Hodge, Marcus J A --- "Constructing a Liability: Bryan v Maloney" [2000] MurdochUeJlLaw 2; (2000) 7(1) Murdoch University Electronic Journal of Law

"Mr. Tapp submitted that the liability of the Council would, in any case, be limited to those who suffered bodily harm: and did not extend to those who only suffered economic loss. He suggested, therefore, that although the Council might be liable if the ceiling fell down and injured a visitor they would not be liable simply because the house was diminished in value. I cannot accept this submission. The damage done here was not solely economic loss. It was physical damage to the house."[15]

As a general rule, Australian courts will not accept an action in tort for damages that are purely economic. This has, however, been subject to a growing number of exceptions over the years. Liability for negligent misstatement causing economic loss emerged as the first exception, followed closely by the decision in Caltex providing support to economic loss cases where sufficient proximity was found[16] In Bryan, Mrs Maloney's loss was classified as purely economic. This classification is significant in that it determines how a duty is to be further determined. It is the first hurdle in recognition of a duty of care. Such was the case in Bryan v Maloney.

The categorisation of damage has a significant effect on the parties. It determines prima facie whether a loss is recoverable in any given circumstance. Despite the above comments, the High Court continues to place a pivotal function on the distinction between physical and economic loss. The following is a discussion of the ultimately 'impossible distinction' between these types of damages.

The Bryan Classification

The High Court in Bryan did not actively consider how the losses should be classified. Once the case was appealed before the High Court, inferior courts had before concluded that damage was purely economic. Thus, counsel was agreed on this point and the Court did not see a need to question it.

"In these circumstances, to describe the respondent as having suffered pure economic loss is debatable. However, the respondent did not seek to argue against the classification and the Court was asked to dispose of the appeal on the footing that it was pure economic loss which she [Mrs Maloney] had sustained."[17]

"In the result, the sole remaining issue is whether Mr Bryan owed Mrs Maloney, as a subsequent purchaser of the house, a relevant duty of care under the law of negligence."[18]

Having chosen this basis for proceeding, we see the effect as two-fold. First, the court gives no guidance as to loss classification in future cases. The second issue, and by far most significant, is the prospect that the High Court considered the categorisation had no particular significance. On the contrary, if the Bryan loss had not been classified as economic, the case would have been dismissed as a mere defect in quality[19]

This realisation provides a thorough explanation of the Bryan classification. The ordinary law of negligence does not permit a claim of damages arising from a mere lack of quality in a building. This is a matter of policy, which wards against a flood of suits against builders and manufacturers alike who simply supply a lesser quality and presumably cheaper product. The court is mindful that a consumer 'gets what they pay for'. Thus, if a defect is to be actionable it must be either physical, or purely economic to avoid this policy restriction. For Mrs Maloney, her loss may have been pleaded as physical damage. But this carried the risk that a court would only allow repair of the footings and not the further damage caused by the failure. There was also a significant risk that the courts would deny a duty altogether under a traditional analysis of 'remoteness'[20]

It is submitted that the High Court made a decision to hear the case and made it possible by ignoring or dismissing the difficulties of loss-classification[21] It may also be argued that the pure economic loss distinction in this scenario makes no sense at all, hence a tactful avoidance of the issue. Reference is made to the majority judgement:

"Here, the distinction is between ordinary physical damage to a house by some external cause and mere economic loss in the form of diminution in value of a house... Obviously, that distinction, is an essentially technical one. Indeed, even now, it is arguably inapplicable."[22]

The Court remained wholly unconvinced by its own classification. Even though the distinction was deemed inapplicable, the majority continued to use the concept to explain their findings. The confusion surrounding this aspect of the case makes it difficult to determine the precise effect the classification had.

There are several possibilities in understanding the difficulties of Bryan. The first position, as will be argued, is that the classification of loss for purposes of applying alternate duty tests is counter-productive and lacks probative logic. Second, it is possible that the classification is useful generally, but has been applied incorrectly in this case. Finally, the categorisation of damage may facilitate the useful distinction of two necessarily separate areas of negligence. Each has its merits and are defendable positions in theory. As we will see, the first proposition will be argued to bear the weight of approval of a number of other jurisdictions. This proposition would also have the support of the current Chief Justice of the High Court and certainly of Lord Denning who in Dutton, with respect, expressed the more correct view.

Conceptual Basis

A suitable place to begin is an extract from the judgement of Brennan J in the Bryan Case:

"...the relevant property for the purpose of the wider principle on which the decision in Donoghue v Stevenson was based, was property other than the very property which gave rise to the danger of physical damage concerned."[23] A pure economic classification is triggered, among other ways, when a product 'injures itself'. This legal fiction embodies a policy not to compensate for mere quality defects. 'Self injury' is simply when the property fails due to its inherent nature, not because of how it has been affected by external forces.

The courts view a latent defect in a building as 'self destruction' because the object has failed because of, and within, itself[24]

Several alternatives to this view of loss-classification are currently utilised in other jurisdictions. One such theory, the 'Complex Structure' approach, is widely acknowledged in German courts. It recognises that complex objects are not best understood as one object, but as systems of structure that interact while remaining ostensibly separate. This type of understanding is necessary in dealing with the disparities that occur when considering very different objects (ie. a glass bottle and a house). In this instance however, it seems the High Court was impatient to come to a conclusion:

"It is therefore unnecessary to discuss the "complex structure" theory enunciated by Lord Bridge in D and F Estates Ltd v Church Commissioners... In the end the question is one of recoverability in particular circumstances, rather than the allocation of the circumstances to a particular classification."[25] Yet as is understood, the damage classification dictates the subsequent duty testing and has become determinative of liability in many cases[26]

As such, it is imperative that every care is taken in this initial categorisation stage - care that, with respect, was not taken in this case.

A major issue raised by the damage classification debate is that of appropriate policy and community expectation. Lord Denning continues on the theme as presented earlier:

"If Mr. Tapp's submission were right, it would mean that if the inspector negligently passes the house as properly built and it collapses and injures a person, the council are liable: but if the owner discovers the defect in time to repair it - and he does repair it - the council are not liable. That is an impossible distinction. They are liable in either case."[27]

If the Bryan Court was to have found along the lines of English and Canadian decisions, there would be potential to generate a negative public perception of the correct way to deal with defective structures. Both of these jurisdictions currently find that only damage posing 'imminent danger to health or safety' is actionable. For further discussion, refer to '4. Alternate Theory'.

