COMMENTS

COMMENTAIRES

Governmental Liability, the Tort of Negligence and the

House of Lords decision in Anns v. Merton London
Borough Council

In Dutton v. Bognor Regis Urban District Councip the English

Court of Appeal held that a local authority, exercising a power
under its own byelaws to inspect the foundations of a house, owed
a duty of care in negligence to the second purchaser of the house.
Moreover, the authority, through its inspector, had acted negligent-
ly and the plaintiff was entitled to damages for her loss.
The byelaw in question concerned the standard of foundation
work and had been made under a power conferred on specified
local authorities by the Public Health Act, 1936l a which also cast
on them the general duty of implementing the Act. Under the bye-
law, the builder was compelled to notify the local authority before
covering up foundation work and the latter had the power to inspect
those foundations to see that they complied with the standard
prescribed by the byelaws. In Dutton2 , the defendant had in fact
carried out an inspection but its inspector negligently failed to
notice that the foundations were laid on an old and disused rubbish
tip. He passed the construction as did the authority's surveyor
at the damp-course level and the house progressed to completion.
The first purchaser of the house sold it within a year to the plaintiff
and over the next few years it started to slip badly with gaping
cracks and distorted woodwork appearing.
The Dutton decision stands as a landmark in the area of govern-
mental liability and the principles there laid down have come under
judicial scrutiny again, this time by the House of Lords in Anns v.
Merton London Borough Council.3 The plaintiffs leased flats and
maisonettes under 999-year leases in a single block development in
Wimbledon. They alleged that various structural movements in the

1 [1972] 1 Q.B. 373.

1a26 Geo. V & 1 Edw. VIII, c.49, s.1 (U.K.).
2 Supra,
note 1.
3 [19771 2 W.L.R. 1024 (H.L.).
 McGILL LAW JOURNAL [Vol. 24

building were attributable to the builder's negligence in providing

inadequate foundations. The foundations were thirty inches deep
whereas the builder's plans, deposited with the local authority,
showed that the foundations were to have been taken down to thirty-
six inches. In correspondence with the lessees, the local authority
assured them that an inspection of the foundations must have been
carried out but that it was unable to trace any record of this. The
lessees brought an action against the local authority for its
negligence ... in allowing the first defendants [the builder] to construct
the said dwelling house upon foundations which were only 2 feet 6 inches
deep instead of 3 feet or deeper as required by the said plans, alter-
natively of failing to carry out the necessary inspections sufficiently
carefully or at all....4
The authority decided to contest the existence of a duty of care
and the matter reached the House of Lords on a preliminary
point of law in the following terms:
1. Whether the defendant council was under: (a) a duty of care to the
plaintiffs to carry out an inspection of the foundations (which did not
arise in Dutton's case); (b) a duty, if any inspection was made, to take
reasonable care to see that the byelaws were complied with (as held in
Dutton's case); (c) any other duty including a duty to ensure that the
building was constructed in accordance with the plans, or not to allow
the builder to construct the dwelling house upon foundations which were
only 2 feet 6 inches deep instead of 3 feet or deeper....6
In addition, a limitation of actions problem arose. A majority
of the House (Lords Wilberforce, Diplock, Simon and Russell) held
that, on the plaintiffs' allegations, the local authority owed them a
duty of care if there had been an inspection, and would owe them a
duty to inspect, so as to ensure compliance with the byelaws,
provided any failure to inspect was not the product of a genuine
discretionary decision as to the making of inspections. It did not
matter whether an individual plaintiff was the first lessee of the
flat or took it under an assignment; he was still within the contemp-
lation of the authority's inspector. Lord Salmon, dissenting in part,
concluded that the authority owed a duty of care to the plaintiffs
only if there had actually been an inspection of the foundations.

The duty of care and omissions

When a local authority inspector passes bad foundation work,

and thereby allows the builder-to proceed to the next stage, has he
carried out his task of inspection negligently, or has he negligently

4 Ibid., 1030.
5 Ibid., 1031.
19783 COMMENTS - COMMENTAIRES

failed to prevent the builder from continuing the development?

Before Dutton this was important because of the House of Lords
decision in East Suffolk Rivers Catchment Board v. Kent.0 In
that case, a high tide broke through an embankment wall and flood-
ed the plaintiffs' land. The Board had sent an inexperienced man
with a gang of unskilled labourers whose efforts to repair the
breach were wholly inadequate. Instead of the fourteen days which
competent men would have taken, one hundred and seventy-eight
days passed before the embankment was repaired. A majority"a
of the House of Lords held that there was no liability. They were
particularly impressed by the fact that since the tide had already
broken through, the appellant's efforts merely failed to abate a
disaster which had already occurred. The case is perhaps best
regarded as an authority on causation, for how could the appellants
be liable for damage which already had occurred when the tide
broke through the embankment. Perhaps surprisingly, it was not
argued that the respondents had relied on the appellant's interven-
tion so as not to turn elsewhere for help.
On its facts, Dutton was clearly distinguishable from East
Suffolk. When the local authority inspected the foundations, the
plaintiff had suffered no damage. At that stage, the foundations
being merely potentially perilous to future purchasers, no one had
suffered harm. Moreover, from the viewpoint of causation, the local
authority's control over the situation far exceeded that of the
Board in the East Suffolk case. The Board could be no more suc-
cessful than Canute in commanding the sea to recede, but the
building of the house above its foundations could be stayed by
the local authority's injunction. In the graphic language of Stamp
L.J. in Dutton, the local authority gave the builder the "green light"
to proceed with the house when its inspector certified the foun-
dations as soundb
Even though Dutton could be distinguished from the East Suf-
folk case, it is questionable whether the local authority committed
a positive act or rather was guilty of an omission. The dividing line
between the two is difficult to draw and the vague middle-ground
lends itself to tendentious reasoning. In Dutton, Sachs L.J. did not
doubt that the passing of the foundations was a positive act.7

6 [1941] A.C. 74 (H.L.).

