JA Robinson v PE Jones (Contractors) Limited [2011] EWCA Civ 9
Mr Robinson bought a newly built house from Jones under a contract entered into in 1991. In 2004, it became apparent that Jones had failed to construct the chimney flues in accordance with relevant building regulations or good building practice. The agreement for the sale of the house provided that the vendor would complete the work in an efficient and workmanlike manner and that it would not be responsible for any defect which was not within the terms of the NHBC Certificate, nor for any injury, loss or damage arising from any such defect. The vendor and the purchaser were to enter into the NHBC standard form of agreement (which provided that the builder would remedy all defects for a period of two years after completion and serious defects for a period of ten years) and liability for defects was limited to liability under that agreement. Any contractual claim was time barred so the question to be determined by the Court of Appeal was whether the builder owed a concurrent duty of care in tort in respect of the defects (in which case time only started running when the defect was discovered in 2004). The provisions of the contract meant that there was a second item to be decided by the Courts, namely whether the contract provisions excluded any tortious liability.
The Court of Appeal reviewed the authorities in this area and in particular the cases of Murphy v Brentwood [1991] and Henderson v Merrett Syndicates [1995]. It stated that the relationship between (a) the manufacturer of a product or the builder of a building and (b) the immediate client is primarily governed by the contract between those parties. Long established principles of freedom of contract enable those parties to allocate risk between themselves as they see fit.
In the absence of any assumption of responsibility (in the Hedley Byrne sense), there do not spring up between the parties duties of care co-extensive with their contractual obligations. The law of tort imposes a different and more limited duty upon the manufacturer or builder, namely to take reasonable care to protect the client against suffering, personal injury or damage to other property. This duty is owed not only to the customer, but towards others who foreseeably own or use the chattel or building.
The Court then went on to consider when and how a builder may acquire concurrent tortious liabilities through the doctrine of assumption of responsibility (which embraces liability for economic loss). Professional persons are taken to assume responsibility for economic loss to their clients. Typically they give advice, prepare reports etc and they expect their clients to act in reliance on their work product. But when one moves from the realm of professional retainers, it by no means follows that every contracting party assumes tortious responsibilities co-extensive with contractual obligations.
The existence of a contract does not prevent a tortious duty from arising, but the manufacturer/builder must actually assume responsibility to the customer in the Hedley/Byrne sense. In the case of building contracts, the law does not automatically impose upon every contractor tortious duties of care co-extensive with the contractual terms. The Court found there was nothing to suggest that Jones "assumed responsibility" to Robinson. The parties entered into a normal contract for the construction and sale of a house to an agreed specification. There were warranties of quality and Robinson's remedies were set out. The parties were not in a professional relationship in which Robinson was paying Jones to give advice or prepare reports upon which he would act.
Quite apart from this, the contract made it clear that any co-extensive liability and tort had been excluded. These exclusions satisfied the UCTA test of reasonableness.
The main judgment was given by Jackson LJ. Stanley Burnton LJ went on to confirm that it is settled law that the builder/vendor of a building does not by reason of his contract to construct or complete a building assume any liability in tort in relation to defects that give rise to purely economic loss. The same applies to the seller or manufacturer of a chattel. He made a distinction between a person who supplies something which is defective (e.g. a manufacturer) and a person who supplies something which, because of its defect, causes loss or damage to something else. In the case of an architect, the duty of care is not in respect of the value of the drawings, but in respect of the building which is to be constructed in accordance with the drawings.
This is a useful decision. For commercial lawyers, it confirms that, in the normal course of events, a manufacturer does not owe a duty of tort to its customer or, importantly, to persons to whom his customer may sell goods. It is tricky to exclude liability in tort to persons who are not in contractual relationship, but it seems that there may be no need to attempt to do so in the absence of some sort of design or similar obligation.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Brexit And Commercial Contracts (Video)