As to the pure economic loss classification itself, we need only look to the difficulty Halisbury's Laws has in explaining the theory:

"In a building project, physical injury occurs where a person suffers actual injury and physical damage occurs where the building itself suffers actual damage... Pure economic loss, on the other hand, occurs where the loss is suffered by the owner when the building itself, although undamaged, requires rectification or is less valuable by reason of some defect." [28]

How is it possible, on the above understanding, for a building to remain undamaged when the foundations have failed and caused $34,000 worth of 'damage' to the structure and surrounds? If we know mere quality defects are not actionable, how is it that rectification is required where the building had remained 'undamaged'? If it is possible to explain the concepts in a way that follows any rigorous and testable logic, how is it that the courts have failed in recent times to convince even themselves? Perhaps the classification has one redeeming feature:

"...the categorisation of damage as economic serves at least the useful purpose: of indicating that something more is required..."[29]

Because the law in Australia has not yet formulated a negligence calculus that can be applied to all situations, it is convenient to limit liability prima facie to those having suffered physical loss. If a situation is considered 'special', as discussed previously, the court can deal with it in isolation. By employing a technique of categorisation, the court may dismiss claims simply and effectively, but as seen in Bryan this approach can prove inadequate.

Superficially, the 'pure' or 'mere' economic loss classification serves the purpose of limiting the liability of people like Mr Bryan. The classification does, however, lead to confusion as to which losses should be recoverable, as opposed to those that occur one step removed from the physical damage. The High Court continues to make use of the distinction, but hope exists that its effect will be gradually limited to a convenient starting point rather than a determining feature.

Proximity

In moving to a discussion of proximity, it is convenient to explain that purely economic loss by its nature has the potential to occur in a wide class of individuals. This is true because the failure of one individual may effect a large class of individuals who rely on his or her performance (consider the results of the not-so-recent gas-crisis in Victoria [30]).

Yet as we know, not all loss suffered will generate a liability for another - the very nature of business advantage would otherwise give rise to a plaint. In action for physical injury or damage, the 'reasonable foreseeability' test is adequate to limit the sphere of liability. The injury itself is evidence of the consideration the defendant should have had for the plaintiff. However, in cases of economic loss, the courts have insisted on a greater proof of causal connection between the defendant and plaintiff. Thus, when damage is found to be purely economic, as in the Bryan Case, there is a second hurdle of 'proximity' that aims to limit the defendant's liability. As such, the twin concepts of economic loss and proximity flow one from the other as a function of the prevailing logic of a duty calculus.

'Proximity' was the single most significant factor in finding a liability for Mr Bryan. The concept refers to the relationship between a tortfeasor and plaintiff that brings the two sufficiently 'close' or 'proximate' for a duty to exist. The High Court has consistently presented the proximity concept as a key determinant of the existence of a duty of care. It is submitted that, contrary to popular opinion, proximity has been used euphemistically - masking decisions made by imposing completely independent criteria. Justice Brennan, who in Bryan rejected the popular concept, stated that:

"the requirement of proximity has worn the appearance of a criterion of liability, rather than as the terminological description covering different working criteria of liability."[31]

This discussion seeks to establish that, where proximity was once a convenient explanatory tool, it has now developed into a test in its own right. While better tests are often desired, this approach seems particularly lacking in requisite form and substance. The Bryan development in the use of this method warrants a close scrutiny of this area, and has been the subject of much criticism from academic and judicial commentators. It will be shown how proximity has reached a point that is no longer conducive to the ordered development of the law in Australia. In the light of the court's decision in Bryan v Maloney, the future of the proximity concept as a test for tortious liability is in doubt.

The following is an examination of the High Court's approach and, in the context of pure economic loss, evaluates the proximity concept as the test of a duty of care.

Proximity Theory

It is not difficult to come to terms with the very real concerns held by the courts. Steven J concisely expressed the problem in the landmark case of pure economic loss - Caltex Oil [32] :

"[I]f economic loss is to be compensated, its inherent capacity to manifest itself at several removes from the direct detriment inflicted by the defendant's carelessness makes reasonable foreseeability an inadequate control mechanism."[33]

Due to the lack of an adequate control mechanism, Deane J (and others [34] ) returned to the beginnings of negligence theory to discover a workable solution. The House of Lords, however, continues to use a more established approach in duty issues. An understanding of the House of Lords' approach helps to appreciate the High Court's marked departure from it.

The House of Lords, since the findings of Hedley Byrne & Co Ltd v Heller & Partners Ltd [35] , has made it clear that in England at least the principles of Donoghue [36] have no place in the determination of recovery for economic loss. Since 1990, with its decision in Caparo Industries Plc v Dickman [37] , the House has solidified its preference for a categorisation of damage-type in forming two distinct limbs of negligence law. These have been previously discussed and represent the traditional distinction between actual physical damage and pure economic loss. To the first category, the House of Lords apply the 'neighbour' principles of Donoghue. To the second is applied the Hedley Byrne doctrine, limiting recovery to only negligent misstatement and misrepresentation.

The High Court, on the other hand, has sought to bring the separate categories of liability together under one unified concept of a duty of care. The formal rationalisation of two disparate limbs of negligence was complete in Dean's J judgment of Jaensch v Coffey [38] in 1984. In this case, other members of the court utilised his approach, giving conclusive weight to the requirement and establishing proximity as the orthodox approach to negligence liability in Australia.

Subsequent cases have tested this reasoning. Deane J, in Sutherland Shire Council v Heyman [39] determined to further control the application of a duty by establishing proximity as the only determinative factor in cases of economic loss.

It is evident that, even after cases such as Jaensch and Sutherland, the use of the proximity requirement had no significant bearing, and produced no consistently differing results to findings generated without applying the test.[40] Proximity was therefore viewed as relatively harmless (although superfluous) by its opponents. Bryan v Maloney saw the first critical expansion of the concept, leading to an obvious discrepancy in the desired direction for liability law.

The Substance of Proximity

The majority in Bryan would have us believe that proximity is complete within itself as a test of duty. Even though it has been said the concept is governed more by policy than anything else, it is generally unacceptable to explain all decisions as 'policy' driven. Thus, it was convenient for the court to look to other apparently less arbitrary models such as proximity. Since Bryan, the court has retreated somewhat from their unsustainable position and has begun to consider the basis for their 'amorphous notion' of proximity.

Hill v Van Erp [41] (March 1997) gave the High Court its most recent significant opportunity to clarify its use of the proximity concept. Four of six judges involved used proximity in determining a duty of care in the negligence claim. Chief Justice Brennan, joined by McHugh J, did not use the concept to arrive at their decisions. Both men are deeply skeptical regarding the usefulness of proximity in an ordinary duty inquiry, let alone in a novel case. The four justices who applied the proximity test did so in the most passive form witnessed in the High Court to date. Now we find that Dawson J, for example, admits that proximity:

"expresses the result of a process of reasoning rather than the process itself" [42] .