Ga The majority consisted of Viscount Simon L.C., Lord Thankerton, Lord
Romer and Lord Porter. Lord Atkin dissented.
6b Supra, note 1, 409.
7Ibid., 403.
 McGILL LAW JOURNAL [Vol. 24

Stamp L.J., by the tenor of his judgment, suggests that the local
authority, by giving the "green light" to the builder, failed to pre-
vent future damage being done. However the Court of Appeal may
have characterised the defendant's behaviour, the important point
is that the case signifies that, in this area of liability at least,
judicial debate would no longer be distracted from the main theme
of proximity by the argument that the common law recognises
no duty of care in respect of omissions.
If the local authority in Anns had inspected the foundations,
which at this stage the plaintiffs had not proved, its liability would
have been four-square with that of the authority in Dutton. Indeed,
the London Borough of Merton was challenging the correctness of
Dutton in the House of Lords. Their Lordships, however, were un-
animous in holding that Dutton was rightly decided.8 Anns, there-
fore, establishes beyond all doubt that a local authority, subject to
the matter of discretion,9 owes a duty of care to prospective pur-
chasers when inspecting the foundations of a building. The class of
persons to whom the duty is owed is not as infinite as might appear,
since the nature of the builder's negligence is such as to assert itself
quite soon after the commission of the negligent act. The limitation
period will afford some protection and people who buy a tumble-
down house, which they know or should have realized was so, will
receive scant judicial sympathy.
Where the Anns decision does depart from the law established
by Dutton is in the liability of a local authority which fails to carry
out any inspection at all. The common law has been notoriously
slow to impose a duty to take positive action, even when abstention
is detrimental to another party. It has also been loath to infer
the existence of a causal connection between an omission and
another party's loss. The majority of their Lordships held that,
assuming no inspection had been carried out, the local authority
could owe a duty of care to the plaintiffs to carry out an inspection.
Whether it did owe a duty would depend on whether the failure to
inspect was protected by the existence of a discretionary decision
not to inspect. 10 In imposing a duty to take positive action, even
one limited in this way, the decision is innovative. It is exceedingly

8Supra, note 3. See Lord Wilberforce, with whom Lords Simon, Diplock and
Russell concurred, ibid., 1040, and Lord Salmon, ibid., 1042.
9Infra, p.286.
10 Supra, note 3, 1035 per Lord Wilberforce: "Thus, to say that councils are
under no duty to inspect, is not a sufficient statement of the position. They
are under a duty to give proper consideration to the question whether they
should inspect or not."
19781 COMMENTS - COMMENTAIRES

difficult to translate this omission into positive misconduct. We

cannot say that the local authority carried out an inspection of the
plaintiffs' maisonettes badly, unless perhaps the failure to inspect
the foundations was part of a more general inspection of the
maisonettes, part of which had been carried out. Nor can we say
that the local authority's general supervision of building standards
in its area was performed defectively, because the plaintiffs must
rely on a duty of care owed to them as individuals and cannot build
on a duty owed to others. Moreover, there is no significant anteced-
ent relationship between the local authority and the plaintiffs estab-
lishing the latter as dependents of the former, and into which one
can imply a -duty to take positive 'action." By being obliged to
inspect, the local authority is thus compelled to "rescue" the
plaintiffs from the position into which the builder has put them,
although the authority will not benefit from the latitude that the
courts would probably extend to different types of rescuers as
they carried out their works of mercy. Admittedly, while the plain-
tiffs' position at the time of the failure to inspect is one of potential
rather than actual peril, the builder has already behaved culpably.
In a partial dissent, Lord Salmon was not prepared to impose
on the local authority a positive duty to inspect the foundations,
even where negligence was suspected, because the statute itself had
imposed none;' 3 the implication being that the imposition of such
a duty would usurp Parliament's function. He considered it un-
likely that an authority would act so irresponsibly as to decide not
to carry out any -inspections but thought that such a decision could
be quashed by a prerogative order of certiorari or mandamus.14
Putting aside the difficulty that this hypothetical failure to inspect
might not have stemmed from a general decision, such order would
afford no real remedy at all to the plaintiffs in the present case.
It is hard to see the sense in denying a remedy where the failure to
inspect has been isolated and unconsidered, when the victim of a
negligent inspection can recover substantial damages.
The problem of a causal link between the failure to inspect
and the plaintiffs' injury 'did not trouble their Lordships. In Dutton,
the Court of Appeal had rejected the argument of the local
authority that the plaintiff ought not to recover since it could not
be said that she had relied on the local authority's inspection of the

"Cf. R. v. Instan [1893] 1 Q.B. 450.

