554

[1978]

[COURT OF APPEAL] A

BATTY AND ANOTHER V.

METROPOLITAN PROPERTY REALISATIONS LTD. AND OTHERS

1977 Oct. 31; Megaw, Bridge and Waller L.J J.

Nov. 1, 2, 7, 8 B

Negligence—Duty of care to whom?—Building site—Developers

and builders inspecting land before building house—Defects
in surrounding land indicating possibility of landslide—
House properly constructed—Landslide damaging garden—
Future landslide likely to damage house—Whether house fit
for habitation—Whether cause of action against builder—Duty
of developers and builders to inspect land C
Negligence—Tort or breach of contract—Property developer—
House purchasers claiming damages for breach of warranty
and negligence—Whether entitled to have judgment entered
in tort as well as contract
The first two defendants, a development company and a
building company, inspected land on one side of a valley.
There was nothing on that land to indicate that it was not
suitable for building purposes but on adjoining land and on D
the other side of the valley there were signs that a further
inspection by experts of the subsoil in the area might have
revealed the presence in boulder clay of a stratum of varved
clay, which was likely to move and, therefore, the hill was
subject to landslips. As a result of their inspection, the
builders purchased and sold the land to the developers and
the developers provided the finance for the builders to build
houses on the land. One of the houses was built on a plateau E
above a steep slope: the house and its foundations were pro-
perly constructed. In 1971, the plaintiffs, husband and wife,
contracted with the developers to take a 999-year lease of the
house and by the terms of the contract the developers entered
into a warranty that the house had been built in " an efficient
and workmanlike manner and of proper materials and so as to
be fit for habitation." In 1974 there was a severe slip of the
natural strata in the hillside below the house. The effect of F
the landslide damaged the plaintiffs' garden but did not affect
the house or its foundations but, within 10 years or less,
further movement would affect the foundations and the house
was doomed. It could not be sold and was valueless.
The plaintiffs claimed damages against the builders and
developers on the ground of negligence and against the de-
velopers for breach of warranty. The judge held that the
developers were in breach of their warranty that the house G
was fit for habitation but, considering that he was bound by
authority not to enter judgment against the developers both in
contract and in tort, he made no formal finding whether the
developers had been negligent. He found that the builders
had been negligent in failing to have further satisfactory
investigations of the area before building on the land.
On appeal by the developers and builders and a cross-
appeal by the plaintiffs that they were entitled to judgment *»
against the developers in both contract and tort: —
[Reported by A. G. B. HELM, ESQ., Barrister-at-Law]
 1 Q.B. Batty v. Metropolitan Realisations Ltd. (C.A.)
Held, dismissing the developers' appeal, (1) that the
A warranty, " and so as to be fit for habitation," was not to be
construed together with the preceding words of the clause so
that fitness for habitation referred only to the manner of
building and the materials used in the construction of the
house; that, since the land on which the house was built had
no proper support, the house was doomed from the moment
of its construction and, in those circumstances, it was not fit
for habitation and the judge had rightly found that the
B developers were in breach of their warranty (post, pp. 563G—
564c).
(2) Allowing the plaintiffs' cross-appeal, that the principle
that a duty could be owed and a person could be held liable
both in contract and tort was not confined to cases where
either a person conducted a common calling and therefore
was under a special type of legal liability or where a profes-
sional man owed a duty in relation to his professional skills;
** that, since on the facts the developers must have been negli-
gent, the plaintiffs were entitled to judgment being entered
against the developers both for breach of contract and in tort
(post, pp. 566F—567A).
Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801, C.A.
applied.
Bagot v. Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197
doubted.
" (3) Dismissing the builders' appeal, that the extent of the
builders' duty to investigate and examine the land before
building on it was to be determined by what a careful and
competent builder would have done in the circumstances and,
therefore, it was not limited to observable defects on land
owned by the builders or to which they had a legal right
of entry if a careful and competent builder would have
p observed defects on neighbouring land and would not have
E built until there had been further investigation of the site and
adjoining land or he had received a satisfactory expert's report
on the condition of the subsoil (post, p. 569B-D); mat, accord-
ingly, a builder's liability for defects in the land was not
limited to ensuring that the foundations complied with the
building regulations and, since the builders had reached a joint
decision with the developers to build on the land, their liability
p was not limited to the duty owed by a builder who builds for a
** development company under the terms of a building contract
• (post, p. 569D-H).
(4) That a builder was liable in damages if it was shown
that there had been physical damage to the building or there
was a present or imminent danger to the health or safety of
the occupiers; that, although there was as yet no damage to
the house or its foundations, the plaintiffs had suffered not only
Q economic loss in that the house was valueless but there had
been physical damage to the garden and, since there could be
• another landslide at any time, there was a present or imminent
danger to. the plaintiffs' safety and, therefore, the plaintiffs had
a cause of action against the builders and judgment had been
properly entered against the builders in negligence (post,
pp. 571D—572A). ' •
_ ". Anns v. Merton London Borough Council [1977] 2 W.L.R.
H 1024, H.L.(E.) applied.
Dutton- v. Bognor Regis Urban District Council [1972]
1 Q.B. 373, C.A. considered.
Judgment of Crichton J. affirmed.
556
Batty v. Metropolitan Realisations Ltd. (C.A.) [1978]
The following cases are referred to in the judgment:
Anns v. Merton London Borough Council [1977] 2 W.L.R. 1024; [1977]
2 All E.R. 492, H.L.(E.).
Bagot v. Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197; [1964] 3 W.L.R.
1162; [1964] 3 All E.R. 577.
Donoghue v. Stevenson [1932] A.C. 562, H.L.(Sc).
Dutton v. Bognor Regis Urban District Council [1972] 1 Q.B. 373;
[1972] 2 W.L.R. 299; [1972] 1 All E.R. 462, C.A. n
a
Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801; [1976] 2 W.L.R.
583; [1976] 2 All E.R. 5, C.A.
The following additional cases were cited in argument:
Gallagher v. N. McDowell Ltd. [1961] N.I. 26, C.A.
Hancock v. B. W. Brazier (Anerley) Ltd. [1966] 1 W.L.R. 1317; [1966]
2 All E.R. 901.C.A. C
Rivto Marine Ltd. v. Washington Ironworks and Walker Machinery and
Equipment Ltd. (1973) 6 W.W.R. 692.
Sharpe V. E. T. Sweeting & Son Ltd. [1963] 1 W.L.R. 665; [1963] 2 All
E.R. 455.
Young & Marten Ltd. v. McManus Childs Ltd. [1969] 1 A.C. 454;
[1968] 3 W.L.R. 630; [1968] 2 All E.R. 1169, H.L.(E.).
D
APPEAL from Crichton J.