Interestingly, all members who applied proximity found in favor of a duty owed, as did Brennan CJ who rejects the use of the concept. McHugh J was the only dissenter in the court and he too utilised duty tests other than proximity. Deane J was found to return almost to the position he expressed in Heyman - before proximity was held to be the sole determinant:

"...recognition of the requirement of proximity neither precludes nor dispenses with the need... for particular rules or tests for determining whether the requirement is satisfied in the circumstances of a particular category of case."[43]

Since Hill, it seems appropriate to view the concept of proximity as:

"expressing the proposition that in the law of negligence reasonable foreseeability of harm may not be enough to establish a duty of care. Something more is required and it is described as proximity" [44] .

It was with Dawson's J suggestions [45] on proximity use that we come closest to elucidating its substance. First, he believes, the court should look to issues of general policy to decide whether finding a liability should be avoided. Policy concerns include indeterminate liability, impeding commercial activity, and the undermining of existing remedies available in other areas of law. Essentially, the first question for the court is 'why not find liability?'

Secondly, Dawson J explains that the court will look to similar examples of liability to find any useful correlation. In Hill, this produced a comparison of the solicitor's liability to that found in Hawkins v Clayton [46] . Here the court ruled a solicitor owes a duty to take reasonable steps in locating and notifying the executor of a will in his charge. It was surmised that the executor 'relies' on the solicitor to advise of the situation, and that there is an 'assumption of responsibility' to so advise when the solicitor takes on a client.

Evidently, this explanation goes only part of the way toward unearthing the constituents of proximity. Others in Hill identified further duty requirements. These were expressed as either an 'assumption of responsibility', or sufficient 'control'. These are evidenced in the judgement of Gaudron J where she adds the possibility of 'implied reliance' as used in Bryan [47] . Reliance imputes a fiduciary duty in a similar manner to assumption of responsibility. Both terms point to a situation where the individual who suffered loss was necessarily dependent on the tortfeasor to a sufficient and greater extent than the majority of the public. Control takes the reciprocal view. It determines a duty where the tortfeasor had opportunity and a further requirement to control the situation in order to prevent damage to particular individuals. Yet these three features of a duty have fluctuated in popularity over the last fifty years or more [48] . They actually take proximity closer to a traditional negligence calculus, akin to reasonable foreseeability. Regardless, these are the steps the majority has taken to give a greater substance to proximity and provide a basis for development.

If it is possible for the proximity test to be broken into its constituent parts and these parts actually give substance and usability to the test, why was it not done until Hill? These issues follow.

Observations on Proximity

A concept such as proximity lends itself very well to providing an appearance of considered methodology, while largely avoiding establishing useable precedent. It has been said [49] that the somewhat 'amorphous notion' of proximity gives the court opportunity to practice a form of 'judicial legislation'. This is achieved without appearing to create new principles, or straining existing principles to an incredible extent [50] . However, the appeal of the concept to the Bryan court was likely more than a desire to push the 'separation of powers' doctrine.

A second observation regards the use of alternate tests of 'reliance' and 'assumption of responsibility'. In Bryan the court was wary not to limit their judgment to the highly criticised area of proximity, nor to the vagueness of policy. The court identified the importance of an assumption of responsibility by the builder and an implication of reliance by the purchaser.

In actual fact, no reliance or assumption of responsibility was argued. As the court was prepared to infer these, they became non-issues - once again pointing to the structure as the only true proximate link [51] .

Justice Brennan concluded that the proximity test could proceed either incrementally or definitively. Chief Justice Brennan continues to prefer the definitive approach in that it provides immediate certainty and a full disclosure of the process of reasoning invoked by proximity [52] . Others, namely the majority in Bryan, preferred an incremental approach.

Allowing this type of gradual refinement follows the same pattern of development as in any common law area. As situations arise and decisions are made, the law will ideally form an appropriate view. This very optimistic approach does have its difficulties here. For our purpose, no basis on which to even begin this process has been provided. We need only look to the situations in Sved [53] and Zumpano [54] to realise that the High Court has essentially overruled the trial judge on a perceived error of fact - not an erroneous application of the High Court model. It is difficult to see how the law will develop appropriately in the lesser courts if the High Court continues to overrule well considered application of their own precedent. A combination of a lack of working criteria and the absence of significant post-Bryan case law makes an incremental development in this area an unwieldy proposition.

The High Court has voiced strong objections to the House of Lords' approach in economic loss situations. As we have seen, the House of Lords takes a more conservative view on liability in this area. It is interesting to note, however, that for all the objections to the UK philosophy, the Australian proximity requirement directly reflects the UK Hedley Byrne criteria, even if only as policy driven ideals [55] .

It seems there are two possibilities for an understanding of proximity. First, proximity could represent an elaborate and as yet unfathomed process of reasoning - with 'responsibility', 'reliance' and 'control' having only scratched the surface. Secondly, proximity could be seen as completely interchangeable with policy - the High Court slowly building precedent by personally deciding each new case on its merits. It is likely that we will find a combination of the two, but without further examples of application it is not possible to make a better assessment.

We see in cases since Bryan, the proximity requirement has been quickly disposed of - even assumed - and the focus then brought to the salient issues of reliance, responsibility and control. These are by far the better measures of that which policy has sought to achieve and draws closer to the Brennan CJ ideals. It promotes a clear articulation of the reasoning process - a process that at present is obscured by a veil of proximity.

Alternate Theory

In the light of foregoing argument, the current approach to a duty calculus is less than satisfactory. It fails to provide a practical, working model of a duty calculus that can be used in cases of economic loss. In this context, Professor Fleming wrote:

"[It] became a convenient excuse for not disclosing any specific reasons behind a decision for or against a finding of 'duty'. This pervasive failure to give reasons, rather than postulating unsubstantiated conclusions, has its roots in the embarrassment with which British conservative tradition has generally treated the role of policy in judicial decision making" [56] .

The current approach of the Australian High Court is justified by and rooted in 'policy'. Neither policy nor the current approach can be empirically justified. The question now arises, why do we not have a law that is repeatable, predictable and "capable of application in lawyers offices" [57] ?

The following discussion focuses on a body of academic work and case law which explores the alternatives that may begin to replace the current view of negligence liability.

Kirby Proximity

Justice Kirby, in the recent High Court judgements of Pyrenees Shire Council v Day [58] and Romeo v Conservation Commission of the NT [59] recommended and utilised an approach to the duty calculus that may be the first step toward certainty. It was said best when he stated: "[P]roximity's rain in this Court, at least as a universal identifier of the existence of a duty of care, has come to an end" .[60]

Rather than do away with proximity altogether, Kirby J has limited its role to a level more in line with the fundamentals of Lord Atkin's findings in the first modern negligence case [61] .