12 Cf. the majority in Horsley v. MacLaren [1972] S.C.R. 441.

13 Supra, note 3, 1041.

14 Ibid., 1041-42.
 McGILL LAW JOURNAL (Vol. 24

foundations. The authority was made liable, not because it induced

the plaintiff to buy the house, but because it failed to prevent the
house from coming on to the market. This argument and other
causation arguments are absent from Anns. Strictly, the existence
of a causal link might be regarded as a question 'of fact anyway
and therefore outside the functions of a court ruling on a pre-
liminary point of law. Nevertheless, in the area of causation it is
particularly difficult to separate neatly questions of fact and law.
The House of Lords in East Suffolk and the Court of Appeal in
Dutton devoted considerable attention to causation.

Governmental liability and the classification of governmental

functions

It is the way adopted by the majority of their Lordships, for

mapping out the area of potential liability of governmental bodies,
especially with regard to omissions, in which the Anns decision is
most significant. Before this could be done, it was necessary to
consider the classification of governmental functions.
The traditional division is into duties and powers, the significance
of which was explained by Lord Denning in Dutton in the following
terms (although he himself favoured modifying the scheme):
Much discussion took place before us as to whether the council were
under a duty to examine the foundations or had only a power to do
so.... The argument was that if the local authority had a mere power
to examine the foundations, they were not liable for not exercising that
power. But if they were under a duty to do so, they would be liable for
not doing it.15
As we shall see, this rather simple argument no longer has any
force. Furthermore, it is fundamentally unsound in that it appears
to confuse an ordinary action in negligence with the civil action
for breach of a statutory duty. As far as the latter action' goes,
the distinction between acts and omissions has never posed prob-
lems. An employer who neglects to fence a machine will not succeed
with the argument that his injured employee is seeking to hold
him liable for a mere omission. Nor are too many problems of
causation posed, since, just like the inspector who can prevent
a building from being taken up beyorid the foundations, the em-
ployer has extensive control over the machine. On the other hand,
a failure to comply with a statutory duty is tantamount to a breach
of the common law duty of care, with the important reservation that

15
Supra, note 1, 391.
19781 COMMENTS - COMMENTAIRES

not all statutory duties are capable of giving rise to the special
action for breach of statutory duty.16 It therefore follows that no
such special action can lie where a mere power is conferred because
Parliament has laid down no statutory standard.
It is one thing to assert this, but quite another to say that the
classification of a function as a power prevents the inference of an
ordinary duty of care in negligence. A major contribution of the
Anns and Dutton cases is that they have exposed the fallacy that the
dividing line between public duties and powers is identical to that
between cases where a common law duty of care in negligence does
and does not exist. This may be compared to the overthrow, by the
House of Lords in Donoghue v. Stevenson,17 of the rather different
privity of contract fallacy whereby liability to one's contracting
partner in contract was considered to rule out liability in tort in
respect of the same act to a third party.'
The question then arises, where exactly do we draw the line
as regards the existence of a duty of care and does the power/duty
distinction provide any assistance at all in the matter? Lord Denning
in the Dutton case was all for introducing a third term, "control",
alongside the public duty and the public power. 9 He did not make
it clear how "control" fitted in with the other two, but we can
assume it must have overlapped them considerably. Whilst the idea
of control may be useful in establishing whether a local authority
or other governmental body's act or omission has causal signifi-
cance, it does not really help us to decide the difficult question
whether the plaintiff should be owed a duty of care in the first place.
The majority in Anns rejected it for the purpose of the duty of care
because it suggested a theory of liability wider than that acceptable
to the Court, taking no account of the protective wall of the body's
discretion. 0
In what circumstances, therefore, will a governmental body be
liable in respect of the exercise of, or failure to exercise, an adminis-
trative power or duty? To begin with, it is necessary to consider
10 The test of Parliament's intention to afford a civil remedy, as applied in
the past, has been fictitious and self-contradicting in its application. There
is a growing tendency, however, for statutes actually to say whether a civil
remedy is or is not available. See, e.g., The Health and Safety At Work Act,
1974, c.37, s.47 (U.K.) (no civil action); and The Consumer Credit Act, 1974,
c.39, s.72(11) (U.K.) (actionable as a breach of statutory duty).
17 [1932] A.C. 562 (H.L.).
18 See, e.g., Winterbottom v. Wright (1842) 10 M. & W. 109, 152 E.R. 402.
19 Supra, note 1, 391-92.
20
Supra, note 3, 1034.
 McGILL LAW JOURNAL [Vol. 24

whether there is a "sufficient relationship of proximity or neigh-

bourhood" 21 between it and the injured party, to make it reason-
ably foreseeable that damage to the latter will result from its
carelessness. Should this be so, a "prima facie duty of care arises". 22
Two interesting points are raised here. First, Lord Wilberforce
speaks of "damage" 2 and the context makes it clear that he is
referring not just to physical but also to economic loss. 24 As we
shall see, the dividing line is not always easy to draw. Nevertheless,
if foreseeability of economic loss does create a prima facie duty of
care, (and his Lordship cites Hedley Byrne v. Hellerr,in favour of
this broad proposition), then the law on economic loss has moved a
considerable way in favour of the plaintiff in the last dozen or so
years. The other point concerns the meaning of a "prima facie duty
of care". This suggests that once the plaintiff establishes a relation-
ship of proximity with the defendant, the onus then passes to the
defendant to point to considerations justifying the limiting or
negativing of this duty of care. At the very best, it would make
no-duty cases a clear exception to the norm. As illustrations of such
cases, Lord Wilberforce cites Hedley Byrne (negligent misstatement
causing economic loss) and Weller v. Foot and Mouth Disease
Research Institute25a (economic loss). It is apparent too that such