On July 1, 1976, Crichton J. gave judgment for the plaintiffs, Raymond
Batty and Helga Batty, against the first defendants, Metropolitan Property
Realisations Ltd., and the second defendants, Trippier Construction Ltd., for
damages of £13,000 in respect of a house 33, Redwood Drive, Rawtenstall,
Lancashire, built above a steep slope liable to movement in the natural
strata of the soil with the result that the house would not stand for longer "
than 10 years. He also awarded the second plaintiff £250 damages for
physical and mental distress. The house had been leased to the plaintiffs
by the first defendants for a period of 999 years and had been built by the
second defendants. The judge found that the first defendants were in
breach of their warranty that the house had been built so as to be
fit for habitation and that the second defendants had been negligent when p
with the first defendants they had inspected the land and had decided to
build although defects in the surrounding land were to be seen which
indicated that further investigation should have been carried out before
the decision to build the house had been made. The plaintiffs' claim
against the third defendants, Rossendale District Council, alleging that
they had been negligent in failing properly to inspect the foundations of the
house was dismissed. G
The first defendants appealed on the grounds (1) that the judge erred
in law in holding that they were in breach of their warranty contained in a
house purchaser's agreement made between the first defendants and the
plaintiffs whereby the first defendants warranted that "the dwelling has
been built or agrees that it will be built: (1) in an efficient and workmanlike
manner and of proper materials and so as to be fit for habitation . . . " JJ
merely because the judge found that the dwelling was in danger of collapse
and incapable of sale; (2) that the judge misled himself in so holding on the
basis that the warranty read " that the dwelling would be built in an efficient
 557
1 QB. Batty v. Metropolitan Realisations Ltd. (C.A.)
. and workmanlike manner so as to be fit for habitation," and not on the basis
of its actual wording, namely " . . . in an efficient and workmanlike manner
and of proper materials and so as to be fit for habitation . . ."; and (3) that
the judge held as set out in ground (1) despite the fact the plaintiffs conceded
that the first defendants could only have been in breach of warranty if
the defects in the adjacent land which caused the danger of collapse and
consequent unsaleability had been discoverable on reasonable examina-
" tion, and that the judge erred in fact in finding that on the balance of
probabilities reasonable examination would have disclosed such defects.
The second defendants appealed against the decision of Crichton J. on
the grounds (1) that the judge erred in law in holding that the second
defendants were under any legal duty to the plaintiffs in relation to the
kind of damage in suit or under a duty to the plaintiffs to inspect or inves-
C tigate land adjacent to the building site, despite the fact that such land,
extensive in area, was not in the ownership, possession or control of the
first or second defendants for the purpose of ascertaining whether there
was any latent defect; (2) that the judge erred in law in holding that the
second defendants were under any duty beyond that of taking reasonable
care to construct the dwelling house in a proper and workmanlike manner
JJ and so as to conform with the Building Regulations 1965; (3) that the
judge erred in law in holding that any duty of care owed by the second
defendants to the plaintiffs extended to or included any damage or loss,
whether present or prospective, suffered in relation to the dwelling house,
the dwelling house being itself the subject of supply by the second
defendants to the first defendants and by the first defendants to the
plaintiffs; and (4) that the judge erred in finding that had the second
E defendants consulted an expert in 1970, the instability of the hillside would
probably have been detected and that, accordingly, the negligence of the
second defendants caused the damage. Such finding was against the
weight of evidence and the judge failed to take any or any sufficient
account as to the finding on boreholes made in 1974, of the unusual
and sophisticated methods necessary to obtain evidence of the landslip in
p 1974 and of the elaborate and uneconomic methods by which it might
have been possible to detect instability in 1970.
The facts are stated in the judgment of Megaw L.J.
Douglas Brown Q.C. and Andrew Gilbart for the first defendants. The
judge had no evidence to justify the conclusion that a reasonable examina-
tion would have disclosed the defects.
G As to the contract, it is the builder's obligation to do his work effec-
tively and properly, and that he is strictly bound to do. He must use
proper materials and the result must be that the house is fit for habitation
so far as the first two warranties can achieve it. There is a breach of
contract if any one of those three ingredients is not complied with, the
third ingredient being fitness for habitation. In this case the builder's
jl duty to survey is part of the obligation to do the work in a proper and
workmanlike manner. It comes within the obligation of efficient and
proper workmanlike. It is not an easy warranty to look at. [Reference
was made to Hancock v. B. W. Brazier (Anerley) Ltd. [1966] 1 W.L.R.
558
Batty v. Metropolitan Realisations Ltd. (C.A.) [1978]
1317 and Young & Marten Ltd. V. McManus Childs Ltd. [1969] 1 A.C. .
A
454.]
Martin Collins Q.C. and John Hoggett for the second defendants. It
is not disputed that there was no privity of contract between the second
defendants, the builders, and the plaintiffs. That affects the duty situation,
the performance of the duty and the damages. Nor is it disputed that the
plaintiffs' house is perfectly well built. There is no breach of the Building
Regulations 1965 or the statutes. There is no defect in the foundations B
of the house. It is common ground that there was nothing to suggest that
any trouble was visible in the specific area of land eventually leased to the
plaintiffs. There were no danger signs within 100 feet which should have
been seen by the second defendants which might have led to the landslip.
The second defendants contend: (1) a builder ought not to be deemed
to be under a duty of care in relation to defects observable upon land which
is not available to him in connection with his operations and which is not
otherwise owned by him or in his possession; (2) if a builder is to be taken
to be under any such duty, it should be limited to defects which are dis-
coverable without subsoil investigation; (3) the second defendants were
under no higher duty than that attaching to any other builder who builds
for a development company under a building contract; (4) if a builder is
to be taken to be under any such duty, no cause of action for breach of it D
arises (a) in respect of damage to the house itself or (b) until the house is
damaged or is in such a condition as to present an imminent danger to
the health or safety of the occupier; (5) in any event the state of the terrain
was not such as to render it careless for the second defendants not to
require further investigation prior to the commencement of building; (6) the
plaintiffs' house has not suffered damage and is not in such a state as to
produce present or imminent danger to the plaintiffs' health or their safety. ^
As to (1), see Gallagher V. N. McDowell Ltd. [1961] N.I. 26 and
Sharpe V. E. T. Sweeting & Son Ltd. [1963] 1 W.L.R. 665. In each case
a claim by an injured plaintiff succeeded against a builder because of a
defect in the building of the house itself.
In Anns v. Merton London Borough Council [1977] 2 W.L.R. 1024,
there was a claim against a local authority for alleged breach of duty for p
enforcement of building byelaws resulting in a building which did not
comply with the regulations. The principal matters were (1) whether
there was a liability on the local authority and (2) the date from which
the cause of action ran: see per Lord Wilberforce at p. 1032.
It is not suggested that a builder building a house to be lived in by
people like the plaintiffs does not fall within the first stage, proximity.
Both Gallagher v. N. McDowell Ltd. [1961] N.I. 26 and Sharpe v. E. T. G
Sweeting & Son Ltd. [1963] 1 W.L.R. 665 were referred to by Lord
Wilberforce. Neither in Dutton v. Bognor Regis Urban District Council
[1972] 1 Q.B. 373 nor in Anns V. Merton London Borough Council
[1977] 2 W.L.R. 1024 was the builder before the court, but the court
had to consider the builder's position, because if he had exemption, as in
the old cases, it would have been unfair to hold the local authority liable, JJ
There is no obligation on the builder to ascertain if there is any danger
on adjoining land provided that he complies with the building regulations.