The comments of Kirby J echo to an extent the minority judgement of Brennan CJ in Bryan. Kirby J went on to explain:

"Whatever the defects of the notions of foreseeability, proximity and the imprecision of the policy evaluation inherent in measurement of fairness, justice and reasonableness, some guidance must be given by the court as to how the duty question is to be answered when it is contested in a particular case. Otherwise, confronted with a suggested new category [of liability], lawyers in their offices and courts in Australia would have no instruction for their task of reasoning by analogy from past categories."[62]

According to this view, proximity remains useful only in that it describes what Lord Atkin intended in using 'neighbourhood' as part of his test for negligence. Proximity is consequently used in both a broad and narrow sense. The narrow references only the Lord Atkin measures of physical, circumstantial and causal nearness. The broad view encompasses these issues and in addition overlays issues of policy that may be used to create or deny a liability in any given circumstance [63] . It is the latter use of the term that has lead to the current uncertainty and has been done away with by at least Kirby J at this point.

The test promoted by Kirby J comes from the House of Lords decision in Caparo Industries plc v Dickman [64] . The test asks three questions:

1. Was it reasonably foreseeable to the alleged wrongdoer that particular conduct or an omission on its part would be likely to cause harm to the person who has suffered damage or a person in the same position?

2. Does there exist between the alleged wrongdoers and such a person a relationship characterised by the law as one of 'proximity' or 'neighbourhood'?

3. If so, is it fair, just and reasonable that the law should impose a duty of a given scope upon the alleged wrongdoer for the benefit of such a person.[65]

The key element in the test is the separation of policy from any measure of proximity, in the Lord Atkin sense of 'neighbourhood'. This allows the third point to measure any other factors that might effect a finding of liability. It is available to account for aspects of fairness, justice and reasonableness with which policy is concerned.

Similarly, policy is not bound by the constraints of proximity and is free to account for issues considered important in deciding a novel case.

"[P]olicy considerations which [were] legitimately taken into account in determining whether sufficient proximity exists in a novel category will be influenced by the court's assessment of community standards and demands." [66]

This may also be used to produce a less rigid approach by the courts, leading to possible new categories of liability. If policy is seen to be indistinct from the calculus, "[i]t would then be all too easy to declare that those categories are closed..."[67]

While not in the nature of a rigid formula, the Kirby approach does pave the way for a more precise outcome in novel cases. It gives identifiable meaning to the requirement of proximity and separates these issues from the relatively amorphous final stage of public policy. If nothing else, there is a level of honesty and accessibility in this approach that does not exist in the current formulation.

'Proximate Object' or the 'Significant Investment' Theory

Before Bryan, proximity could exist only in a physical, causal or circumstantial form. It will be argued that the majority judgement has effectively added a fourth proximity-type - proximity generated through the object itself.

Once it was decided that the loss in Bryan was solely economic in nature, it was incumbent on those members who ascribe to proximity to apply it strictly [68] . This follows naturally from the conclusive weight given by them to this concept [69] . The fact that a personal dwelling was damaged is by far the most significant, and perhaps sole determinant in the finding of sufficient proximity. The court made it very clear that the purchase of a home was the single largest investment an individual was likely to make, and represents one of the greatest securities our society has to offer. It was at this point that the majority made the small, yet highly significant addition to the proximity concept. As mentioned, proximity had thus far encompassed only physical, circumstantial and causal variations. The majority in Bryan added a fourth to this list of possibilities - that of a physical object creating a nexus. It was first thought that the object concerned (a dwelling house) came within one or more of the existing categories. However, the High Court explained the situation in this way:

"It is likely that the only connection between such a builder and such a subsequent owner will be the house itself. Nonetheless, the relationship between them is marked by proximity... The connecting link of the house is itself a substantial one." [70]

By invoking proximity through the object, the court completed the potential for proximity to lead to confusion. Take, for example, the family vehicle. It could be argued that a car is the second most significant investment of an individual, and further represents the values of independence and security in our society. What of a holiday home, or investment property? All very significant to the individual, but would the court be willing to impose the requisite proximity through these objects prima facie?

If the court were to make this assumption, it is probable the issues of reliance and responsibility [71] would come into greater play. It is thus possible to predict the response to a claim based on loss to an owner or lessee of a commercial building or city high-rise. Again, the linking object of the building itself exists, but what of the assumed responsibility and reliance? If the court decides on policy grounds to deny such claims (and I think it will), it will do so on the basis that the reliance in a commercial situation is not reasonable. It is relatively simple for the court to claim that business people are in the position to protect their own interests, and as such the court need not intervene [72] .

This is not to suggest the investment made is any less significant (it is likely greater), or that thousands of Mrs Maloney's have not similarly invested their savings in such a commercial venture. The court, for the moment, feels safe in granting relief to the Mrs Maloneys' out there for one simple reason:

"...there is no basis for thinking that recognition of a relationship of proximity between builder and owner with respect to that particular kind of economic loss would give rise to the type of liability "in an indeterminate amount for an indeterminate time to an indeterminate class" which the courts are reluctant to recognize." [73]

A clear distinction is not forthcoming regarding which properties generate sufficient proximity and which do not.[74] The significance of the family home is understandable on policy grounds, however the proximity analysis evidenced here smacks of post-justification. Below is a discussion of what is perhaps the true logic of the majority court in Bryan. A stripping of the façade gives some insight into what some consider a better approach [75] .

Dangerous Defects

An interesting development in some Commonwealth countries has seen the functional distinction between dangerous and non-dangerous defects. In these jurisdictions, most notably Canada and the U.K., only defects that pose a danger to the safety of the occupants give rise to a liability for the cost of repairs. In all other ways the law is identical.

In one sense, this follows the origins of proximity principles that ignore loss outside the physical, causal or circumstantial 'closeness' of risk to life or limb. Yet it ignores the fact that both suffer a recognisable loss at law (physical or economic) and both are liable for the same expenditure if the dangerous defect does not claim a victim. The policy also fails to realise the possible anti-social impact of such findings.

Suppose, for example, two people realise a dangerous defect is likely to develop in a building. One individual rectifies the situation promptly and the other chooses to wait until the situation degenerates, eventually causing a serious bodily injury. The second individual in both Canada and the U.K. would be allowed to pursue an action for the costs of the ultimate failure, while the first prudent and publicly minded individual is forced to shoulder the entire cost of repairs. Both situations were brought about by the negligence of the original builder.

The courts in Australia at least have determined that this type of outcome is unacceptable. The justice system should encourage a spirit of general responsibility in the management of structures with potential to harm [76] . However, the imposition of liability for non-dangerous defects has its own pitfalls. First, litigation as a tool of consumer protection is of little use where the stakes are too small. Second, the court is required to assess the original terms of contract to decide whether there is a defect at all. As discussed below, at a sufficiently low price, a sub-standard foundation may be a bargain.

