Fed: Company can't sue engineers for dodgy building foundations

AAP General News (Australia)
04-01-2004
Fed: Company can't sue engineers for dodgy building foundations

CANBERRA, April 1 AAP - A Townsville company which bought a defective warehouse and
office complex today lost its bid to sue consulting engineers who designed the building
footings.

The High Court today dismissed an appeal by Woolcock Street Investments Pty Ltd, which
had taken legal action against engineers CDG Pty Ltd, formerly Cardno and Davies Australia
Pty Ltd, and John Cameron Johnson.

The court heard the engineers designed the building footings when it was built in 1987.

Woolcock Street bought the complex in 1992.

But the sale contract contained no warranty that it was free of defect. Nor did it
assign to Woolcock any rights that the sellers might have against those involved in the
design and construction of the building.

Neither did Woolcock retain an expert to inspect the building or inquire of the tenants
whether the premises had any structural defects.

It soon turned out that it did. In 1994 substantial cracking appeared, caused by settlement
of the foundations or of the underlying earth.

Woolcock sued the engineers for economic loss, arguing that the foundations were inadequate
and they had breached their duty of care.

Cardno and Davies and Mr Johnson denied they owed Woolcock Street a duty of care in
designing the foundations and denied breach of any such duty.

They said they advised the original owner to allow them to obtain soil tests but he
told them to proceed without them and to use standard structural footing sizes.

The Queensland Court of Appeal held that Woolcock Street's statement of claim disclosed
no cause of action in negligence.

It concluded that the 1995 High Court decision Bryan v Maloney established that the
builder of a house might owe a duty of care to later buyers while those who built or designed
commercial buildings did not.

That High Court decision has now been superseded in most states and territories by
statutory schemes for protection of successive owners of dwellings.

Woolcock Street then turned to the High Court which today rejected their appeal 6-1.

The court held that Woolcock Street could have taken steps to ensure that the sale
contract contained warranties or an assignment of any rights the original owner may have
had in respect of claims for defects.

Further, it was not alleged that the engineers breached any obligation to the original owner.

AAP mb/sb/tma/br o

KEYWORD: WOOLCOCK

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