That obligation rests on the person who is under contract with the plaintiff.
 559
1 Q.B. Batty v. Metropolitan Realisations Ltd. (C.A.)
The case does not concern old underground workings. There is a dis-
A
tinction between land over which the builder has control and on which he
can make boreholes and land over which he has no control. It may be
that there is a duty in relation to something of which you know the exist-
ence or which is apparent.
If there had been breach of building regulations the second defendants
were in breach of the relevant duty. But the second defendants come
B within the exception stated by Lord Wilberforce in Anns v. Merton London
Borough Council [1977] 2 W.L.R. 1024,1032.
[MEGAW LJ. If the builder sees something on adjoining land which
might cause danger, does he take the risk of building? If he does, he is
not rid of the consequences.]
It depends whether the defect is something which is inescapable or
not.
^ It is placing too great a burden on the builder to make him responsible
for investigating adjoining land before deciding whether or not to build,
particularly if he is building under contract for an employer. Parliament
has dealt with the extent of the risk through the Public Health Acts and
the Building Regulations. That is the extent of the protection of the
public. A builder under contract with an employer is required to build
D in accordance with the contract and produce a result. He should not have
a heavier burden than under the Building Regulations. If there is a duty,
it is not a very heavy one. If there is a duty when dealing with adjoining
land, it is one which is easily discharged.
No subsoil examination was required to fulfil the duty. If a builder
sees something which he knows will imperil a house, he should be under
a duty. If the test applied is whether the builder ought to have known,
E there is in practice no protection for the builder. That makes it too wide.
Where the owner of adjoining land which may be dangerous will not
co-operate, the builder has no duty to look for danger. If a builder builds
under contract a house which shortly afterwards becomes worthless, the
responsibility is with the party contracting with the plaintiff.
The builder does not even have to ask himself whether there are any
p signs connoting danger. He has no duty to look at neighbouring land.
If he does happen to look at it and sees a possible danger, he is under a
duty; but he is stffl under no duty to look at adjoining land. If he does
know of something on adjoining land which, without further investigation,
indicates danger, then he would be under a duty.
The second defendants were under no higher duty than any other
builder who builds under a building contract This is not a simple case of
G a builder being asked to tender for a job or of there being an opportunity
for intermediate inspection by the first defendants, because a repre-
sentative of the first and second defendants went together to the site.
Originally the second defendants meant to build on the site, but the
decision to build was made by the first defendants, who bought the land
and engaged the second defendants to build. The plaintiffs have an action
JJ against the first defendants, but not against the second defendants.
If there is a lability under the principle of Donoghue v. Stevenson
[1932] A.C. 562, no cause of action for breach of the duty arises until
the 'house itself is damaged or is in such a state as to present immediate or
560
Batty v. Metropolitan Realisations Ltd. (C.A.) [1978]
imminent danger to the health or safety of the occupier: see Dutton v.
A
Bognor Regis Urban District Council [1972] 1 Q.B. 373, 396, 404. In
this case the claim was solely for economic loss and not the cost of
repairs. As to the nature of damages recoverable, see Lord Wilberforce's
reasoning in Anns v. Merton London Borough Council [1977] 2 W.L.R.
1024, 1039. The responsibility of the builder should be under the byelaws.
There must be a limit to a builder's duty if the distinction between tort
and contract is not to be wholly obscured. B
There is a distinction between a defective product and circumstances
in which money is spent to avert danger. The circumstances are not the
same here, where the claim is for loss of value of the house, not for the
costs of repair. The house will eventually have to be abandoned.
It was against the weight of evidence that the judge found that the
condition of the terrain was such as to make the second defendants
careless in not investigating further before building began, and that, if ^
further investigations had been made, the house would never have been built.
The judge failed to distinguish between the duties of a builder and those
of an engineer. The only specific finding concerning a specific feature to
put the second defendants on their guard was the " cracking " on the bank.
The builders thought that they had good building land and need not look
elsewhere. The cracks were on the bank, and the plaintiffs had no reason D
to suspect the bank. The plaintiffs' house has not suffered damage, is not
in imminent danger of suffering damage, nor is it an imminent danger to
the plaintiffs' health. There is a distinction between a claim for damages
for a defective thing supplied and what is outside the claim. This case is
clearly outside the category of cases where a person has been supplied with
something defective, and the plaintiffs 'have no claim against the second
defendants. E
Benet Hytner Q.C. and A. C. Jolly for the plaintiffs. The plaintiffs
are entitled to judgment in both contract and tort. They should have
judgment in any cause of action which can be proved. There is no
general principle of law to stop it. In personal injury cases plaintiffs get
judgment for breach of statutory duty and in tort. Bagot v. Stevens
Scanlan & Co. Ltd. [1966] 1 Q.B. 197 was wrongly decided: see Esso p
Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801. The present case is one
where duty in negligence arose independently of contract.
The test to be applied in regard to the second defendants was what,
in the circumstances, a competent and careful builder would have done.
Their duty clearly extended to the adjoining land, whether or not they
owned it or had a legal right of entry upon it, if a careful and competent
builder would have seen defects there and would not have begun to ^
build without further investigation of both the site and the adjoining land
or without a satisfactory report by an expert on the state of the subsoil.
It was not enough that the foundations complied with the building regu-
lations. The plaintiffs were entitled to assume that since the house was
built in a joint enterprise between the two defendants, the slope had been
adequately surveyed. The second defendants' liability was clearly not JJ
limited to the duty owed by a builder who builds for a developer under
a building contract. A house built on the edge of Beachy Head is clearly
unfit for habitation. Any fault in land sufficiently proximate to a house
 561
1 Q.B. Batty v. Metropolitan Realisations Ltd. (CA.)
and sufficiently foreseeable puts the builder in breach. If tests had been
conducted on adjoining land the plaintiffs' house would never have been
built. Neither the house nor the foundations had yet suffered damage,
but the plaintiffs had suffered financial loss. The house is valueless. It
can never be sold. The possibility of another landslip at any time
constituted a present or imminent danger to the plaintiffs' safety and they
were entitled to judgment against the second defendants in negligence.
B Brown Q.C. and Collins Q.C. replied.

MEGAW L.J. In August 1971, the two plaintiffs, Mr. Raymond Batty
and his wife, Mrs. Helga Batty, took from the first defendants, Metropolitan
Property Realisations Ltd., on a 999-year lease, a house and garden. The
house had just been built, being one of a number of houses on the same
estate, at Rawtenstall, in the district of Rossendale, in north-east Lancashire.
They paid £5,250 as consideration for what was in all respects other than
a legal technicality a purchase by them of the house. The house became
known as no. 33, Redwood Drive.
The house had been built by the second defendants, Trippier Construc-
tion Ltd., under arrangements made by them with the first defendants,
who are a development company. The land on which the house was built,
D along with neighbouring land on which other houses were built at about
the same time, was sold by the second defendants, who had earlier bought
it from the local authority, the third defendants, the Rossendale District
Council. It was sold by the second defendants to the first defendants.