It may be that the 'dangerous defects' policy represents the views of modern society. More likely, however, is the fact that the ordinary citizen (and courts) would find it very difficult to assess which structural defects are dangerous to their occupants and which are not. Surely it is only a matter of time before any defect, however minor, becomes a risk to life or limb. Perhaps most surprisingly, if it is understood that these duty analyses apply equally to defective products of a general consumer nature, a snail in a bottle is dangerous only when left long enough to cause disease. How much greater is the nervous shock at finding your most significant investment has diminished in value. Either way, it will be necessary to both repair the house and buy a new bottle of beer. A 'dangerous defects' policy is not an acceptable alternative.

Contract Analysis

In marked contrast to the attention given to issues of loss categorisation, the court considered contractual implications at length [77] . This is surprising, considering the contract between Mr Bryan and the original owner contained no provision as to the liability of the builder. The High Court did, however, use the presence of a contract to aid in the finding of proximity [78] . The court also speculated that a contract, to which Mrs Maloney was not privy, had the potential to vastly influence her success in an action against Mr Bryan. The fundamental issue for Mrs Maloney was the possible effect of the contract on her standing as a non-contractual subsequent owner.

"...in some circumstances, the existence of a contract will... constitute a factor favouring the recognition of [sufficient proximity]... In other circumstances, the contents of a contract may militate against recognition of a relationship of proximity, ...or even exclude the existence of a relevant duty of care."[79]

It was stated [80] a duty was owed because of the contract, not in spite of the contract as might have been expected.

Two features of the majority position are relevant to this argument. First, contracts traditionally act to limit the scope of liability entered into by the parties. Once agreed, each individual involved should be aware of all obligations and responsibilities and have had the opportunity to negotiate price as against risk - even to specifically exclude potential liability. Now we find that the court has circumvented the protection the contract once afforded both a builder and its client. The court surmised the following where an original contract contained specific clauses limiting the builder's liability:

"...while such a contractual exclusion would be relevant to identifying the task upon which the architect had entered, it could not directly operate to discharge the architect from a duty of care which would otherwise exist "to persons who are strangers" to the contract."[81]

However, the builder may have been specifically directed pursuant to the contract to exclude certain items which, against the builders best judgement, have been omitted or modified to reduce costs. In this instance, the contract specifies an action that could subsequently be classed as negligent, and as noted, the terms of the contract do not directly operate to discharge a duty. For negligence law to find that an agreement between two parties is anything more than just that, is to compromise the High Court's very own principle of 'personal advantage' which seeks to allow business dealings to be regulated almost exclusively by market forces of supply and demand [82] .

Secondly, the court alluded to the as-yet under utilised possibilities of pursuing contractual claims in tort.

"[I]n the present context, the common law is not antipathetic to concurrent liability, and there is no sound basis for a rule which automatically restricts the claimant to either a tortious or a contractual remedy. ...I do not find it objectionable that the claimant may be entitled to take advantage of the remedy that is most advantageous to him..." [83] .

In so stating, the court has opened the opportunity for circumventing the legislated limitations imposed on various types of action. Implications of this are discussed below.

It is apparent that the presence of a contract between the construction professional and client will not limit a tortious duty owed to avoid economic loss. It will, however, have a bearing on the standard of care owed - potentially imposing a greater obligation than under the contract itself. It now seems the risk has been elevated, creating an unacceptable contractual imbalance. As such, the focus of litigation shifts toward flexibility in actionable grounds. This surely will be of increasing significance in the construction litigation field, which will likely prompt further policy limitations by the courts.

Legislative Initiatives

In 1998 the draft legislation "Proposals for a Building Act for Western Australia" [84] was introduced. Objectives for this new bill were said to specifically include tackling issues of liability in the construction industry. Instead, we have a proposal for legislation that does not attempt to do these things. It has been claimed that it is not possible to address liabilities in a largely unregulated industry such as exists in WA. Regulation can be achieved through a process of registration, allowing the professional bodies to vouch for and appropriately insure their members. Without registration, it is not possible to determine which individuals have the relevant limits on liability. As is infamous in the design / construction field, there are many hybrids of professional / trades persons who participate in the design and manufacture of buildings in WA. Thus, we have a situation where qualified persons are virtually indistinguishable from those who simply choose to set-up as a 'designer', or 'construction professional'.

Registration, being the traditional regulatory approach, has been successful in comparable industries [85] . Building surveyors in WA, for example, have a system of registration and as such have been specifically granted a limited liability under the proposed legislation. This requires the registered member to carry a certain level of insurance in exchange for which they receive protection under the proposed Act [86] . Other professions, such as Architecture and Interior Design, have concluded that the industry is self-regulating successfully, which should make control unnecessary. Unfortunately, the reality of the situation is that the majority of architects and interior designers are not members of their relevant professional bodies, thereby making registration unfeasible. This is evident in earlier attempts of regulation comprising ongoing professional development. Membership was restricted to those who had completed a certain minimum of professional development hours, but of course if professionals saw no need to be members (or had particular objections to membership), they likely saw no need to maintain their professional knowledge in that way.

Historically, the success of transferable warranties has been mixed, but one constant exists - that of a simplification of liability calculus for the courts in buildings defects scenarios. Some Canadian states have legislated [87] for liability on individuals whose homes contain a certain type of toxic insulation. It is incumbent on the current owner not to sell the house until the situation has been rectified. All property transfers require an undertaking that the defect has been rectified, or that there is no reason to suspect the structure contains any banned substances. In this way, the liability for current hazards is placed with the current owner, rather than the original builder.

Another option for the builder in protecting their interests is to contract for an indemnification of liability. These clauses or sub-contracts function as a trust or agency where the original purchaser is bound to indemnify the builder against subsequent liability of an agreed kind, and is also bound to bind subsequent purchasers for the same indemnification. Thus, when a builder might be held liable in the future, the current owner will always bear the financial burden. If the contractual chain has been broken, the person who neglected to contract for the passing on of indemnity will ultimately bear the losses. The system lacks finesse, but in the interim between Bryan and appropriate legislation, it may suffice.

Multiple liability for the same negligence has been raised as one possible outcome of the Bryan Case. It has been suggested [88] that to successfully avoid the possibility of multiple suits against builders, the Torrens [89] system of registration could be amended to include a reference to any defects suits and their outcomes. In this way, the builder can be protected against a subsequent purchaser that may wish to seek damages for the same losses. The title certificate might include reference to defect type and extent, damages awarded and possibly of rectification works carried out. It is also possible that a notification of defects work could function as a caveat - the land is not transferable until an inspection to the satisfaction of local authorities had been carried out.

The multiple suit issue stems directly from the inability of courts to order that damages should necessarily be used in the rectification of the defects on which they were calculated. A number of alternate measures can be used by courts to ensure damages are put to their 'intended' use [90] . First, an undertaking may be provided by plaintiffs who seek substantial damages, that the defects will be fully rectified within a reasonable time. Where appropriate, an order of specific performance would be the logical next step in this process, although supervision may be problematic. Further, if parties were estranged, a strict undertaking could be requested with an acceptance of liability if a bona fide purchaser for value were to suffer loss if the homeowner was to neglect his or her duty. Finally, in extreme cases of both significant defects and corresponding damages, the legislature may see fit to impose fines to encourage compliance by plaintiffs. It might be appropriate to give some control over the works to a local authority, or at least call upon them to closely supervise the work.

