised as wrongful it is necessary to find somefactor beyond the mere occurrence of the loss and the fact thatits occurrence could be foreseen. Where itdoes, I think, serve a useful purpose is in identifying those casesin which it is necessary to search for and find something morethan the mere reasonable foreseeability of damage which hasoccurred as providing the degree of "proximity" necessary tosupport the action. Murphy (Respondent) v.Brentwood District Council (Appellants) JUDGMENT. 768-769, Lord Salmon was at pains toemphasise that the claim had nothing to do with reliance. Richmond P., after asking the question whetherdamage to the house itself gave rise to a cause of action, appliedthe principle of Donoghue v. Stevenson to a builder erecting ahouse as follows, at p. 410: "He is under a duty of care not to create latent sources ofphysical danger to the person or property of third personswhom he ought reasonably to foresee as likely to beaffected thereby. 373. It is true that, in anuninterrupted line of cases since 1875, it has consistently beenheld that a third party cannot successfully sue in tort for theinterference with his economic expectations or advantage resultingfrom injury to the person or property of another person with whomhe has or is likely to have a contractual relationship (see Cattle v.Stockton Waterworks Co. (1875) L.R. Or replacement.. 28 transmissible warranty of quality law – pure economic loss to.! Notes © 2020, defendant local authority 153 N.Y.S New Zealand Court of Appeal inBowen v. Builders! Available to paying isurv subscribers decisions in thefield of consumer protection the housefollows, in Murphy Brentwood... 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