Under their contract with the first defendants, the second defendants
proceeded to build this house and other houses. When this house had
p been completed and leased to the plaintiffs on a 999-year lease, the first
defendants sold the reversion to the second defendants. Thus, in effect
the building of the house and its disposition was a co-operative effort
by the first defendants and the second defendants, the second defendants
doing the building, the first defendants providing the finance and being
the party with whom the purchasers of the house, the plaintiffs, entered
into contractual relations. Both the first defendants and the second
p defendants, through their representatives, had inspected the site, and also
had walked over the surrounding territory in 1969 and 1970, before the
decision to build was taken and, therefore, before the building had started.
The object of such inspection was to decide, by reference to various con-
siderations, including the safety and suitability of the site for housebuilding,
whether or not they or either of them would undertake, or become involved
in, housebuilding in that area. They decided to build, on the basis, as
G between them, which I have just very summarily outlined.
The house was built on a sort of plateau, as it has been described, at
the top of a steep slope which fell down at a gradient of about 1:3 to a
stream, called the Balladen Brook, which ran in the bottom of the valley
below the house. The front of 33, Redwood Drive faced on Redwood
Drive, with a small front garden between the house and the road. At the
H back of no. 33 there was a piece of land, bought by the plaintiffs along
with the house, which was intended to provide a garden at the back. It
was somewhere down that garden that the relatively level area (it was only
relatively level) which I have called " the plateau " changed its inclination
562
Megaw LJ. Batty v. Metropolitan Realisations Ltd. (CA.) [1978]
to the 1:3 slope which was the general inclination of the slope falling
from there towards the stream. The total area covered by the house 33, A
Redwood Drive and the land sold with it was about 100 feet from front
to back—from Redwood Drive to the bottom of the front garden—and
about 40 feet from side to side in width.
Coloured photographs which we have seen give a reasonably clear
impression of the general nature of the ground in and about the house and
its neighbourhood. They show the steepness and roughness of the hillside B
on both sides of the valley. I shall not attempt to describe the topography
further, as it is unnecessary to do so for the purposes of this appeal.
That was in 1971. The plaintiffs bought their house and moved into
it and made it their home. In 1974 there was a severe slip of the natural
strata of the hillside. It did not directly or immediately damage the
plaintiffs' house or its foundations, though it did cause direct damage to a
part of the back garden. **
As a result, urgent investigations were undertaken and legal proceedings
were begun by the plaintiffs against three defendants—the two already
mentioned and, as the third defendant, the Rossendale District Council, the
local authority.
The gravity of that litigation—its seriousness for the parties—will become
apparent when I recount that it was held by Crichton J., from whose judg- D
ment this appeal is brought, that the plaintiffs' house is doomed; and the
finding on that issue, though it was the subject of much conflicting evidence
at the trial, is not now disputed or challenged. At some time not later
than 10 years from the date of the trial, possibly much earlier, the move-
ment of the strata on the hillside on the slopes adjacent to the plaintiffs'
house will cause the foundations of that house to slide down the hill and
the house will be in ruins. Already, of course, in those circumstances, the "
house is unsaleable.
The reason, or at least the principal reason, as found by the judge, for
this very grave and disastrous prognosis is the presence in the boulder clay,
which is the principal constituent of the hillside, of a layer of what is
described technically as varved clay. I do not need to go into the technical
or geological details. They are not relevant for the purposes of the p
decision of the appeal.
The plaintiffs' claim against the first defendants was in tort, for
negligence, and for breach of contract. Against the second defendants the
claim was in tort for negligence, on what I may call Donoghue v. Stevenson
[1932] A.C. 562 principles. Against the third defendants, the local
authority, it was for negligence or breach of statutory duty, in respect of the
local authority's duties with regard to inspection of the foundations. It &
was, however, held by the judge—and it does not appear to have been
really in dispute—that the foundations as such were perfectly properly
constructed, as were the bricks and mortar of the house itself. The only
defect—but, in the circumstances, a very grave matter—was the nature of
the land on which the house relied for its support. It was unstable, and
by its instability the house was. from the outset, doomed. Thus, for JJ
that reason, and for that reason alone, the house was unfit for human
habitation: because in a foreseeable, and short, time it would collapse,
through the movement of the hillside.
 563
1 Q-B. Batty v. Metropolitan Realisations Ltd. (CA.) Megaw LJ.
. The plaintiffs succeeded before the judge against the first defendants,
though on their claim in contract only, and against the second defendants
on the sole claim against them in tort. They failed against the third
defendants. The judge awarded the plaintiffs, jointly against both the first
and second defendants, £13,000, and he also awarded Mrs. Batty £250 for
the consequences of her distress—the effect upon her, physical and mental,
of these events. Those sums were agreed by the parties as being the
B appropriate sums for damages, subject to liability.
The first and second defendants both appeal. There is a cross-notice
on behalf of the plaintiffs, asserting that, as against the first defendants, the
judge ought to have entered judgment on the claim in tort, as well as on
the claim in contract. That would not have affected the amount to be
awarded in the judgment, but it may be of practical importance to the
plaintiffs none the less. There is no cross-appeal by the plaintiffs as regards
** the dismissal of their claim with costs against the third defendants.
Counsel for all the parties concerned have, if I may say so, presented
their submissions in this court with admirable clarity and conciseness, both
on the issues of fact and on the issues of law which they desire to raise.
I shall seek to emulate their conciseness. In particular, I do not propose
to set out or summarise in any detail the evidence on the various questions
D of fact which were in issue before us, for it appears to me that the
conclusions of the judge on all those issues, as set out in his judgment,
are not only supported by some evidence, but they are supported by
evidence which fully justifies the judge's conclusions thereon. If anyone
should wish to look in more detail at the evidence, he will find it sum-
marised, with the judge's conclusions thereon, in his judgment.
The first ground of appeal argued by Mr. Brown, on behalf of the
first defendants, is concerned with the terms of the contract of sate—or,
rather, the contract relating to the 999 year lease—between the first
defendants and the plaintiffs. That contract was made in writing on August
9, 1971. It is contained in two related documents. The relevant term
provides as follows, under the heading " The Vendor's Obligations " :
" (3) The vendor hereby warrants that the dwelling has been built or
F agrees that it will be built: (i) in an efficient and workmanlike manner
and of proper materials and so as to be fit for habitation . . ."
That the house was not fit for habitation when the contract was made and
when the plaintiffs took possession cannot, in my judgment, be disputed,
on the, now unchallenged, facts which I have mentioned. How, then,
_ do the first defendants seek to escape liability for breach of contract under
this warranty? On behalf of the plaintiffs it was conceded that the
warranty was not absolute: in this sense, that if there were, for example,
some undetectable geological fault, at some distance away, which after
the house was built, caused an earth tremor, damaging or destroying the
house, that would not be within the warranty. But if the instability of the
hillside could have been detected by experts, but was not detected, and
H if as a result the house was, when handed over, unfit for habitation, that,
say the plaintiffs, is a breach of warranty. For the first defendants it is
said that the obligation imposed by the warranty " and so as to be fit for
habitation," though expressed as a separate warranty, co-ordinate with the
564
Megaw LJ. Batty v. Metropolitan Realisations Ltd. (CA.) [1978]
two warranties which precede it in the clause, ought to be read as though
it were expressed as " and so as to be fit for habitation so far as compliance A
with the two preceding warranties can achieve that result."