In the light of information presented, it is evident the Bryan decision raised more issues than it resolved. The only guaranteed outcome of the controversy is continued litigation in the familiar style of High Court jurisprudence. Some of the more immediate concerns are dealt with below.

Implications

The following explores the impact, both present and future, of the duty law as it stands in Australia. It is intended to address issues encountered in the obiter of cases previously discussed and in extra-judicial work by members of superior courts. This includes some original speculation, but mostly original observation - the substance of which has already been provided. The Honorable Justice S.P. Charles, as evidenced by his most recent publication "Bryan v Maloney - Historic Development" [91] , would generally support the following material. Each point takes the shape of a prediction or assertion as to the current or probable future of the law.

The duty of care owed by a builder could attract liability for indeterminate periods, with a limitation commencing only upon the occurrence of damage and knowledge of that damage. A breach of contractual obligations, either express or implied, has potential to give rise to a duty in tort. Given the 'discoverability' aspects of pure economic loss, it is foreseeable that the limitation period for what is essentially a contractual breech could run indefinitely. This certainly provides the opportunity for people such as Mrs Maloney to pursue damages in the tort sphere where there was never a contractual privity. But where contracts have existed, there are two possibilities for circumvention of pre-determined contractual relations. First, any exclusion clause that may have applied does not necessarily limit the tortious duty owed. Secondly, the limitation on a contractual suit is six years running from commencement of the work, whereas latent defect liability runs from the occurrence or reasonable knowledge of the damage. Both of these issues have been canvassed in detail above.

A builder may be subjected to a duty of care that is comparable to an additional warranty. Statutory warranties typically impose a transferable right for consumers to compel an original manufacturer to correct defects if brought about by negligence. Warranties are viewed as a possibility for WA and were discussed in '4. Alternate Theory' above. In the context of Bryan, the effect of the liability imposed was the same as if the builder were to honour a transferable warranty of structural integrity. To the extent that a duty of care finds in favour of the subsequent purchaser, it enlarges rights given under any existent statutory warranty [92] . This generates a conflict between rights granted by the Parliament, and those found by such an extension of the common law.

The liability imposed on a builder would exceed that of a chattel manufacturer to a subsequent purchaser. As to the application of Bryan-type findings to other areas of liability, Lord Denning in Dutton stated:

"I would say the same about the manufacturer of an article. If he makes it negligently, with a latent defect he is undoubtedly liable. Suppose that the defect is discovered in time to prevent the injury. Surely he is liable for the cost of repair."[93]

The High Court was at pains to point out that the Bryan decision should be strictly limited to its facts. It was stated specifically that it could not be assumed the findings would apply equally to chattels in a manufacturer liability case. But of course, as proximity is held as the general determinant in such cases, the object itself carries the requirement by its nature. The House of Lords in Murphy's Case [94] (1991) made the High Court aware of this potential long before Bryan. Here the House could see "no reason in principle for not so extending the duty if recovery were to be allowed by the subsequent purchaser of defective premises." There are, however, many reasons in practice and certainly in policy that might preclude extension of the principle to chattels. Not the least of which are reasons expressed in the floodgates argument of Caltex. The High Court has attempted to control this potential by simply asking people not to use the newfound liability for any other purpose:

"In particular, the decision in this case should not be seen as determinative of the question whether a relationship of proximity can, in some circumstances, exist between the manufacturer and the purchaser or subsequent owner of a chattel in respect of the diminution in the value of the chattel which is sustained when a latent defect in it first becomes manifest."[95]

With respect, damage to a chattel and duty to a subsequent purchaser is the very same proximate relationship and damage-type as found in Bryan [96] . The House of Lords was correct in observations as to the similarity in principle. As of yet, the High Court has not been tested with such a case.

Consider a circumstance where a proprietor claimed the cost of repairs and, having received compensation, sold the property without applying the proceeds to repair the structure, and without any reduction in the price. Policy would militate against a tortfeasor paying more than once for any damage caused. This would be based inter alia on principles of 'finality of action' and equity. However, the law as it stands does not directly address the possibilities that now exist in post-Bryan law. To reference one prominent counsellor:

"The problem of multiple liability is very real." John Gilmour QC. There are a few possibilities that might further protect the negligent builder. First, the principle of caveat emptor may apply in circumstances where it was reasonable the homebuyer should have discovered the defect before purchase. Second, a fraudulent concealment of defects is actionable if the defect would otherwise have been discoverable on inspection (see Koutsonicolis v Principe & others (1987) [97] ). Finally, section 52 of the Trade Practices Act [98] will apply in a misleading and deceptive conduct scenario, only if the transaction was in 'trade or commerce'. The state Fair Trading acts [99] , however, relate to any act in the disposal of land generally. It should be noted that silence in dealings can also constitute a breach of s52 TPA (s10 FTA) - see Henjo Investments Pty Ltd v Sydney Building Information Centre Pty Ltd (1995) [100] . Therefore, the builder in a latent defect suit may only be liable where the vendor of the home is not available.

Finding for the plaintiff in Bryan has created the opportunity for builders to be indeterminately liable in the sense of an insurance risk. It is difficult for both insured and insurer to assess the magnitude of liability, and the time frame in which it might arise. This in turn affects the ability of builders to assess their financial situation, both while trading and after sale or retirement of business. Where unknown liability exists, it tends to produce anti-consumer forces such as escalation of costs to offset perceived risks, and the possibility of less aggressive lending for business application [101] .

Conclusions

The vast complexity of the issues surrounding Bryan v Maloney contributes in no small way to the difficulty experienced in an analysis and commentary of the law. The members of the High Court have not yet fully come to terms with the many subtle and amorphous concepts involved. None who is completely aware of the difficulties professes to have an entire and immediate solution.

The constant theme in this area of the law is an ever-expanding liability for construction professionals. Bryan v Maloney presented the opportunity for Australian liability law to develop appropriately and effectively. The courts have taken advantage of some scope for change, but it is clear that the issues discussed remain largely unresolved.

Criticism of this particular approach to negligence need not include criticism of the outcomes achieved. There are no objections as to the results achieved by Bryan, or to the damages awarded in many other cases cited. It is quite clear that protection of people like Mrs Maloney is essential - but at what cost to jurisprudential integrity? The way in which the law has been contorted to provide a 'legal' solution is ultimately counter-productive to the ordered development of the law in this country. It must be possible to hold such negligence accountable and yet place liability only where policy would demand it. Suggestions have been made for change, yet the greatest challenge for any precedent-making body is to avoid decisions that can not be applied across the spectrum. In such a volatile transitory period, the High Court may continue to avoid making precedent, knowing it can rise to haunt them just as Bryan has. As for proximity, McHugh J and others hold doubts as to whether the doctrine will continue as a permanent feature of the law. At an extrajudicial seminar in May 1998, his Honour said:

"The difficulty with proximity, as I see it, is that it is a legal rule without specific content and merely records the result of a finding reached on other grounds" [102] .