21 Ibid., 1032.
22 Ibid.

23Ibid.
24Ibid. The passage is a crucial one:
"Through the trilogy of cases in this House - Donoghue v. Stevenson
[1932] A.C. 562, Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1964] A.C.
465, and Dorset Yacht Co. Ltd. v. Home Office [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 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 it is owed or the
damages to which a breach of it may give rise: see Dorset Yacht case [1970]
A.C. 1004, per Lord Reid at p.1027... and Weller and Co. v. Foot and Mouth
Disease Research Institute [1966] 1 Q.B. 569; and ... cases about 'economic
loss'
25 ...
Supra, note 24.
25a [1965] 3 W.L.R. 1082, 3 All. E.R. 560 (Q.B.).
19781 COMMENTS - COMMENTAIRES

considerations exist in the case of a body exercising governmental

funotions b Both points reveal the enormous impact of the decision
on the general tort of negligence. It is now established beyond
peradventure that there is a single, homogeneous tort known as
"Negligence" rather than a collection of closely related instances of
liability linked by a common theme. This may indeed turn out to
be the enduring legacy of the decision - that it puts the seal on a
process substantially launched forty-five years earlier by the same
court in the great case of Donoghue v. Stevenson.26
To return to the liability of governmental bodies and the crux
of the Anns decision itself, there will be no liability if the body
is operating behind the wall of an administrative discretion or
policy. The Court draws a distinction between the taking of
policy decisions and their practical execution (the "operational
area" of the discretion),27 In the former case, the body will be
protected from liability, in the latter it will not be. Exactly where
the line is to be drawn is not easy to see. Indeed, Lord Wilberforce
speaks of the difference as "probably a distinction of degree."2 It
does seem, however, correct to say that the further one gets from
the central government, the more likely it is that the governmental
body will be caught by the duty of care. Perhaps this is only another
way of saying that such bodies are more likely to be operating under
public duties than are organs of the central government. Whilst
Anns does not say so explicitly, it seems unlikely that a body which
fails to comply with a public duty will be protected behind the
discretionary wall.
Another point to consider is this: a governmental body may well
have a general statutory power to enact byelaws conferring on itself
more specific powers. To take a hypothetical example, it may have
a statutory power to scrutinise the standard of private swimming-
pools. To that end it might pass byelaws conferring on itself the
power to examine the drainage system or the water-filtering process,
or the power to demand child-safety precautions. The specific
powers are clearly more "operational" than the general power and
therefore are more likely to support a duty of care in negligence.
Perhaps one can make the generalization that the more specific a
power is, the less likely its exercise or non-exercise will lie behind
the discretionary wall.

25b But see infra, p.287.

26 Supra, note 24.
27Supra, note 3, 1034.
2sIbid.
 McGILL LAW JOURNAL (Vol. 24

It might be helpful too, when considering a governmental body's

liability in respect of a power, to consider the following seven
situations.
(i) The body makes no decision whether to exercise the power
and in fact does not exercise it.
The body is protected provided that the action taken (or not
taken) was "within the limits of a discretion bona fide exercised. 20
Otherwise, reasonable foreseeability raises a duty of care and an
ordinary negligence action ensues.
Home Office v. Dorset Yacht20 is of some assistance in under-
standing the meaning of a bona fide exercise of an administrative
discretion. Lord Diplock thought that the proper test to apply here
was that of ultra vires, at least where debate concerned the means
to be adopted to achieve a public purpose.3 1 That case concerned
Borstal boys who escaped from supervision at night because their
guards, in breach of regulations, failed to keep an eye on them.
His Lordship thought that the breach of regulations necessarily
entailed the commission by the officers of an ultra vires act 2 If,
however, the boys had escaped because of a loose system of super-
vision carried out by officers in compliance with instructions, the
position would have been quite different. There could be liability
in negligence only if no reasonable person could have entertained
the bona fide belief that the boys would be benefitted by this system
of supervision.! The same point is made by Lord Reid in a more
general way when he says that immunity within the discretionary
wall exists only if "the person entrusted with discretion either un-
reasonably failed to carry out his duty to consider the matter or
reached a conclusion so unreasonable as again to show failure to do
his duty..."!4 Lord Reid, nevertheless, might be a little more
generous to an aggrieved plaintiff than Lord Diplock. The latter saw
the commission of an ultravires act as a condition precedent to civil
liability and he seems to have thought that, provided the benefit of
the boys was attained to some extent, the risk to outsiders posed
by the loose system of supervision could be disregarded. Lord Reid's
more general formulation would allow some kind of balance to be
struck between the interests of the boys and people put at risk.
Although their Lordships speak of unreasonable governmental
29 Ibid., 1035.
30 Supra, note 24.
31 Ibid., 1067-68.
S2 Ibid., 1070.
33Ibid., 1068.
34 Ibid., 1031.
19783 COMMENTS - COMMENTAIRES

