Hamlin v. Invercargill (City), (1996) 194 N.R. 16 (PC)

• Case Date: February 12, 1996
• Jurisdiction: Canada (Federal)
• Citations: (1996), 194 N.R. 16 (PC)

Hamlin v. Invercargill (1996), 194 N.R. 16 (PC)

MLB headnote and full text

Invercargill City Council (appellants) v. Noel Gordon Hamlin (respondent)

(Privy Council Appeal No. 36 of 1995)

Indexed As: Hamlin v. Invercargill (City)

Judicial Committee of the Privy Council

London, England

Lord Keith of Kinkel, Lord Browne-Wilkinson,

Lord Mustill, Lord Lloyd of Berwick and

Sir Michael Hardie Boys

February 12, 1996.

Summary:

Seventeen years after a house was built, another builder informed the owner that the foundation was defective. The owner sued the builder for breach of contract. The owner also sued the city council in tort on the ground that the city's building inspector was negligent in carrying out the inspections.

The trial court found the builder liable in contract and the city liable in tort. However, the builder was no longer in business. The city appealed.

The Court of Appeal of New Zealand dismissed the appeal. The city appealed.

The Judicial Committee of the Privy Council dismissed the appeal.

Courts - Topic 102

Stare decisis, authority of judicial decisions - English, American and foreign author­ities - English decisions - [See Damages - Topic 531 ].

Damages - Topic 531

Limits of compensatory damages - Re­moteness - Torts - Recoverable damages - Purely economic loss - Seventeen years after the construction of his house, the owner was informed that the foundation was defective - The owner sued the city council on the ground its building inspec­tor had been negligent - For 15 years New Zealand's courts had followed the law of England and held inspectors liable for economic loss caused by negligence - However, on appeal, the city submitted that liability should be denied on the basis of the recent change in England's law affected by the decision of the House of Lords in Murphy v. Brent­wood District Council - The New Zealand Court of Appeal declined to fol­low Murphy on the ground that conditions in New Zealand were different - The city appealed - The Judicial Committee of the Privy Council dismissed the appeal - See paragraphs 1 to 35.

Land Regulation - Topic 3424

Land use control - Building inspectors - Negligence - [See Damages - Topic 531 ].

Limitation of Actions - Topic 15

General principles - Discoverability rule - Application of - [See Limitation of Actions - Topic 3010 ].

Limitation of Actions - Topic 3010

Actions in tort - General principles - When time begins to run - Latent defects in buildings - In 1972, a city's building inspector approved a house foundation - In 1974, cracks appeared in the masonry veneer and on one wall of the kitchen - In the early 1980's there were cracks in the foundation wall - In 1989, another builder told the owner that the foundation was defective - The owner sued the city in 1990 for the inspector's negligence - The issue arose as to whether the limitation period had expired - The Judi­cial Com­mittee of the Privy Council stated that "the cause of action accrues when the cracks become so bad, or the defects so obvious, that any reasonable homeowner would call in an expert. Since the defects would then be obvious to a potential buyer, or his expert, that marks the moment when the market value of the building is depreciated, and therefore the moment when the eco­nomic loss occurs" - See paragraph 50.

Municipal Law - Topic 1814

Liability of municipalities - Negligence - Enforcement of bylaw - [See Damages - Topic 531 ].

Torts - Topic 9157.1

Duty of care - Claims against public officials or authorities - Building inspec­tors - [See Damages - Topic 531 ].

Cases Noticed:

D. & F. Estates Ltd. et al. v. Church Commis­sioners for England et al., [1989] A.C. 177; 94 N.R. 286 (H.L.), consd. [para. 4].

Murphy v. Brentwood District Council, [1991] 1 A.C. 398; 113 N.R. 81 (H.L.), not folld. [para. 4].

Pirelli General Cable Works Ltd. v. Faber (Oscar) and Partners, [1983] 2 A.C. 1 (H.L.), not folld. [para. 5].

Bowen v. Paramount Builders (Hamilton) Ltd., [1975] 2 N.Z.L.R. 546, revd., [1977] 1 N.Z.L.R. 394 (C.A.), consd. [para. 7].

Dutton v. Bognor Regis Urban District Council, [1972] 1 Q.B. 373 (C.A.), consd. [para. 7].

Mount Albert Borough Council v. Johnson, [1979] 2 N.Z.L.R. 234 (C.A.), consd. [para. 8].

Anns v. Merton London Borough Council, [1978] A.C. 728; [1977] 2 W.L.R. 1024; [1977] 2 All E.R. 492 (H.L.), folld. [para. 8].

Mount Albert City Council v. New Zea­land Municipalities Co-operative Insur­ance Co., [1983] N.Z.L.R. 190, consd. [para. 10].

Brown v. Heathcote County Council, [1986] 1 N.Z.L.R. 76 (C.A.), affd. [1987] 1 N.Z.L.R. 720 (P.C.), consd. [paras. 11, 15].

Stieller v. Porirua City Council, [1986] 1 N.Z.L.R. 84 (C.A.), refd to. [para. 11].

Craig v. East Coast Bays City Council, [1986] 1 N.Z.L.R. 99, refd to. [para. 11].

Williams v. Mount Eden Borough Council, [1986] 1 N.Z.B.L.C. 102,544, consd. [para. 11].