Some hope exists that the High Court will eventually see fit to leave the warrantable nature of buildings to the legislature [103] . Others [104] , even before the Bryan Case was handed down, thought that the particular nature of auctions in Melbourne and other parts of the country attract a special protection by the courts under the umbrella of tort. For now, it may be that the industry can self-regulate effectively. In the absence of protective legislation for design and construction professions it is perhaps better that the industry develop better standards of practice to avoid the risk of liability. For all professions, both governmental and judicial policy should encourage safe and competent practice methods for the benefit of the wider community.

My conclusions are essentially these. The High Court is endeavouring to do what they believe to be right, yet are approaching the issue from a flimsy and unsustainable premise - namely the twin concepts of proximity and pure economic loss. A conscious effort must be made to introduce a more certain path along which the law can develop.

Bibliography

Primary Sources

Legislation

Fair Trading Act 1986 (WA)
Limitation Act 1935 (WA)
Professional Standards Act 1997 (WA)
Property Law Act 1969 (WA)
R.A.I.A. Draft Scheme 1997 (NSW)
Trade Practices Act 1974 (Cth)
Transfer of Land Act 1893 (WA)

Case Law

Anns v Merton London Borough Council [1978] 3 AC 728
Bryan v Maloney (1995) 182 CLR 609; [69 ALJR 375; 128 ALR 163; [1995] Aust Torts Reports 62,092 (81-320)]
Caltex Oil (Australia) Pty Ltd v The Dredge 'Willemstad' [1976] HCA 65; (1976) 136 CLR 529
Caparo Industries Plc v Dickman [1990] UKHL 2; [1990] 2 AC 605 (HL), 617-18
Donoghue v Stevenson [1932] AC 562
Dutton v Bognor Regis Urban District Council [1972] 1 QB 373
Hackshaw v Shaw [1984] HCA 84; (1984) 155 CLR 614
Hawkins v Clayton (1988) 164 CLR 539
Hedley Byrne & Co Ltd v Heller & Partners [1963] UKHL 4; [1964] AC 465
Henjo Investments Pty Ltd v Sydney Building Information Centre Pty Ltd (1995) ATPR 241 Hill v Van Erp (1997) 71 ALJR 487
Jaensch v Coffey [1984] HCA 52; (1984) 155 CLR 549
Junior Books Ltd v Veitchi Ltd [1983] 1 AC 549
Koutsonicolis v Principe & Others (1987) ANZ ConvR 273
Murphy v Brentwood District Council [1991] UKHL 2; [1991] 1 AC 398
Pyrenees Shire Council v Day [1998] HCA 3; (1998) 72 ALJR 152
Romeo v Conservation Commission of the Northern Territory (1998) 72 ALJR 208
Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 157 CLR 424
Woollahra Municipal Council v Sved (1996) 40 NSWLR 101
Zumpano v Montagnese (1997) Aust Torts Reports 81-406

Books

Bailey, Ian H., Construction Law in Australia: For Architects, Engineers, Builders and Students (Sydney: Law Book Co., 1981)

Burns, A, & Fenwick-Elliott, R, Construction Disputes: Liability and the Expert Witness (London: Butterworths, 1989)

Cooke, John R, Architects, Engineers and the Law: Commentary and Materials (North Ryde, N.S.W : The Law Book Company, 1989)

Holyoak, J. H, Civil Liability for Defective Premises (London: Butterworths, 1982)

Robert, F, Architect and Engineer Liability: Claims Against Design Professionals. (London: Hedemann Press, 1994)

Samuels, Brian M, Construction Law (Englewood Cliffs, N.J: Prentice Hall, 1996) Secondary Sources

Journals

Charles, S, P, "Bryan v Maloney - The Judicial Reaction" (1997) 13 Building and Construction Law 280

Cooke, R, "An Impossible Distinction" (1991) 107 Law Quarterly Review 49

Dejersey, P, " The Historical Setting - Bryan v Maloney" (1997) 13 Building and Construction Law 290

Fleming, J, "Tort in a Contractual Matrix" (1993) 5 Canterbury Law Review 269

Hayano, L, "Property Damage or Economic Loss?" (1996) 11 Tort Law Review 177

Mead, P, "Analysis of the High Court's use of Proximity in Bryan v Maloney." (1996) 4 Building and Construction Law 26

Trent, L, "Other Developments in Relation to the Duty of Care in Tort" (1996) 7 Insurance Law Journal 89

Vaggelas, K, "Proximity , Economic Loss, and the High Court of Australia" (1997) 11 Tort Law Review 174

Wallace, I, "Bryan v Maloney Revisited in Victoria" (1997) 3 Tort Law Review 154

Wallace, I.N, "The Murphy Saga in Australia: Bryan in Difficulties?" (1997) 113 The Law Quarterly Review 357

Winterton, J, "The Use of Damages for Rectification Works" (1998) 14 Building and Construction Law 4

Winterton, J, "Topics of Interest" (1998) 14 Building and Construction Law 5

Yeo, S, "Rethinking Proximity: A Paper Tiger?" (1997) 5 Tort Law Review 178

Seminar papers/Reports

Justice McHugh "Liability for Property Damage - Recent Trends", seminar given at LaTrobe University, Melbourne, May 14th, 1998

NSW A-G Dept. Limitation for Professional Liability for Financial Loss (Canberra : Government Press, 1989)

Select Committee on Professional and Occupational Liability, FinalReport / Parliament of Western Australia, (Perth, W.A.: The Committee, 1994)

Trade Practices Commission, Architects: Study of the Professions, Final Report September 1992 (Canberra : Trade Practices Commission, 1992)

W.A. Department for Local Government Proposals for a Building Act for Western Australia (Perth : Department for Local Government 1998)

Other

Halsbury's Laws of Australia [300-45] vol 34, 547

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Notes

[1] Bryan v Maloney (1995) 182 CLR 609; [69 ALJR 375; 128 ALR 163; [1995] Aust Torts Reports 62,092 (81-320)]

[2] Hayano, L, "Property Damage or Economic Loss?" (1996) 11 Tort Law Review 177

[3] Wallace, I, "Bryan v Maloney Revisited in Victoria" (1997)

[3] Tort Law Review 154

[4] Trent, L, "Other Developments in Relation to the Duty of Care in Tort" (1996) 7 Insurance Law Journal 89

