THE COUNCIL OF THE MUNICIPALITY OF WOOLLAHRA v SVED and ORS [1996] NSWCA 521

THE COUNCIL OF THE MUNICIPALITY OF WOOLLAHRA v SVED and ORS

SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL

PRIESTLEY, CLARKE and COLE JJA 21 November 1995, 26 July 1996 [1996] NSWCA 521

Negligence — issue of s317A Local Government Act 1919 certificate for defectively built house — negligent representation by Council in telephone conversation — reliance by purchaser on representation

Negligence — defectively built house — whether duty of care owed by builders to subsequent purchasers — proximity- reliance and assumption of responsibility special and general reliance

Liability of vendors to subsequent purchasers for defective house — incorrect answers given to requisitions — whether constitutes breach of warranty whether duty of care owed by vendors to purchasers

This appeal and the cross-appeals involved claims by the purchasers of a defectively built house (the Sveds) against the Council who inspected the property and issued a certificate pursuant to s317A Local Government Act 1919 in respect of its condition, against the former owners and vendors of the property (the Goddards), and against the builders of the house (the Di Blasios). The trial judge held the Council had been negligent in representing to Mrs Sved that a certificate of compliance would issue. The builders were held not to be liable on the basis that they did not owe a duty of care to the Sveds as subsequent purchasers. The former owners and vendors were also held to be not liable. The Council appealed against the decision, and the Sveds cross-appealed with respect to the dismissal of the claims against the builders and vendors. The Court dismissed the appeal and cross-appeals (Priestley JA dissenting with respect to the cross-appeals).

Held:

LIABILITY OF THE COUNCIL

(1) It was open to the trial judge to prefer the evidence of Mrs Sved. The appellant Council has not established that the trial judge has failed to use or has palpably misused his advantage, or has acted on evidence inconsistent with facts incontrovertibly established by the evidence or which was glaringly improbable: Devries v Australian National Railways Commission (1933) 177 CLR 472.