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Pirelli re-examined

Published online by Cambridge University Press:  02 January 2018

Ewan McKendrick
Ewan McKendrick*
Affiliation:
St. Anne's College and University of Oxford
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Extract

One of the interesting facets of the decision of the House of Lords in Murphy v Brentwood District Council is the fresh interpretation which it has placed upon some of the earlier leading authorities. One case which has been subjected to this process of re-interpretation is the decision of the House of Lords in Pirelli General Cable Works Ltd v Oscar Faber & Partners. It was rationalised by Lord Keith as a case which fell ‘within the principle of Hedley Byrne & Co Ltd v Heller & Partners Ltd’. The aim of this short note is to subject this re-interpretation to examination and to suggest that, ironically, its consequence may be the adoption of the very proposition of law rejected by their Lordships in Pirelli, namely that the cause of action accrued on the date on which the damage was discovered or should, with the exercise of reasonable diligence, have been discovered.

Type
Research Article
Information
Legal Studies , Volume 11 , Issue 3 , November 1991 , pp. 326 - 337
Copyright
Copyright © Society of Legal Scholars 1991

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References

1. [1991] 1 AC 398.

2. [1983] 2 AC 1 .

3. [1964] AC 465.

4. See, for example, Naughton, (1983) NLJ 854, 865 Google Scholar; Baxter, (1983) NLJ 414, 437 Google Scholar; Burrows, (1983) 46 MLR 509 Google Scholar; Knight, (1989) 52 MLR 395 Google Scholar; Mullany, (1991) 54 MLR 216 CrossRefGoogle Scholar.

5. It is arguable that there is a third issue which arises out of Pirelli which is whether a claim can be brought in tort when the parties are in a contractual relationship. There are dicta which suggest that, in such a situation, a tort claim cannot be brought (see Tai Hing Bank Cotton Mill Ltd v Liu Chong Hing Bank Ltd [1986] AC 80 at 107). But in Murphy Lord Keith stated that in Pirelli the ‘tortious liability arose out of a contractual relationship’, thereby suggesting that he saw no insuperable barrier to the recognition ofconcurrent liability; see generally Bartlett (1991) 7 PN 20.

6. [1989] AC 177.

7. There was no suggestion that the chimney damaged the original factory buildings and so it is suggested that the case cannot be brought within the scope of the ‘complex structure’ theory; contrast Grubb and Mullis [1991] Conv 225 at 228 who suggest that the complex structure theory was the ‘basis’ of Pirelli.

8. [1991] 1 AC 398 at 466. Although Lord Keith stated that the tortious liability ‘arose out of a contractual relationship’, the existence of a contract between the parties is obviously not an essential ingredient of Hedley Byrne liability and so it is suggested that this rationalisation cannot be confined to the situation where the parties are in a contractual relationship.

9. See, for example, District of Surrey v Carroll-Hatch Associate Ltd (1979) 101 DLR (3d) 218 and Dugdale and Stanton Professional Negligence (2nd edn) para 7.31.

10. [1990] 1 AC 831.

11. There may, of course, be a claim against the builder under the Defective Premises Act 1972 but here we are confining our attention to the coherence of the common law rules, although it must be conceded that the enactment of the Defective Premises Act has been used as a justification for the narrow scope of the liability of a builder at common law; see [1991] 1 AC 398 at 457,472,481,491 and 498.

12. [1978] AC 728 at 758-759.

13. [1991] 1 AC 398 at 479,489-490.

14. See also the letter written to The Times by a chartered surveyor, Mr V. William Taylor (The Times 2 March 1990), who points out that surveyors have been treated much more harshly than auditors (Caparo Industries plc v Dickman [1990] 2 AC 605) and Lloyd's surveyors (Mariola Marine Corpu v Lloyd's Register of shipping (The Morning Watch) [1990] 1 Lloyd's Rep 547). He states that it ‘appears that the greater the fee, the wider the publication, and the greater the number of people potentially at risk, the less the responsibility for the negligent statement and adds that, if this is the policy being pursued by the courts, then it is a ‘curious policy’.