White et al. v. Jones et al., [1995] 2 A.C. 207; 179 N.R. 197 (H.L.), refd to. [para. 11].

Henderson et al. v. Merrett Syndicates Ltd. et al. - see Arbuthnott et al. v. Fagan and Feltrim Underwriting Agencies Ltd. et al.

Arbuthnott et al. v. Fagan and Feltrim Un­derwriting Agencies Ltd. et al., [1995] 2 A.C. 145; 173 N.R. 173 (H.L.), refd to. [para. 11].

Dennis v. Charnwood Borough Council, [1983] Q.B. 409 (C.A.), consd. [para. 14].

Peabody Donation Fund Governors v. Parkinson (Sir Lindsay) & Co., [1985] A.C. 210 (H.L.), refd to. [para. 14].

Hedley Byrne & Co. v. Heller & Partners Ltd., [1964] A.C. 465 (H.L.), refd to. [para. 15].

Batty v. Metropolitan Property Realisations Ltd., [1978] Q.B. 554 (C.A.), refd to. [para. 16].

Chase v. de Groot, [1994] 1 N.Z.L.R. 613, consd. [para. 17].

South Pacific Manufacturing Co. v. New Zealand Security Consultants and Inves-t­igations Ltd., [1992] 2 N.Z.L.R. 282, consd. [para. 17].

Donoghue v. Stevenson, [1932] A.C. 562; [1932] All E.R. Rep. 1 (H.L.), refd to. [para. 20].

Hart v. O'Connor, [1985] A.C. 1000 (P.C.), refd to. [para. 24].

Tai Hing Cotton Mill Ltd. v. Liu Chong Hing Bank Ltd., [1986] A.C. 80 (P.C.), refd to. [para. 24].

Cassell and Co. v. Broome, [1972] A.C. 1027 (H.L.), consd. [para. 25].

Nielsen v. Kamloops (City) and Hughes, [1984] 2 S.C.R. 2; 54 N.R. 1; [1984] 5 W.W.R. 1; 10 D.L.R.(4th) 641; 29 C.C.L.T. 97; 8 C.L.R. 1, consd. [para. 27].

Canadian National Railway Co. et al. v. Norsk Pacific Steamship Co. and Tug Jervis Crown et al. (1992), 137 N.R. 241; 91 D.L.R.(4th) 289 (S.C.C.), consd. [para. 27].

Winnipeg Condominium Corp. No. 36 v. Bird Construction Co. et al. (1995), 176 N.R. 321; 100 Man.R.(2d) 241; 91 W.A.C. 241; 121 D.L.R.(4th) 193 (S.C.C.), refd to. [para. 27].

Council of the Shire of Sutherland v. Hey­man and Another (1985), 157 C.L.R. 424 (Aust. H.C.), not folld. [para. 28].

Bryan v. Maloney (1995), 69 A.L.J.R. 375 (Aust. H.C.), consd. [para. 28].

Australian Consolidated Press Ltd. v. Uren (Thomas), [1969] 1 A.C. 590 (P.C.), refd to. [para. 29].

Askin v. Knox, [1989] 1 N.Z.L.R. 248, consd. [para. 40].

Cartledge v. Jopling (E.) and Sons Ltd., [1963] A.C. 758; [1963] 1 All E.R. 341 (H.L.), consd. [para. 41].

Bagot v. Stevens Scanlan and Co., [1966] 1 Q.B. 197, consd. [para. 45].

Sparham-Souter v. Town and Country Developments (Essex) Ltd., [1976] Q.B. 858 (C.A.), folld. [para. 46].

Ketteman et al. v. Hansel Properties Ltd. et al., [1987] A.C. 189; 72 N.R. 321 (H.L.), refd to. [para. 48].

Ruxley Electronics and Construction Ltd. v. Forsyth, [1995] 3 W.L.R. 118; 185 N.R. 241 (H.L.), refd to. [para. 50].

Statutes Noticed:

Building Act, 1991 (N.Z.), sect. 90, sect. 91 [para. 33].

Authors and Works Noticed:

Cooke, Report of the Commission of Inquiry into Housing - see New Zealand, Report of the Commission of Inquiry into Housing (1971)(Cooke Report).

Jones, Michael A., Defective Premises and Subsequent Purchases - A Com­ment, 100 L.Q.R. 413, generally [para. 48].

New Zealand, Report of the Commission of Inquiry into Housing (1971)(Cooke Report), gen­erally [para. 21].

New Zealand, Review of Building Con­trols (1983), generally [para. 33].

Todd, Stephen, Latent Defects in Property and the Limitation Act: A Defence of the "Discoverability" Test, 10 New Zealand Univ. L. Rev., p. 316 [para. 48].

Todd, Stephen, The Law of Torts in New Zealand, p. 912 [para. 48].

Wallace, I.N. Duncan, Negligence and Defective Buildings: Confusion Con­founded?, 105 L.Q.R. 46, generally [para. 48].

Counsel:

Miss Bates, for the appellant;

Miss French, for the respondent.

Agents:

Not disclosed.

This appeal was heard at London, England, before Lord Keith of Kinkel, Lord Browne-Wilkinson, Lord Mustill, Lord Lloyd of Berwick and Sir Michael Hardie Boys of the Judicial Committee of the Privy Council.

On February 12, 1996, Lord Lloyd of Berwick delivered the following judgment for the Privy Council.