I am afraid that I cannot accept that construction. It is unnecessary,
as I see it, in this appeal to seek to define whether, and, if so, to what
extent, the warranty of fitness for habitation falls short of an absolute
warranty. I am satisfied that on the facts of this case the warranty, on its
true meaning, was broken. The warranty would be broken if the house B
is unfit for habitation, and is so unfit by reason of defective support from
the adjoining land which a suitably qualified expert could have discovered
before the building of the house was undertaken. The judge has found,
and in my opinion unassailably found, that the lack of fitness for habitation
—the instability of the hillside which spelled the not far distant doom of the
house from the outset of its life—could have been discovered by expert
examination. **
I need do no more than refer to the evidence of Mr. Townsend, the first
defendants' development director, the only witness to be called on behalf
of the first defendants. He, in cross-examination by counsel on behalf of
the plaintiffs, very fairly and very frankly made admissions as to what he
should have realised as a result of his visits to the site: the need for
further investigation. JJ
The judge was right to hold that the warranty was broken, and that
the breach of the warranty was the cause of the house having become
valueless, and the cause of Mrs. Batty's personal loss.
For the first defendants it was further submitted, by reference to the
evidence, that, while the judge held that on the facts known to them the
first defendants should have conducted investigation into the stability of
the hillside, the judge failed to give a clear answer to the question: what **
sort of investigation were the first defendants under a duty to carry out,
having regard to whatever were the symptoms which they should have
observed and which should have put them on warning? Counsel has, pro-
perly, taken us in particular to those passages in the evidence which deal
with certain slips on the hillside which were regarded by some of the
witnesses as being one of the factors which ought to have led to investiga- p
tion. It was stressed by Mr. Brown that the judge ought, on the evidence,
to have regarded these factually as having been at the relevant time what
he called " shallow slips," and that, being shallow slips, that meant that the
investigation which ought to have been conducted, having regard to the
symptoms, was not an investigation (to use the modern phrase, which may
perhaps for once be appropriate here) " in depth," in order to ascertain what
the subsoil contained. In my judgment there is no fault that can properly G
be found in respect of the judge's conclusions on the evidence.
It was suggested that this court should look at the evidence and form
its own conclusion. If this court were to agree with the judge on the
evidence that some investigation was required, in accordance with the
legal duty resting on the first defendants under their contract, then this
court would have to go on to consider for itself what sort of investigation g
was required and what such investigation would have disclosed. The right
conclusion, it was submitted, having regard to the evidence in relation to
the possibly shallow slips and various other matters, would be that such
 565
1 Q.B. Batty v. Metropolitan Realisations Ltd. (C.A.) Megaw LJ.
investigation would not have disclosed anything relevant. To that argument
there appears to me to be one simple answer, offered on behalf of the
plaintiffs. That was, that it was clear, on evidence accepted by the judge
and which he was plainly entitled to accept, seeing and hearing the witnesses,
that, if the defendants had through that investigation—any investigation—
of the stability of the hillside failed to discover a cause of the symptoms
which had led them to investigate they would not have allowed the building
g of the house to proceed. So any investigation, whatever it was and how-
ever short it properly went, would, on that basis, have resulted in the
houses not being built. But no investigation was undertaken at all. I
think that is right. But I am further satisfied, as was also submitted on
behalf of the plaintiffs, that on the evidence the judge rightly held that
the investigation which ought to have been undertaken would not, indeed,
have produced merely a negative result of finding no cause for the
C symptoms, but would have shown, and shown clearly, that there was no
safety margin from the point of view of the stability of the relevant ground;
and, in the absence of a safety margin, no reasonable builder or developer
would erect a building.
In this context I refer to two passages in the judge's judgment. The
judge, having summarised the evidence as to what would have been seen
p on the ground by way of warning symptoms at the time when the building
of the houses was being considered, his findings as to what those symptoms
would be were, in my judgment, fully justified. He said:
"That is the state of the evidence. Where does it lead us to? I
think it leads us in this direction, that these cracks "—I pause there
to say that the word " cracks " there may not be entirely accurate, or
g comprehensive, because I have no doubt that the judge intended to
include other symptoms which he had held to exist—"on the other
side of the valley and at the toe of the slope on ' our' side should
have put Mr. Townsend and Mr. Trippier on inquiry. If they had
been put on inquiry—this is on the point of the cause of this situation
—the probability would be that some instability would have been
found whereby nouses would not have been built. That I will deal
F with later. But at the moment I merely find that these cracks which
existed, in my judgment, in 1970 and 1971 should have put the only
people who investigated that valley on their inquiry."
Later the judge said:
" The evidence—I will come to the question of duty—leads me to the
Q belief that further steps should have been taken in the sense of
consulting either surveyors or soil mechanics experts and also to the
view that had those persons been consulted, having regard to the situa-
tion in that valley, it would be unlikely and improbable that houses
would have been built in the position that the plaintiffs' house was
built."
H Mr. Brown in the course of his argument accepted that, in order to
succeed in his appeal, he had to upset that finding. I do not think that Mr.
Brown's careful submissions on the evidence, with all respect to him,
begin to show that that finding was wrong.
 566
Megaw LJ. Batty v. Metropolitan Realisations Ltd. (CA.) [1978]
I turn to the plaintiffs' cross-notice affecting the first defendants. That
is a cross-notice whereby it is asked that this court should include in the A
judgment against the first defendants judgment based on tort—the judge
having refused to enter judgment for the plaintiffs other than on the basis
of breach of contract. Crichton J., as I understand his judgment, thought
that he was bound so to hold on his reading of a passage in the judgment
of Diplock L.J., sitting as a judge of first instance, in Bagot v. Stevens
Scanlan & Co. Ltd. [1966] 1 Q.B. 197. The judge, having cited that case, B
went on to say:
" I have also had regard in that respect to the case of Esso Petroleum
Co. Ltd. V. Mardon [1976] 2 W.L.R. 583. But I do not find that
this case detracts in any degree from the finding of Diplock L.J."
Esso Petroleum Co. Ltd. v. Mardon is now reported in [1976] Q.B. 801.
I fear that I feel bound to disagree with the judge's view that Esso **
Petroleum Co. Ltd. v. Mardon does not affect the position. We in this
court are bound by What was said in Esso Petroleum Co. Ltd. v. Mardon,
in so far as what was said was ratio decidendi. There can, I think, be no
doubt, subject to one possible distinction which Mr. Brown sought to
persuade us in his reply this morning to be a relevant distinction, that the
ratio decidendi of Esso Petroleum Co. Ltd. v. Mardon necessarily requires p
that in a case such as the present we should hold that the mere fact that
the plaintiffs have obtained judgment for breach of contract does not
preclude them from the entitlement which would have existed, apart from
contract, to have judgment entered in their favour also in tort. I refer
to the judgment of Lord Denning M.R., at pp. 818 to 820. I do not pro-
pose to read it. The sense of it appears to me to be entirely clear, and,
incidentally, to have included Lord Denning M.R.'s view that Bagot v. E
Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197 had been decided without
Diplock L.J. having had cited to him a number of relevant authorities.
