Leahy v Rawson

• Jurisdiction: Ireland
• Judge: O'Sullivan J.
• Judgment Date: 14 January 2003
• Neutral Citation: 2003 WJSC-HC 7110
• Court: High Court
• Docket Number: [1997 No. 9681P]
• Date: 14 January 2003

2003 WJSC-HC 7110

THE HIGH COURT

No. 9681P/1997

LEAHY v. RAWSON & ORS T/A GARLAND & MURPHY & ASSOCIATES & IRISH PERMANENT PLC

BETWEEN

SARAH MARIA LEAHY

PLAINTIFF

AND

JOSEPH RAWSON, FERGUS GARLAND AND PETER MURPHY TRADING AS GARLAND AND MURPHY AND ASSOCIATES AND THE IRISH PERMANENT PLC

DEFENDANTS

Citations:

BALFOUR V BALFOUR 1919 2 KB 571

COURTNEY V COURTNEY 1923 57 ILTR 42

MCDERMOTT CONTRACT LAW 2001 161

LAW SOCIETY OF IRELAND V O'MALLEY 1999 1 IR 162

TAI HING LTD V LIU CHONG HING BANK 1986 1 AC 80

PACIFIC ASSOCIATES V BAXTER 1990 1 QB 993

GLENCAR EXPLORATION PLC & ANDAMAN RESOURCES PLC V MAYO CO COUNCIL 2002 ILRM 481

CAPARO INDUSTRIES V DICKMAN 1990 BCLC 273 1990 2 AC 605

SUTHERLAND SHIRE COUNCIL V HEYMAN 1865 60 ALR 1

ANNS V MERTON LONDON BOROUGH COUNCIL 1978 AC 728

WARD V MCMASTER 1988 IR 337 1989 ILRM 400

DONOGHUE V STEVENSON 1932 AC 562

MUNNELLY V CALCON 1978 IR 387

MCGREGOR ON DAMAGES 13ED 1972

CR TAYLOR LTD V HEPWORTHS LTD 1977 1WLR 659

DORAN V DELANEY 1999 1 IR 303

ROCHE & PEILOW 1986 ILRM 189

JOHNSON V LONGLEAT PROPERTIES (DUBLIN) LTD UNREP HIGH 19.5.1976 1978 13 IR JUR 186 (NOTED ONLY)

JARVIS V SWAN TOURS LTD 1973 1 QB 233

RUXLEY ELECTRONICS V FORSYTHE 1996 1 AC 344

Synopsis:

NEGLIGENCE

Duty of care

Negligence - Duty of care - Defective workmanship to premises - Economic loss - Damages - Negligent misrepresentation - Whether duty of care owed in relation to statements as to quality of work - Voluntary assumption of responsibility - Principles to be applied. Contract - Whether contract for construction of extension to premises (1997/9681P - O'Sullivan J - 14/1/2003)

Leahy v Rawson - [2004] 3 IR 1

the plaintiff engaged the first defendant to build an extension to her house and the second and third defendants to certify the work on the recommendation of an agent of the fourth defendant. It transpired that the workmanship was such that the extension was uninhabitable and the plaintiff had to convert the garage to reside in. The first defendant, being the brother of the plaintiff's then partner, submitted that there was no contract between himself and the plaintiff as the arrangement was merely an informal, domestic relationship. The plaintiff claimed that the second, third and fourth defendants owed her a duty of care in relation to certification of the works on the extension.

Held by O'Sullivan J in awarding the plaintiff £96,000, the cost of demolishing and re-building the house extension which measurement of damages would not enrich the plaintiff unnecessarily, that there was an intention to create legal relations between the plaintiff and the first defendant and he was not exonerated from defective delivery of the items contained in his invoices to the plaintiff. The plaintiff had satisfied the test for the imposition of a duty of care on the second defendant when he had reassured her as to the standard of workmanship, which was something outside the terms of the agreement between the plaintiff and himself, namely: harm of the foreseeable type; a sufficient proximity of relationship between the plaintiff and defendant, and; that it was just and reasonable to impose a duty on the defendant. As the second and third defendants were one entity comprising a partnership, the plaintiff did not have to establish liability against the third defendant in his own right. There was no difference in scope of liability as between the first and second and third defendants. No case had been made out against the fourth defendant.

