Bryan the builder-residential work only

The High Court, in the 1995 landmark case of Bryan v Maloney, held a builder of a residential house liable to a subsequent owner for economic loss suffered by way of the reduction in value of the house caused by its defective foundations. Since that decision, several cases in state courts have indicated that any extension of the principle in Bryan to commercial properties is a matter for the High Court. This year, Woolcock Street Investments Pty Ltd v CDG Pty Ltd provided the vehicle for the High Court to revisit the Bryan principle in a commercial context. Faced with the question 'can a subsequent owner of a commercial property who discovers faulty foundations sue the builder for the costs of fixing the problem before it causes any physical damage to person or property?', the resounding response from the High Court has been 'no'. Gleeson CJ, Gummow, Hayne and Heydon JJ in a joint judgment and McHugh J and Callinan J in separate judgements rejected any 'extension' of the Bryan principle to commercial premises. Much to the relief of the construction industry, the Court made it clear that it will be difficult for a subsequent owner to make out a case in negligence against the original builder unless it can show special vulnerability to the risk of injury. Kirby J, in a dissenting judgment, suggested that the extension of liability to commercial builders fits quite comfortably with general principles and lamented the 'incremental' approach to liability presently favoured by the Court. Consequent upon the retirement of Gaudron J, Kirby J appears to be a lonely light on the hill, shining a solitary beacon on matters of principle.<br /><br />The revisitation of Bryan has long been anticipated. However, Woolcock does not provide the solid bricks and mortar craved by the construction industry. Close examination of the reasoning of the Court suggests that it may itself rest on faulty foundations. In his dissenting judgment, Kirby J questions some of the assumptions made by the majority and highlights the deficiencies of the 'stated case' procedure for a re-examination of this particular area of law, thus suggesting that Woolcock may not be completely sound.<br />