The distinction to which I have referred which Mr. Brown seeks to
make is this: that the right of a plaintiff who sues in contract, where the
facts giving rise to the breach of contract would also constitute a breach
of common law duty apart from contract, to have the judgment entered on p
both heads is limited to cases where the common law duty is owed by one
who conducts a common calling and thus is under a special type of legal
liability, and to cases where the duty is owed by a professional man in
respect of his professional skill. Mr. Brown contends that, though there
is no affirmative authority for limiting the right in that way, it ought to be
treated as being so limited because there is no case in the English books,
going back over many years, which shows that the right has been allowed, "
or possibly even claimed, in cases other than the special types of case to
which he referred, and in particular the professional skill types of case.
In Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801 the right was
held to arise in a case where the breach of duty was a breach of an expert
in siting filling stations involving his professional skill. I see no reason, in
logic or on practical grounds, for putting any such limitation on the scope JJ
of the right. It would, I think, be an undesirable development in the law if
such an artificial distinction, for which no sound reason can be put forward,
were to be held to exist. In my judgment the plaintiffs were en tided here to
 567
1 Q.B. Batty v. Metropolitan Realisations Ltd. (C.A.) Megaw L.J.
have judgment entered in their favour on the basis of tortious liability as
well as on the basis of breach of contract, assuming that the plaintiffs had
established a breach by the first defendant of their common law duty of
care owed to the plaintiffs. I have no doubt that it was the duty of the
first defendants, in the circumstances of this case, including the fact of the
joint responsibility which they undertook in arranging for the erection
of this house on this site, apart altogether from the contractual warranty,
B to examine with reasonable care the land, which in this case would include
adjoining land, in order to see whether the site was one on which a house
fit for habitation could safely be built. It was a duty owed to prospective
buyers of the house. How wide or deep the examination had to be, to
comply with the duty, would depend on the facts of the particular case,
including the existence and nature of any symptoms which might give
-, cause for suspecting the possibility of instability. It is clear from the
facts found by the judge that, if he had thought that a finding of tort was
procedurally permissible, he would have held, on his assessment of the
evidence, that the first defendants were in breach of that duty. Accordingly,
I would accept the cross-notice and would direct that judgment be entered
for the plaintiffs against the first defendants for the tort of negligence as
well as for the breach of contract.
D I should add that Mr. Hytner, on behalf of the plaintiffs, contended,
as an alternative ground, apart from what I may call the Esso Petroleum
Co. Ltd. v. Mardon [1976] Q.B. 801 ground, that he should be entitled
to such a judgment in this case because on the facts of this case it would
be the proper view to treat the tort and the breach of contract as being
truly independent of one another. Mr. Brown in his reply this morning
E submitted that that would not be a proper basis. He suggested that if it
were to be upheld it would startle bankers, and also that it would be a
wrong concept of the time by reference to which the duty arises. In the
circumstances, I do not propose to offer any view one way or the other
on that dispute. It is unnecessary to do so, because of my view that
apart from that alternative ground the plaintiffs are entitled to their judg-
p ment in tort.
I now turn to the appeal by the second defendants, the builders. Mr.
Collins very helpfully and clearly put his argument in the form of Six
submissions. The first submission was this. A builder should not be
taken to be under any duty of care in relation to defects in or observable
only upon land which is not available to him in connection with his
operations and is neither owned by him nor is in his possession.
® Mr. Collins, properly and as I think inevitably, conceded that, as he
put it, " in general terms a duty situation can arise between a
builder and an occupier with whom the builder is not in privity of contract."
A duty of the Donoghue V. Stevenson [1932] A.C. 562 type can arise, it
is conceded, in relation to realty. But Mr. Collins contends that the duty
extends only to defects—to symptoms of possible instability, for example,
g affecting properly built foundations—where those defects are in, or observ-
able upon, the actual site on which the house is to be built. If defects
exist on neighbouring land which is not in his ownership or possession—or
in respect of which he would require someone else's permission to go upon
568
Megaw LJ. Batty v. Metropolitan Realisations Ltd. (CA.) [1978]
it—there is no duty, it is said, to look for or to observe or to take any
action in relation to such symptoms.
For this submission, Mr. Collins relies upon a passage in Lord Wilber-
force's speech in Anns v. Merton London Borough Council [1977] 2
W.L.R. 1024,1032. It reads:
"Through the trilogy of cases in this House—Donoghue V. Steven-
son [1932] A.C. 562, Hedley Byrne & Co. Ltd. V. Heller & Partners
Ltd. [1964] A.C. 465, and Dorset Yacht Co. Ltd. v. Home Office B
[1970] A.C. 1004, the position has now been reached that in order
to establish that a duty of care arises in a particular situation, it is not
necessary to bring the facts of that situation within those of previous
situations in which a duty of care has been held to exist. Rather the
question has to be approached in two stages. First one has to ask
whether, as between the alleged wrongdoer and the person who has Q
suffered damage there is a sufficient relationship of proximity or
neighbourhood such that, in the reasonable contemplation of the
former, carelessness on his part may be likely to cause damage to the
latter—in which case a prima facie duty of care arises. Secondly,
if the first question is answered affirmatively, it is necessary to consider
whether there are any considerations which ought to negative, or to
reduce or limit the scope of the duty or the class of person to whom D
it is owed or the damages to which a breach of it may give rise: see
Dorset Yacht case, per Lord Reid, at p. 1027. Examples of this are
Hedley Byrne's case where the class of potential plaintiffs was reduced
to those shown to have relied upon the correctness of statements made,
and Weller & Co. V. Foot and Mouth Disease Research Institute
[1966] 1 Q.B. 569; and (I cite these merely as illustrations, without g
discussion) cases about 'economic loss' where, a duty having been
held to exist, the nature of the recoverable damages was limited: see
S.C.M. (United Kingdom) Ltd. v. W. J. Whittall & Son Ltd. [1971]
1 Q.B. 337 and Spartan Steel & Alloys Ltd. v. Martin & Co. (Con-
tractors) Ltd. [1973] Q.B.27."
Mr. Collins contends that there is a consideration which ought to reduce p
the scope cf the builder's Donoghue v. Stevenson [1932] A.C. 562 duty
to a potential occupier of the house which he builds. That is on the basis
of Lord Wilberforce's " Secondly . . . whether there are any considerations
which ought to negative, or to reduce or limit the scope of the duty . . ."
The scope, says Mr. Collins, ought to be limited by reference to the
builder's statutory duty under the Building Regulations. If he builds
foundations which comply in all respects with those regulations and any G
other statutory provisions, and the defects are outside the area of the
foundations themselves, then the builder has no further duty.
