D&F Estates v Church Commissioners [1989] AC 177

Key point

  • This case is known for introducing the ‘complex structure theory’ (see Lord Bridge’s judgment) to explain the outcome in Anns v Merton LBC [1978] AC 728

Facts

  • Cs were lessees and occupiers of a flat
  • They found that the plaster was loose and brought an action against D builders for the cost of repairs

Issue

  • Was the cost of repairs recoverable in tort?

Held (House of Lords)

  • The cost of repairs was not recoverable as it amounted to pure economic loss

Lord Bridge

Liability for defective property

  • The liability of a builder for defective structure can only arise if the defect remains hidden until the defective structure causes personal injury or damage to property other than the structure itself

Distinguishing Anns v Merton

  • In a complex structure, elements of the structure can be considered distinct and one part can cause damage to another
  • Hence damage can be caused to ‘other property’
  • In Anns v Merton, the defective foundation can be treated as separate from the walls that were damaged
  • However, in the current case it is artificial to treat the plaster as distinct from the decorative surface

Lord Oliver

Distinguishing Anns v Merton

  • Anns v Merton introduced in relation to the construction of buildings a new type of product liability, in no other context has there been cause of action for injury to the defective article itself: p. 211
  • Such a cause of action creates a non-contractual warranty of fitness that is indefinitely transmissible
  • The case is only explicable by Lord Bridge’s hypothesis: p. 212
  • In so far that Anns v Merton is authority that a builder is liable for defective property, their liability is limited to cases where the defect threatens the health or safety of occupants or third parties and possibly other property
  • However, damages are only limited to expenses for averting the danger, no damages for pure economic loss beyond that

Current case

  • In the instant case the defective plaster caused no damage to the remainder of the building and in so far as it presented a risk of damage to other property or to the person of any occupant that was remediable simply by the process of removal

Commentary

  • The complex structure structure theory still retains some relevance today, as held in Murphy v Brentwood DC [1991] 1 AC 398, where a defective part of the property can be considered separate from the rest of the structure if:
    1. it is an ancillary (e.g. electrical wiring, heating boilers) rather than a structural component (e.g. foundation, walls); and/or
    2. it was installed by a separate contractor or subcontractor from the rest of the building which was damaged.