[5] Caltex Oil (Australia) Pty Ltd v The Dredge 'Willemstad' [1976] HCA 65; (1976) 136 CLR 529

[6] ibid at 590

[7] Jaensch v Coffey [1984] HCA 52; (1984) 155 CLR 549

[8] see for example Hackshaw v Shaw [1984] HCA 84; (1984) 155 CLR 614 at 680

[9] Sutherland Shire Council v Heyman [1985] HCA 41; (1985) 157 CLR 424

[10] refer supra, n 3 at 158

[11] Anns v Merton London Borough Council [1978] 3 AC 728

[12] Murphy v Brentwood District Council [1991] UKHL 2; [1991] 1 AC 398

[13] Hedley Byrne & Co Ltd v Heller & Partners [1963] UKHL 4; [1964] AC 465

[14] Dutton v Bognor Regis Urban District Council [1972] 1 QB 373 at 47

[15] ibid as per Lord Denning at 83

[16] see 3. 2 'Proximity', p 7

[17] supra, n 1 at 687

[18] supra, n 1 as per Mason CJ, Deane and Gaudron JJ at 605

[19] Vaggelas, K, "Proximity , Economic Loss, and the High Court of Australia" (1997) 11 Tort Law Review 174, 190

[20] supra, n 4 at 26

[21] Wallace, I.N, "The Murphy Saga in Australia: Bryan in Difficulties?" (1997) 113 The Law Quarterly Review 357

[22] supra, n 1 at 623

[23] Junior Books Ltd v Veitchi Ltd [1983] 1 AC at 549

[24] supra, n 2 at 169

[25] supra, n 1 as per Toohey J at 723

[26] see for example, supra, n 12 at 173; and supra, n 13 at 433

[27] supra, n 14 as per Lord Denning at 83

[28] Halisbury's Laws of Australia [300-45] vol 34 p547,101

[29] supra, n 1 as per Brennan J at 736

[30] http://www.vic.gov.au/gas/wpc3.htm

[31] supra, n 1 as per Brennan J at 736

[32] see Part 3.1 'Economic Loss', p4

[33] supra, n 5 at 573-574

[34] see for example supra n 5 at 529; supra n 8 at 465; and supra n 9 at 424

[35] supra, n 13 at 472

[36] Donoghue v Stevenson [1932] AC 562

[37] Caparo Industries Plc v Dickman [1990] UKHL 2; [1990] 2 AC 605 (HL), 617-18

[38] supra, n 7 at 39

[39] supra, n 9 as per Deane at 230

[40] supra, n 9 at 230; and supra, n 7 at 985

[41] Hill v Van Erp (1997) 71 ALJR 487

[42] ibid at 58

[43] supra, n 7 as per Deane J at 51-53

[44] supra, n 41 as per Dawson, Toohey and Gummow JJ at 57

[45] supra, n 41 as per Dawson, et al, at 565

[46] Hawkins v Clayton (1988) 164 CLR 539

[47] supra, n 41 as per Gaudron at 598

[48] supra, n 4 at 88

[49] Mead, P, "Analysis of the High Court's use of Proximity in Bryan v Maloney." (1996) 4 Building and Construction Law 26

[50] ibid at 27

[51] see Part 3.2, 'B) 'The Substance of Proximity', p9

[52] supra, n 41 as per Brennan CJ at 8

[53] Woollahra Municipal Council v Sved (1996) 40 NSWLR 101

[54] Zumpano v Montagnese (1997) Aust Torts Reports 81-406

[55] Yeo, S, "Rethinking Proximity: A Paper Tiger?" (1997) 5 Tort Law Review 178, 180

[56] Fleming, J, "Tort in a Contractual Matrix" (1993) 5 Canterbury Law Review 269, 274

[57] supra, n 13 at 485

[58] Pyrenees Shire Council v Day [1998] HCA 3; (1998) 72 ALJR 152

[59] Romeo v Conservation Commission of the Northern Territory (1998) 72 ALJR 208

[60] supra, n 53 at 199

[61] Donoghue, supra, n 36 at 580

[62] supra, n 57 at 264

[63] see affirmation in Hill v Van Erp, supra, n 41 at 502; and by Toohey J in Pyrenees, supra, n58 at 168; and by Gaudron J in Romeo, supra, n 59 at 232.

[64] supra, n 37 at 645

[65] supra, n 58 at 201

[66] supra, n 1 at 618

[67] ibid

[68] supra, n 1 at 738

[69] see 3.1 'Economic Loss', p4

[70] supra, n 1 as per Mason CJ, Deane and Gaudron JJ at 631

[71] see Part 3.2, 'B) The Substance of Proximity', p9

[72] supra, n 19 at 130

[73] supra, n 1 as per Mason CJ, Deane and Gaudron JJ at 618

[74] ibid at 631

[75] supra, n 19 at 123

[76] supra, n 2 at 175

[77] supra, n 1 at 709-728

[78] supra, n 1 at 683

[79] supra, n 1 at 620

[80] supra, n 1 at 622

[81] supra, n 1 at 625

[82] supra, n 1 at 624

[83] supra, n 1 at 193-94

[84] WA Department for Local Government Proposals for a Building Act for Western Australia (Perth: Department for Local Government 1998)

[85] supra, n 3 at 154

[86] supra, n 84, specifically Proposals 14.2 and 15.3

[87] Winterton, J, "The Use of Damages for Rectification Works" (1998) 14 Building and Construction Law 4

[88] Cooke, R, "An Impossible Distinction" (1991) 107 Law Quarterly Review 49

[89] refer Property Law Act 1969 (WA); Transfer of Land Act 1893 (WA)

[90] see for example, Winterton, J, "Topics of Interest" (1998) 14 Building and Construction Law 5, 6

[91] Charles, S, P, "Bryan v Maloney - The Judicial Reaction" (1997) 13 Building and Construction Law 280, 287

[92] supra, n 3 at 162

[93] supra, n 14 as per Lord Denning at 280

[94] supra, n 12 at 418

[95] supra, n 1 at 608 as per Mason CJ, Deane and Gaudron JJ at 644

[96] Justice Dejersey, P, " The Historical Setting - Bryan v Maloney" (1997) 13 Building and Construction Law 290

[97] Koutsonicolis v Principe & Others (1987) ANZ ConvR 273

[98] Trade Practices Act 1974 (Cth)

[99] Fair Trading Act 1987 (WA)

[100] see Henjo Investments Pty Ltd v Sydney Building Information Centre Pty Ltd (1995) ATPR 241 at 440

[101] supra, n 2 at 180

[102] Justice McHugh "Liability for Property Damage - Recent Trends", seminar given at LaTrobe University, Melbourne, May 14th, 1998

[103] Samuels, B.M, Construction Law (Englewood Cliffs, N.J: Prentice Hall, 1996) 41

[104] ibid at 43