D & F Estates Ltd v Church Comrs for England

A builder or manufacturer who negligently creates a defect does not, without contract, statute or a special relationship of reliance, owe a tortious warranty of quality to a remote owner. If the defect is discovered before it causes personal injury or damage to other property, the cost of repairing or replacing the defective item is pure economic loss and is not recoverable in negligence.

A main contractor is not ordinarily liable for an independent sub-contractor’s negligence merely because it undertook to construct the whole building. Liability requires breach of the main contractor’s own duty, such as participation with actual knowledge in foreseeably dangerous work. A possible distinction between separate components of a complex structure was left open; defective plaster which harmed no other part of the building did not qualify.

D & F Estates Ltd v Church Comrs for England concerned defective plaster in a leased flat. The plastering sub-contractor had departed from the manufacturer’s instructions, causing plaster to lose its key and require replacement. The lessee claimed past and future remedial costs and lost rent, while the occupants claimed for disturbance.

The trial judge found that the main contractor, Wates Ltd, owed and breached a duty to supervise the plastering work. The Court of Appeal reversed that decision. It held principally that a main contractor which properly employed a competent sub-contractor owed no further duty concerning the sub-contractor’s execution of the work. It also treated the prospective replacement cost as irrecoverable economic loss.

The plaintiffs appealed in D & F Estates Ltd v Church Comrs for England [1989] AC 177. The appeal against the Church Commissioners had already been withdrawn. The central questions were whether the replacement cost was recoverable in negligence and whether Wates was liable for its independent sub-contractor’s negligent workmanship.

Appeal dismissed unanimously. Lord Bridge of Harwich delivered the leading speech. Lord Oliver of Aylmerton agreed and gave supplementary reasons. Lord Templeman, Lord Ackner and Lord Jauncey of Tullichettle agreed with both speeches.

1. Per Lord Bridge, the cost of replacing the defective plaster was pure economic loss. The plaster had caused no material personal injury or damage to property other than a trivial claim concerning dirtied possessions. Once its condition was discovered, any danger could be removed by taking down the loose plaster. Negligence therefore did not make the builder answerable for the cost of supplying sound plaster. Such liability would amount to a non-contractual warranty of materials, workmanship and fitness for purpose.

2. The ordinary principle in Donoghue v Stevenson [1932] AC 562 protects against physical injury to persons or property other than the defective product itself. It does not ordinarily permit a remote purchaser or owner to recover the cost of repairing a defect discovered before such injury occurs. The majority decision in Junior Books Ltd v Veitchi Co Ltd [1983] 1 AC 520 depended upon a unique relationship and established no general rule for ordinary defective-product claims. Lord Brandon’s dissenting analysis in that case was approved.

3. Anns v Merton London Borough Council [1978] AC 728 did not authorise recovery of the plaster-replacement cost. Its observations about a builder’s common-law liability for damage to the building itself were obiter. Per Lord Oliver, even if those observations supported such liability, it was confined to defects threatening health, safety or possibly other property, with damages limited to expenditure necessary to avert that danger.

4. Per Lord Bridge, an employer is generally not liable for the negligence of an independent contractor. A main building contractor does not assume a personal, non-delegable duty to the world merely by undertaking construction and employing a competent sub-contractor. Nor does its contractual interest in supervising the work create such a duty. Actual knowledge that the sub-contractor was working in a defective and foreseeably dangerous manner, coupled with condonation of that conduct, could potentially create joint liability. No such knowledge was found here.

5. Per Lord Oliver, separate components of a complex structure might in some circumstances be treated as distinct property. A defective component which damages another component could then engage ordinary negligence principles. The House did not determine the general boundary. Defective fixing of plaster which damaged only the plaster itself fell outside any such possibility.

The carefully delimited duties created by the Defective Premises Act 1972 supported the refusal to create a broader common-law warranty. Wates was not liable for its sub-contractor’s negligence and, in any event, the claimed replacement costs were irrecoverable. The Court of Appeal’s order was affirmed, with costs.

1. House of Lords: In D & F Estates Ltd v Church Comrs for England [1989] AC 177, the House unanimously dismissed the plaintiffs’ appeal and affirmed the Court of Appeal’s order. The appeal concerning the Church Commissioners had previously been withdrawn, leaving Wates Ltd as the respondent.

2. Court of Appeal: Fox and Glidewell LJJ and Sir Roualeyn Cumming-Bruce allowed Wates Ltd’s appeal and reversed the trial decision. They held principally that the proper employment of competent sub-contractors gave rise to no further duty concerning execution of the plastering work. They also held that the prospective replacement cost was irrecoverable economic loss.

3. First instance: Judge Esyr Lewis QC found that Wates Ltd owed and breached a duty to supervise the plastering work. He awarded the lessee past and prospective remedial costs and lost rent, and awarded the occupants damages for loss of amenity.