Murphy v Brentwood District Council [1991] 1 A.C. 398
Facts
D referred the plans for building a house to consulting engineers acting as independent contractors. Despite the consulting engineers’ advice failing to take into account calculation errors in the foundation’s design, D passed the plans. The house was built with a defective foundation. While C was occupying the house, the foundation cracked, causing extensive damage to the walls and pipes. With an estimated £45,000 repair cost, C instead sold the house for £35,000 less than market value in undamaged condition and claimed damages for negligence against D. At first instance, it was held that, in passing the plans, D had relied on negligent advice and, therefore, had itself been negligent. The house defects had become an imminent danger to C’s safety and health while C was in occupation, giving C a cause of action against D.
Legal Issue
Could the owner recover the reduced value of a house from a council which negligently approved defective foundations, where the claim concerned the building defect itself?
Held
The House of Lords allowed the council's appeal and rejected the owner's negligence claim. The cost of correcting the defective building, or the reduced value resulting from the defect, was pure economic loss of a kind not recoverable on the proposed duty. The fact that the defect created a potential danger did not turn the expenditure required to repair the building into compensation for personal injury or damage to other property. The House departed from Anns v Merton London Borough Council. The owner's success in the lower courts therefore did not survive the final appeal. The decision reasserted the distinction between dangerous defects and injury caused by those defects.
⭐ Legal Principle
The cost of remedying a defect in a building itself, or its corresponding loss of value, is ordinarily pure economic loss rather than recoverable property damage in negligence. Murphy overruled Anns and rejected the proposed duty against the council for negligent approval of the defective foundations.
Significance
Murphy is essential when distinguishing a defective asset from injury or damage caused by that asset. An imminent threat does not itself convert repair expenditure into physical injury. The case also illustrates the House of Lords departing from its own precedent. Modern defective-building problems may engage contract, the Defective Premises Act 1972 and subsequent legislation, including the Building Safety Act 2022. Those statutory routes require their own conditions and should not be treated as applying Murphy's rejected Anns duty.
Common exam questions about this case
What error results from calling the repair costs physical damage?
It overlooks that the claim concerns correcting the defective building itself. Murphy classified that loss, and the corresponding reduced value, as pure economic loss. Physical injury or damage to other property caused by the defect would raise different questions. A dangerous condition alone did not change the character of this claim.
What happened to Anns?
The House of Lords departed from Anns and rejected the negligence duty previously used to recover the cost of remedying dangerous building defects. Murphy therefore cannot be presented as merely applying Anns. An examination answer should identify the change in authority and apply the later position to an ordinary current negligence claim.
Does Murphy eliminate every remedy for a defective home?
No. It addresses the proposed negligence duty and the character of the loss. Contractual rights and statutory duties may provide separate remedies if their requirements are met. In a modern problem, consider applicable defective-premises and building-safety legislation without assuming that those routes either always apply or restore Anns wholesale.