With all respect to Mr. Collins's argument, I do not accept it. Of
course, the question whether or not there has been a breach of the duty
will depend on all relevant considerations going to the question: did the
builder act as a competent and careful builder would have aoted in what JJ
he did or did not do by way of examination and investigation? But I
see no reason why, as a matter of law, or by reference to any question
of policy considerations, as a matter of the existence of the duty, it should
 569
1 Q.B. Batty v. Metropolitan Realisations Ltd. (C.A.) Megaw LJ.
depend on whether or not the symptoms, the observable defects, are on
A
land of which the builder has ownership or in respect of which he has a
legal right of entry without requiring some other persons' permission.
I would reject that first submission.
The second submission made by Mr. Collins was this. If a builder
is under any such duty, it should be limited to defects which are discover-
able without subsoil investigation. The way that Mr. Collins put his sub-
B mission was: if there is a duty on the builder, it is not a very heavy
one. It would not include subsoil investigation. If a builder knows that
what he sees would endanger the stability of the house, it is difficult to say
there is not a duty. Mr. Collins, on being asked by a member of the
court why should that not apply also if he ought to have known, submitted
that that would put too high a burden on a builder, and that it is undesir-
able that the law should put such a duty on him. Mr. Collins accepted, as
I understood it, that this submission of his must mean that he is submitting
that a builder is under no duty Co look at adjoining land: if, however, he
does know, though he had no duty to look, of something on the adjoining
land which indicates a danger without further investigation, he might be
under a duty. I see no reason for limiting the duty as a matter of law
in the manner in Which it is suggested by that submission.
D The third submission was: the second defendants were not under any
higher duty than that attaching to any other builder who builds for a
development company under a building contract. The argument as
developed by Mr. Collins was that the second defendants here were under
no higher obligation than if they had been retained as builders by con-
tractors at arm's length. That is, their duty is no higher because of the
particular circumstances here of the relationship between the developers
E
and the builders and what happened between them in relation to the
inspection of the site before the building started and their arrangements
in regard to the building and what was to happen in relation to it. It may
well be that on certain facts a builder would be entitled to rely upon an
examination which he knew or reasonably supposed had been made by
others on whose competence the builder could properly and reasonably
p rely. But in this case, on the evidence, the true view is that the decision
to build on this site was a joint decision of the builders and the developers,
the second defendants and the first defendants. In my judgment, if one is
a party to the decision to build on the particular site in circumstances such
as were shown in the evidence to exist in this case, the Donoghue v. Steven-
son [1932] A.C. 562 duty applies. Indeed, I have difficulty in seeing
how, as was a part of Mr. Collins's argument at one stage, the fact that
G there was here an intervening contract—the contract for the 999 year lease
between the first defendants and the plaintiffs—can affect the question
whether the second defendants are under a Donoghue v. Stevenson type
of liability. For in Donoghue v. Stevenson itself the whole question of the
manufacturer's liability was considered, and decided to exist, despite the
existence of an intervening contract between the retailer and the purchaser
JJ of the goods.
I would reject the third submission, on the facts of this case. Again,
in my view, it is not a question of the existence of the duty. It is a question
whether, in a particular case, on the facts of that case, it has been broken.
570
Megaw LJ. Batty v. Metropolitan Realisations Ltd. (CA.) [1978]
The fourth submission was this: if a builder is to be taken to be
under any such duty, then no cause of action for breach of it arises (a) A
in respect of damage to the house itself or (b) alternatively until the house
itself is damaged or is in such a state as to present present or imminent
danger to the health or safety of the occupier.
This submission, essentially, as I see it, is founded on a question which
was raised and the view which was expressed by Stamp L.J. in Dutton v.
Bognor Regis Urban District Council [1972] 1 Q.B. 373. Stamp L.J. B
said, at p. 415c:
" What causes the difficulty—and it is I think at this point that the
court is asked to apply the law of negligence to a new situation—is
that whereas the builder had, as I will assume, no duty to the plaintiff
not carelessly to build a house with a concealed defect, yet it is sought
to impute a not dissimilar duty to the defendant council. At this Q
point I repeat and emphasise the difference between the position of a
local authority clothed with the authority of an Act of Parliament to
perform the function of making sure that the foundations of a house
are secure for the benefit of the subsequent owners of the house and a
builder who is concerned to make a profit. So approaching the matter,
there is in my judgment nothing illogical or anomalous in fixing the
former with a duty to which the latter is not subject. The former by D
undertaking the task is in my judgment undertaking a responsibility at
least as high as that which the defendant in the Hedley Byrne case
[1964] A.C. 465 would in the opinion of the majority in the House of
Lords have undertaken had he not excluded responsibility . . ."
I pause here to say that obviously this fourth proposition cannot be treated
as entirely independent of the first of Mr. Collins's propositions, with which E
I have already dealt.
The doubt which was raised by that passage in that judgment of
. Stamp L.J. was, as I see it, put at rest by passages in the speech of Lord
Wilberforce in Anns v. Merton London Borough Council [1977] 2 W.L.R.
1024, 1038 and 1039. Lord Wilberforce said, at p. 1038:
" The position of the builder. I agree with the majority in the Court F
of Appeal in thinking that it would be unreasonable to impose
liability in respect of defective foundations upon the council, if the
builder, whose primary fault it was, should be immune from liability.
So it is necessary to consider this point, although it does not directly
arise in the present appeal. If there was at one time a supposed rule
that the doctrine of Donoghue v. Stevenson [1932] A.C. 562 did not
apply to realty, there is no doubt under modern authority that a "
builder of defective premises may be liable in negligence to persons
who thereby suffer injury . . . "
So far, Lord Wilberforce has agreed that it would be unreasonable to
impose liability for defective foundations on a council if the builder were
immune. Then Lord Wilberforce goes on to say, at pp. 1038-1039:
"But leaving aside such cases as arise between contracting parties,
when the terms of the contract have to be considered . . . I am unable
to understand why this principle or proposition should prevent
 571
1 Q.B. Batty v. Metropolitan Realisations Ltd. (C.A.) Megaw L.J.
recovery in a suitable case by a person, who had subsequently
"• acquired the house, upon the principle of Donoghue V. Stevenson:
the same rules should apply to all careless acts of a builder: whether
he happens also to own the land or not. I agree generally with the
conclusions of Lord Denning M.R. on this point in Dutton V. Bognor
Regis Urban District Council [1972] 1 Q.B. 373, 392-394. In the
alternative, since it is the duty of the builder (owner or not) to comply
B with the byelaws, I would be of opinion that an action could be
brought against him, in effect, for breach of statutory duty by any
person for whose benefit or protection the byelaw was made. So I
do not think that there is any basis here for arguing from a supposed
immunity of the builder to immunity of the council . . ."
The argument that the local authority should not be liable because it
Q would be unreasonable that it should be held liable when the builder was
not held liable was rejected, because Lord Wilberforce sees no reason
why the builder should not be held liable. True, he specifically refers to a
case where there was a breach of statutory duty—non-compliance with the
Building Regulations. But that was the particular question arising in
that case. I see no logical or practical reason for so confining it; nor, in
my view, did Lord Wilberforce so intend.