1 O'Sullivan J. delivered the 14th day of January 2003.

Introduction

2 On 5 ^th January, 1996 the plaintiff with her then partner of seven and a half years (James "Jimbob" Rawson, a brother of the first defendant) and her son Gerard now aged 15 returned to Ireland having spent some 21 years in London. She was a trained mid-wife, was soon working towards a master's degree in Marketing, and lecturing in her speciality and was also, of course, a full time parent. She bought a plot of land with a cottage on it for £24,000 of which £22,000 was advanced by the fourth defendant. The sale was agreed in February but before completion she had been to the planning office to ensure that she would be able to build an extension. The cottage is situated at Ballykelly, Cadamstown, Birr, Co. Offaly and is only a mile or so from Kinnitty Castle which has been open as a successful hotel for the past six or seven years.

3 Plans were prepared for the extension by an official in the planning department but were submitted in the name of the first defendant.

Engagement of second and third defendants

4 The plaintiff spoke to Michael Halpin who was manager of the Birr office of the fourth defendant about getting a loan for the extension. She was led to believe that she could borrow up to £50,000 of which £22,000 would be spent on the purchase of the cottage and the balance would be available for building the extension. There was a proviso: because she was employing the first defendant by way of direct labour (I will return shortly to the suggestion raised on behalf of the plaintiff that it was not a "direct labour" agreement) Mr. Halpin told her that she would require an engineer to supervise the works and he went on to recommend the second and third defendants as reputable engineers who performed some 80% of the work for the fourth defendant.

5 The plaintiff initiated contact with the second defendant who prepared a valuation of the cottage for the benefit of the fourth defendant.

6 The plaintiff's evidence is that she indicated to the second defendant that she would be back to him when she got planning permission and indeed this is what she did.

7 There is controversy about the terms of his engagement to which I will return later. Contact was made and a meeting was held between the plaintiff, her then partner Jimbob Rawson and the second defendant in his office. She had come in without an appointment and the second defendant had to leave and the balance of the consultation was taken over by the third defendant, his partner, who was present throughout in the sense that the office is an open plan single room where everybody could see and hear each other and in fact the third defendant was carrying out some photocopying for the benefit of the first part of the meeting.

8 During the second half of this meeting it was agreed that the third defendant would alter the design of the roof of the extension to join it to the hip of the existing building which resulted in a lower angle of some 15°. Arising out of this arrangement the third defendant undertook to go on site to check existing measurements, to liaise with the planning officer Mr. Hussey (who gave evidence) to see whether an alteration would be acceptable within the terms of the existing planning permission and to achieve agreement if possible. This he successfully did.

9 This meeting in the office of the second and third defendants took place probably towards the end of July, 1996. There are two commencement notices in relation to this extension work. One is dated 9th August, and has been prepared by the second and third defendants and gives a commencement date of 16 ^th August; a second is dated 6 ^th August and has been prepared by the plaintiff, albeit partially filled in by the third defendant and controversy surrounds the existence and whereabouts of this notice.

10 The plaintiff was now in a position to inaugurate the extension works: she had planning permission for the required alteration, she had the second and third defendants as engineers (a major controversy exists as to whether they were supervising engineers or merely engaged to certify stage payments) and she had a builder in the person of the first defendant.

Engagement of the first defendant

11 The evidence with regard to the engagement of the latter is that together with Jimbob his brother, he prepared an invoice setting out the works which were required to be done, attached itemised costings against each of the several headings and totalled his price at £9,200. This invoice was presented to the plaintiff who accepted it without any discussion or attempt at bargaining. Indeed her evidence is that she checked with another builder to see what the price should be in order to ensure that she would not be leaving the first defendant short. Further evidence from a quantity surveyor is that this price was a gross underestimate but in answer to me the first defendant said that his estimate did not allow for the payment of any tax. I note, in passing at this point, that it is also part of the defendant's case that all the works that the plaintiff was seeking to have done on the extension were "on the cheap", the first defendant's invoice being an example.

12 There was a certain informality about the works on site. In the first place the plaintiff herself was very busy and was usually not present until the evening when she might be the one who prepared a meal not only for her immediate family but also for the first defendant and any of the other workers (mostly his brother John and other family members all of whom including the first defendant would travel from Wicklow where they lived) for their evening meal. This was not part of the formal agreement but the plaintiff said she was prepared to feed any one who arrived to work on site. On other occasions she might not be able to cook and the cooking was done by Jimbob. A further element of informality was that the first defendant would turn up on site perhaps for three days in any one week arriving perhaps on a Tuesday or Wednesday with his brother, his nephew or one or two others from a small group of friends who were either on or supported a local football team in Co. Wicklow.

13 At the end of the week the plaintiff if she were present, and Jimbob if she were not, would pay all the money due for the work done during...