behaviour as a prerequisite to civil liability, it is almost as if the

behaviour of the governmental body is being measured by a special
standard of care, one that is much less demanding than the standard
which would be exacted on the other side of the discretionary wall.
The same approach is apparent in Anns where Lord Wilberforce
states that local authorities "are under a duty to give proper consider-
ation to the question whether they would inspect or not." 5 This sug-
gests that the obligation to consider precedes the duty of care in neg-
ligence, although the effect of this seems to be the subjection of the
local authority to a less exacting standard than the ordinary one of
reasonable care.
Given the use of words like "proper" and "unreasonable" in the
definition of a governmental body's protective discretion, it is pro-
per to speculate on the durability of the discretionary wall, and to
wonder how long it will be before negligence will entirely supplant
ultra vires, to use Lord Diplock's language,3 6 as the test of the civil
liability of governmental bodies.

(ii) The body makes a general decision to exercise the power but
unaccountably fails to exercise it on the instant occasion.
This appears to be the position in Anns itself, if one assumes that
no inspection was in fact carried out. The failure to inspect is
clearly not based on a discretionary decision not to do so and,
reasonable foreseeability having been established, there exists a
duty of care in negligence.

(iii) The body makes a general decision to exercise the power but
decides not to exercise it on the instant occasion.
Liability here would depend on why the authority chose not to
inspect. If this were an isolated occurrence, it would be difficult
to regard this as the proper exercise of a discretion. Indeed, it is
hard to see an isolated act or occurrence ever being the product
of a genuine policy decision.

(iv) The body makes a general decision to exercise the power

selectively and in accordance with this decision the power is
not exercised on the instant occasion.
This bears much more resemblance to a policy decision; thus
the governmental body is more likely to be protected in this case
than in the previous three.

35
36
Supra, note 3, 1035.
In Dorset Yacht, supra, note 24, 1067-68.
 McGILL LAW JOURNAL [Vol. 24

The most likely reason for taking such a decision is an economic

one. Lord Wilberforce, echoing du Parcq L.J.'s dissent in the Court
of Appeal in East Suffolk, 3 stated that "public authorities have
to strike a balance between the claims of efficiency and thrift" 37
and this suggests that the courts will look sympathetically at an
argument based on the need to trim public spending.
If, for example, local authorities decided that builders' work
could be examined only on a random basis for this reason, there
would surely be no duty of care owed to purchasers of buildings
that had not been inspected. This would mean, of course, that some
purchasers would be better protected in the event of buying a
tumbledown house than others. If, too, an authority decided to
spread its resources by examining in alternate weeks the work of
builders whose names, for example, began in the ranges A-M and
N-Z, then it would probably be immune from a suit in negligence.
An interesting question would arise if the authority discovered, or
should have discovered, that builders were taking advantage of the
predictable workings of its system to pass off shoddy work. If
liability were to be imposed, it would not be for the decision to
inspect selectively but because the policy could have been carried
out by a more efficacious procedure. Providing the system could
be amended so as not to prejudice its policy objectives, it is sub-
mitted that adherence to its system by the authority in these
circumstances should be treated as a decision which no reasonable
man could possibly have taken, at least when the authority has
actual knowledge of the abuses of the system. Likewise, there
should be no protection for those authorities which arbitrarily
decide to inspect the work of some builders but not others.
Similar conclusions would be presented in the case of an
authority which, desiring to save energy and money, lit its streets
selectively. It would surely be reasonable to phase out individual
lights alternately (although perhaps not in notorious accident areas)
and surely unreasonable to black out, indefinitely, entire areas if
other areas were left lit. Of course, the economic crisis might be so
severe as to make drastic measures a reasonable exercise of the
discretion, for example, putting out all street lights in order to keep
the power going in hospitals.
Enough has been said, it is hoped, to show that since the Dorset
Yacht and Anns decisions the courts will have to bear an extremely
sensitive burden in this area of governmental liability.

36a [1940] 1 K.B. 319, 338.

7 Supra, note 3, 1034.
19783 COMMENTS - COMMENTAIRES

(v) The body makes a general decision to exercise the power and
subsequently a conscious decision to cease doing so or do so
selectively.
This suggests the facts of Sheppard v. Borough of Glossor 8
where the defendant authority, for reasons of economy, decided
that gas lights in the borough should be extinguished as soon as
possible after nine p.m. each night. At eleven-thirty p.m. on Christ-
mas night the plaintiff, having left the house of a friend, missed
his way in the dark and fell from an embankment into the road
below. The decision finding the local authority not liable was upheld
in Anns. Nevertheless, the scope of the decision should be examined.
The light in question was positioned on a retaining wall. If it had
been in the highway, in such a position as to cause an obstruction,
or if there had been some other obstruction in the highway,
Scrutton L.J. considered the authority would have had to warn
passers-by in some way.39 As Atkin L.J. put it in the same case, the
authority did not cause the danger for the danger was already in
existence.O It must therefore be said that, in cases of this kind at
least, even a decision which clearly seems to be policy-based may
not suffice to protect the authority from liability. Perhaps this
conclusion can be harmonized with Anns and Dorset Yacht by
saying that, the authority having created the danger, it would be an
entirely unreasonable exercise of its discretion for the authority
to take steps which would conceal the danger.