D As to the question of the nature of the damage which gives rise to the
cause of action, it seems to me that an answer given by Mr. Hytner was a
simple and full answer. If it indeed is necessary that it should be shown
that there has been physical damage to the property before the action will
lie against the builder, in the present case there was physical damage to the
property in the landslide, or landslip, of 1974. True, the foundations of
j , the house for the time being remained undisturbed. True, the bricks and
mortar of the house, as the judge has found, remained undamaged. But
there was physical damage to the garden—a part of the property conveyed.
If physical damage be necessary in order to found the action, there was
physical damage. But, apart from what might be regarded as that possibly
accidental element here, there is, I think, a wider reason why Mr. Collins's
proposition should not succeed on the facts of this case.
F Again I refer to the speech of Lord Wilberforce in Anns v. Merton
London Borough Council [1977] 2 W.L.R. 1024. Lord Wilberforce is
dealing with the question " When does the cause of action arise? "; and
he uses this sentence, at p. 1039:
" It can only arise when the state of the building is such that there is
present or imminent danger to the health or safety of persons occupy-
G ing i t . . . "
Was there not here imminent danger to the health or safety of persons
occupying this house, at the time when the action was brought? Indeed,
Mrs. Batty, one of the plaintiffs, has been awarded damages for the
consequences to her health and peace of mind of the foreseen disaster.
Why should this not be treated as being a case of imminent danger to the
JJ safety and health of people occupying the house? No one knows, or can
say with certainty—not even the greatest expert—whether the foundations
of the house will move and the house perhaps suddenly tumble tomorrow,
or in a year's time, or in three years' time, or in 10 years' time. The law,
572
Megaw LJ. Batty v. Metropolitan Realisations Ltd. (C.A.) [1978]
in my judgment, is not so foolish as to say that a cause of action against
the builder does not arise in those circumstances because there is no
imminent danger. I would reject that submission.
Mr. Collins's fifth submission is one that goes to the facts. It is this.
In any event the state of the terrain was not such as to render it careless
for the second defendants not to require further investigation prior to the
commencement of the building. Mr. Collins has properly taken us to
passages in the evidence, in addition to the passages to which we had B
been referred by Mr. Brown for the first defendants, going to this question
as to what would have been seen on the site and the neighbourhood of the
site at the relevant time before building started, and as to the evidence as
to what that ought to have conveyed to a reasonably careful builder observ-
ing those symptoms. Once again, I do not propose to go into the evidence
on those matters, helpful though counsel's references to it were. I
am quite satisfied that on the evidence the judge was right in his finding c
that the symptoms were such that investigation was called for by a reason-
ably careful builder, and that if the investigation which was called for
by reason of those symptoms had been made the house would not have
been built.
The sixth and last of Mr. Collins's submissions is this. The plaintiffs'
house has not suffered damage and is not in such a state as to produce £>
present or imminent danger to the plaintiffs' health or safety. Mr.
Collins made it clear that he was not challenging the judge's finding that
the house was likely to be engulfed or the judge's finding that it is now
valueless. This is really related to the fourth submission, with which I
have already dealt, and in that I have said all that I think it is necessary
to say and all that I am minded to say referring to this proposition.
I would therefore dismiss the appeals of the first and second defendants; "
and, by reference to the plaintiffs' cross-notice, I would direct that judgment
be entered for the plaintiffs against the first defendants for liability in tort
as well as for liability in contract.
BRIDGE L.J. I fully agree; and I add only a very short postscript to
the passage in Megaw L.J.'s judgment dealing with Mr. Collins's fourth p
submission. Amongst the propositions enunciated by Mr. Collins in sup-
port of his argument that the damage claimed by the plaintiffs in this case
was of a nature irrecoverable against the second defendants was the con-
tention that a party liable for negligence of the Donoghue v. Stevenson
variety is liable only for damage consequential upon having put into
circulation the dangerous article which foreseeably was likely to cause
injury and not for the loss of the value of that article itself. He relied in G
particular on a passage from the judgment of Stamp L.J. in Dutton v.
Bognor Regis Urban District Council [1972] 1 Q.B. 373, 415 from which
Megaw LJ. has quoted, where the point is succinctly put at an earlier
page. Stamp L.J. said, at p. 414:
" It is pointed out that in the past a distinction has been drawn between
constructing a dangerous article and constructing one which is defec- JJ
tive or of inferior quality. I may be liable to one who purchases
in the market a bottle of ginger beer which I have carelessly manu-
factured and which is dangerous and causes injury to person or
 573
1 Q.B. Batty v. Metropolitan Realisations Ltd. (C.A.) Bridge LJ.
property; but it is not the law that I am liable to him for the loss he
A
suffers because what is found inside the bottle and for which he has
paid money is not ginger beer but water..."
So it is argued here that whilst, if the defective house fell down and
physically injured the plaintiffs, or indeed anyone else, that would impose
a Donoghue v. Stevenson liability on the second defendants, the
fact that the house itself has become valueless, and indeed
incapable of repair at economic cost, is not a loss which the plaintiff can
recover from the second defendants. This argument, to my mind, like the
other arguments to which Megaw L.J. has adverted, is really untenable, in
the light of the speech of Lord Wilberforce in Anns v. Merton London
Borough Council [1977] 2 W.L.R. 1024—with which, as I understand it,
all the rest of their Lordships agreed. As Megaw LJ. has pointed out,
C Lord Wilberforce, at p. 1038, expresses his agreement with the view which
had been indicated by the Court of Appeal that it would be unreasonable
to impose liability upon the local authority if the builder whose primary
fault had caused the defect in the building was to be immune from
liability. At p. 1039 he is considering what damages are recoverable
against the local authority. In the context of what he had said at p.
1038, in principle what he says at p. 1039 must equally be applicable to
D the question what damages are, in the Donoghue v. Stevenson situation,
recoverable from the builder. Lord Wilberforce, at p. 1039, says in
terms:
" Subject always to adequate proof of causation, these damages may
include damages for personal injury and damage to property. In
my opinion they may also include damage to the dwelling house
E itself..."
In my judgment that sets at rest the doubts raised by the judgment of
Stamp LJ. in Dutton v. Bognor Regis Urban District Council [1972] 1
Q.B. 373, 415.
I agree, for all the reasons given by Megaw L J., that the appeals should
be dismissed, and the cross-notice allowed as he indicated.
F
WALLER L J. I agree with both judgments which have been delivered,
and do not desire to add anything to them.
Appeal dismissed with costs.
Cross-notice allowed with costs
against first defendants.
® Judgment to be entered for plaintiffs
against first defendants for liability
in tort as well as in contract.
First defendants awarded 50/50 con-
tribution as against second defen-
dants.
JJ Liberty to apply to Court of Appeal.

Solicitors: Tobin & Co.; Bannister, Preston & Ormerod, Manchester;

Gregory, Rowcliffe & Co. for Whiteside & Lord, Rawtenstall.
Q.B. 1978—20