15. Ultramares Corpn v Touche (1931) 255 NY 170 at 179, per Cardozo CJ. See also Junior Books Ltd v Veitchi Co Ltd [1983] 1 AC 520 at 532; Caparo Industries plc v Dickman [1990] 2 AC 605 at 621.

16. Problems may admittedly arise where consequential loss of profits is claimed; in such cases floodgates issues may well materialise.

17. (1991) 107 LQR 249 at 259.

18. [1990] 2 AC 605. There is now some evidence that this restrictive approach is filtering through to the lower courts; see James McNaughton Paper Group Ltd v Hicks Anderson & Co [1991] 2 QB 113; Al-Nakib Investments (Jersey) Ltd v Longcroft [1990] 3 All ER 321; cf Morgan Crucible Co plc v Hill Samuel & Co Ltd [1991] Ch 655.

19. [1983] 1 AC 520.

20. [1964] AC 465 at 482,496, 508 and 516; see also Caparo Indurtries plc v Dickman [1990] 2 AC 605 at 619-621 and 635.

21. (1991) 107 LQR 249 at 262.

22. [1964] AC 465 at 482-483.

23. The distinction has proved to be a difficult one in other contexts, for example, in the interpretation of the First Amendment to the US Constitution, giving constitutional protection to freedom of speech; see US v O’Brien 88 S Ct 1673 (1968) and Henkin (1963) 82 Haw LR 63.

24. [1983] 1 AC 520. See to the same effect the judgment of Lord Oliver in D & F Estates v Church Cornmissioners for England [1989] AC 177 at 215. But contrast the views of Lord Keith in Junior Books itself when he said (at p 535) that Hedley Byrne was ‘not in point here except in so far as it established that reasonable anticipation of physical injury to person or property is not a sine qua non for the existence of a duty of care.’

25. Cf Howarth [1991] CLJ 58 at 87 fn 79.

26. [1989] AC 177 at 206.

27. [1964] AC 465 at 525.

28. [1983] QB 409. On the other hand Dennis has been interpreted restrictively by the Court of Appeal in Investors in Industry Commercial Properties Ltd v South Bedfordrhire District Counsil [1986] QB 1034 at 1063 and Richardson v West Lindsey District Council [1990] 1 All ER 296, 310 and it may be said that it will do well to survive Murphy.

29. Smith v Eric S Bush [1990] 1 AC 831 at 862; Cuparo Industries plc v Dickman [1990] 2 AC 605 at 637.

30. See Cane, (1989) 52 MLR 200, at 201-203CrossRefGoogle Scholar; Stapleton, (1991) 107 LQR 249 at 283-284Google Scholar.

31. The most significant modern analysis is provided by Stapleton (1991) 107 LQR 249. See also Sir Robin Cooke (1991) 107 LQR 46 and generally Cane Tort Law and Economic Interests.

32. [1978] AC 728.

33. On which see [1991] 1 AC 398 at 47-79.

34. [1982] 1 WLR 86; D.W. Moore v Ferrier [1988] I WLR 267; Bell v Peter Browne & Co [1990] 2 QB 495; Lee v Thompson (1990) 6 PN 91 ; cf UBAF v European American Banking Corpn [1984] QB 713; Matthew v Maughold Assurance Co Ltd (1985) 1 PN 142.

35. [1983] 2 AC 1 at 18.

36. Grubb [1984] CLJ 111 at 125

37. [1983] 2 AC 1 at 4.

38. [1991] 1 AC 398 at 466.

39. [1983] 2 AC 1 at 16.

40. (1985) 157 CLR 424 at 505.

41. To similar effect see Hawkins v Clayton (1988) 164 CLR 539 at 587-588 and 600-601.

42. [1991] 1 AC 396 at 467.

43. [1982] 1 WLR 86.

44. Other ‘limitation’ cases which need to be considered afresh both from the duty and the limitation perspective are Jones v Stroud District Coumd [1988] 1 Al ER 5; London Congregational Union Inc v Harriss & Harriss (a firn) [1988] 1 All ER 15 and Ketteman v Hansel Properties Ltd [1988] 1 All ER 38.