(vi) The body makes a general decision never to exercise the

power.
It is again likely that the very generality of the decision would
protect the authority from liability. Nevertheless, an authority
which took or adhered to such a decision, despite abundant evidence
that its intervention was urgently required, might well be guilty
of a totally unreasonable exercise of its discretion.

(vii) Whilst exercising its power, the body acts negligently.

To some extent, this is the most difficult of the hypotheses. It
represents what happened in Dutton and may well have happened
too in Anns. The difficulty is posed by the East Suffolk case. In
that case, the significance of the Board's guilt for a mere omission in

38 [1921] 3 K.B. 132.

39 Ibid., 144.
40 Ibid., 150.
 McGILL LAW JOURNAL [Vol. 24

failing to repair damage already done must be taken to have

disappeared with Dutton and Anns. As for causation, the argument
that the Board did not cause the loss would be unlikely to succeed
today. Dutton and Anns suggest that the proper question to ask is
not, "Did the Board cause the loss?" but rather, "Did the Board
permit, or not prevent, the loss?". 41 In answering this question, the
argument that the damage occurred when the sea flooded the land
would be just as unsatisfactory as holding that the damage could be
divided up equally between all the days when the land was flooded.
Lord Atkin's dissenting speech in East Suffolk shows that the
plaintiffs would have had to be much more particular in their
proof than that.4 2
The real difficulty posed by East Suffolk stems from Lord
Wilberforce's opinion in Anns that the East Suffolk decision could
be justified on the ground that the Board's behaviour was "still
well within a discretionary area."43 Admittedly, he spoke of the
distinction between taking and executing policy decisions as one
of degree," but even so the decision is surely hard to support
after Anns.
The catchment board had been given, by statute, extensive con-
trol over river banks in its area. It declined to contract the work
out to an experienced man who had done such work before the
creation of the statutory scheme.
Instead, the work was entrusted to an employee with very
limited experience working with a few totally inexperienced casual
labourers. Their work was, in the words of MacKinnon L.J. in the
Court of Appeal-, "entirely incompetent".' 5 If a board with limited
resources has to spread these thinly in the event of a disaster, it
ought not to be held liable in negligence if damage occurs solely
because insufficient resources were devoted to the work at hand.
The allocation of limited resources is based on a decision taken
behind the discretionary wall. A board, nevertheless, ought not to
be excused from compliance with a duty of care when the damage
flows from the incompetence of its employees on the job, especially
when a reasonable alternative method was available. Otherwise,
an authority which paid low wages and so attracted the naturally
incompetent might be protected from liability on the argument that

41
42
Hart and HonorS, Causation in the Law (1959), 132.
See
Supra, note 6, 93-94.
"Supra, note 3, 1036.
4Ibid., 1034.
46
Supra, note 36a, 331.
19783 COMMENTS - COMMENTAIRES

nothing more could be expected when such limited resources were

deployed. The position here is clearly distinguishable from a situa-
tion where damage occurs or is worse because insufficient men
or the best machinery were not available.
From these seven situations, it should be clear that mapping out
the boundaries of a governmental body's discretion will be difficult
and perhaps only future case law will serve to clarify matters.
A further matter to be considered is the relationship of the
governmental body's protected discretion to the prima facie duty of
care. At first sight, the existence of a prima facie duty of care in
favour of a plaintiff related to a governmental body by reasonable
foreseeability should cast a burden on the body to point to cir-
cumstances, such as its discretion, which tend to negative or
reduce the scope of the duty. This impression is dispelled when
Lord Wilberforce states that a plaintiff, complaining of a negligent
inspection, "must prove, the burden being on him, that action taken
was not within the limits of a discretion bona fide exercised, 45
before he can begin to rely upon a common law duty of care"; a
to which we might add, even a prima facie duty of care.
This formulation seems -to add yet another wheel to Buckland's
negligence wagon.46 b Whilst it protects the governmental body from
the burden of establishing its protective discretion, it does so at
the expense of Lord Wilbeiforce's earlier generalization of neglig-
ence liability and compels the plaintiff to establish a kind of pre-
duty of care in governmental liability cases. It may be that this
can be avoided by taking account of the protective discretion at the
breach of duty level in the application of the tort of negligence.

Duty of care and its breach

A familiar feature of the tort of negligence is that once the

citadel is stormed and the existence of a duty of care conceded
in a particular type of case, the debate in future moves to other
areas of negligence such as the standard of care. No one doubts
now that manufacturers owe a duty of care to the ultimate con-
sumers of their products. The real question then becomes whether
in the circumstances they are negligent. It is no coincidence that
Grant v. Australian Knitting Mills,40 which is concerned with actual
negligence, followed so close on the heels of Donoghue v. Stevenson.

45a Supra, note 3, 1035.

46b Buckland, The Duty to Take Care (1935) 51 L.Q.R. 637.
46 [1936] A.C. 85 (P.C.).
 McGILL LAW JOURNAL [Vol. 24

Likewise, now that a builder's potential liability in negligence has

been conceded,47 we can expect future decisions to concentrate
on breaches of the duty of care. Much the same will surely happen
once the duty of care in respect of negligent misstatements and
economic loss caused by other means has been finally settled.
Whilst it was once undoubtedly true to say that the duty of care
was owed by one individual to another and that a plaintiff could
not avail himself of a duty owed to someone else, it is probably
now more correct to say that duties are owed to classes of in-
dividuals - consumers, passengers and road-users 48 for example
- and that reasonable foreseeability takes on a more specific
meaning when the question of breach is considered. Certainly, it
would be no defence for a manufacturer to say that the plaintiff did 49
not even exist at the time the injurious product left his factory,
just as it did not matter that the plaintiffs in the Dutton and Anns
cases were persons with no interest in the property at the time of
the inspector's negligence. Breach of the duty of care undoubtedly
took place before the plaintiffs were ascertained as persons to
whom the duty of care was owed. To avoid putting the breach cart
before the duty horse, it has to be said that the local authority
owed a duty of care to purchasers of the property as a class.
When one turns to Anns and sees that a local authority can owe
a duty of care, regardless of omissions, to purchasers of houses
in respect of its control over building work, it seems conceptually
tidier to consider the question of liability within the framework
of breach of the duty of care. The alternative put forward by Lord
Wilberforce, which involves the plaintiff's initial establishment of
an absence of genuine discretion coupled with a prima facie duty
of care, seems more ponderous.
In Dorset Yacht, Lord Pearson, considering the open regime
applied to Borstal boys to encourage their initiative, self-reliance
and responsibility, came to the conclusion that the liability of the
Home Office for their escape should be dealt with in the context
of what the duty of care demanded of them. "They should exercise
such care for the protection of the neighbours and their property as
is consistent with the due carrying out of the Borstal system of
training."-5 It may be that future liability attaching to governmental
bodies ;will take the direction suggested by Lord Pearson though
there is nothing in Lord Wilberforce's speech in Anns to suggest it.

47See Dutton, supra, note 1 and Anns itself, supra, note 3.

48See Haley v. London Electricity Board [1965] A.C. 778 (H.L.).
49 Cf. Watt v. Rama [1972] V.R. 353 per Gillaird J.
5
OSupra, note 24, 1056.
1978] COMMENTS - COMMENTAIRES

In England, the issue is not a burning one since a jury is most

unlikely to sit in a case of this nature. Nevertheless, it is submitted
that the word "reasonable" is flexible enough to accommodate this
question of policy within the breach of duty category and that such
an approach is more in keeping with the general dynamic of the
tort of negligence.
Another aspect of breach is presented by cases like Dutton and
Ans. In a normal case of negligence, a party will be under a duty
to exercise reasonable care so as to avoid causing injury to the
plaintiff. The House of Lords in Anns, however, was careful not
to oblige local authorities to attain the same kind of goal. The duty
was not to take reasonable care to avoid injury to the plaintiffs, but
to take reasonable care to see that the authority's own byelaws were
complied with. 51 First, the implication of all this is that the content
of the duty can be increased or diminished according to the authori-
ty's own standards as prescribed in its byelaws, although the un-
changing formula of "reasonable care"5 2 is being retained in this as
in other areas of negligence liability. Secondly, the limitation on an
authority's liability by reference to the standards it sets for itself,
is surely only another way of saying that prescribing the content of
the byelaws falls within the authority's discretion, thereby illustrat-
ing the flexibility of the breach of duty category and demonstrating
its ability to take account of matters of policy.

Physical damage or economic loss

Although restrictions on the recovery of damages for economic

loss have been somewhat relaxed in recent years, it cannot yet be
said that we are witnessing their total dismantlement. Distinguish-
ing physical from economic loss may be important for many years
to come.
We have seen that a relationship of proximity between plaintiff
and defendant creates a prima facie duty of care.P The existence
of economic loss, however, is one of those factors which may serve
"to negative, or to reduce or limit the scope of the duty or the
class of person to whom it is owed or the damages to which a breach
of it may give rise", s It is important, therefore, to consider whether

51 Supra, note 3, 1038. See also p. 1035, where Lord Wilberforce justifies
this on the ground that the authority, unlike the builder, is merely performing
a supervisory role.
52 Ibid.
63 See supra, p.284.
54
Supra, note 3, 1032.
 McGILL LAW JOURNAL (Vol. 24

the local authority's liability for passing substandard foundation

work is liability for economic loss.
In Dutton, Mrs Dutton's house was built on a rubbish tip. The
tip had always been there and there was never a time when the
house did not suffer from the effects of being built on it. The
deficiency was implicit in the building of the house. To say that a
thing has been damaged suggests that one can draw a disparaging
comparison between its present and its pristine condition. This
cannot be done with the house because no ideal ever existed against
which its present condition could be compared. To say that Mrs
Dutton could recover for physical injury done to her house would
be tantamount to saying that Mrs Donoghue would have a claim
for the damage done by the snail to the contents of her ginger beer
bottle. Nor would it be satisfactory to say that physical injury
occurred to Mrs Dutton's house because unfavourable comparisons
could be drawn with equivalent houses in the locality. This approach
would allow for the recovery of tortious damages in relation to
claims based on unsatisfied contractual expectations.
Nevertheless, in Dutton, Lord Denning boldly asserts that the
damage done to the house was physical.Y' He does not say why it
is physical but he says enough to show that in some cases the
dividing line between physical and economic loss can cause anoma-
lies. His illustration of the prudent property owner who forestalls
the collapse of his house on a bystandere 6 calls to mind Lord
Devlin's famous hypothetical examples of the two doctors, one of
whom prematurely advises his patient to return to work so that
his physical condition is further impaired while the other dilatorily
advises a return to work so that his patient loses more wages than
was necessary.F Both illustrations argue the case for extending
recovery for economic loss. They do not serve to redefine physical
loss.
Sachs L.J. considered that drawing a distinction between physical
and economic loss in a case of this kind was inappropriate, al-
though he contented himself with the observation that physical
damage "seems to me to have occurred in the present case".58
Stamp L.J. was troubled more by this difficulty than his brethren
and clearly appreciated that ,liability in negligence for Mrs Dutton's
type of loss could not easily be justified if liability in tort was denied
in general for substandard products. He seems to have regarded

55 Supra, note 1, 396.

56 Ibid.
15Hedley Byrne v. Heller, supra, note 24, 517.
58Supra, note 1, 404.
19783 COMMENTS - COMMENTAIRES

Mrs Dutton's loss as economic but nevertheless recoverable because

of the nature of the duty imposed on the local authority. 9
In Anns, Lord Wilberforce considered that the plaintiffs had
suffered physical damage, although again no reasons were given,"
and Lord Salmon seems to have regarded the plaintiffs' loss as
physical.6 - The tenor of their speeches, however, suggests that
the House of Lords considered the distinction between physical and
economic loss unimportant in a case of this kind. Certainly, it was
highly foreseeable that someone would suffer loss if the building
inspector failed to exercise reasonable care to ensure compliance
with the byelaws. Furthermore, the risk presented by the inspector's
negligence was a very precise one. In Dutton, Sachs L.J. had asked
himself this question: "What range of damage is the proper exercise
of the power designed to prevent?" The answer is, specifically, the
acquisition by a purchaser of a substandard house, just as the risk
posed by a house-painter in leaving open a door is the specific one
of theft of the householder's property. 3
The same tendency to play down the distinction between physical
and economic loss in what might be called landslip cases is dis-
cernible in the recent decision of the English Court of Appeal in
Batty v. Metropolitan RealisationsLtd.3a The house in question had
already experienced a landslip in the garden and was doomed to
eventual collapse within several years. Megaw L.J. was of the
opinion 6b that the defendant's argument that he could not be
sued until there was real physical damage to the property was
easily met by the fact that the garden had already suffered in
the landslip. Further, he appears to have .taken his cue from Anns in
finding that the distinction between physical and economic loss has
no application to a case when the purchasers of a tumbledown house
are imperilled by its prospective collapse.
Reasonable foreseeability, therefore, creates a prima facie duty
of care. The defendant is unlikely to be released from such duty
by the fact of economic loss when economic loss is precisely the
risk posed by his negligence, especially when there is a high degree
of probability of harm.-Thus seen, the distinction between physical
harm and economic loss is of diminishing importance and the scant

59 Ibid., 414-15.
60 Supra, note 3, 1039.
61 Ibid., 1050.
62 Supra, note 1,
404.
63 Stansbie v. Troman [1948] 2
K.B. 48.
63a [1978] 2 W.L.R. 500 (C.A.).
63b Ibid., 512.
 McGILL LAW JOURNAL (Vol. 24

attention given to it by the House of Lords in Anns testifies to

that. There does emerge, however, the difficulty foreseen by Stamp
L.J. in Dutton,"4 namely that of the relationship between the implied
terms of quality in a contract of sale and the tort of negligence
in relation to a manufacturer's liability for substandard goods."'

Statute of limitations

The problem here is whether the limitation period runs from the
date that the inspector negligently passes the foundations or from
the date that the purchaser discovers or should have discovered
that something was wrong with the house. Thus stated, there is a
clear connection between this problem and the problem of economic
loss or physical damage. If it is maintained that time runs from
the date when the foundations are certified as sound, it is difficult
to support the proposition that the purchaser suffered physical
damage, for reasons already stated.
In Dutton, however, Lord Denning said that the period of limit-
ation (six years) began to run when the foundations were badly
constructed. 6 Sachs L.J. preferred to express no view although he
was very much aware how closely this problem related to the
problem of the classification of the plaintiff's loss.0 7
There the
matter rested until the decision of the Court of Appeal in Sparham-
Souter v. Town and Country Development 8 which held that the
cause of action accrued only when the plaintiff discovered or should

64Supra, note 1, 414-15.

6-In Rivtow Marine v. Washington Ironworks [1974] S.C.R. 1189, (1973) 40
D.L.R. (3d) 530, the plaintiffs recovered damages from the manufacturers and
from distributors of a crane for loss of profits incurred when the defendants
failed to issue a timely warning that defects in the cranes rendered them
dangerous, with the result that the cranes had to be withdrawn at the height
of the logging season instead of before it. A further claim against the ma-
nufacturer for the cost of repairs to the cranes was rejected by the majority
in the Supreme Court of Canada, which contented itself with Tysoe J.A.'s con-
clusion (in the B.C.C.A.) that the claim was for irrecoverable economic loss.
LaskinJ. (as he then was), in a vigorous dissent on this point, supported
liability for the cost of repairs. This type of claim is strikingly similar to the
plaintiffs' claims in Dutton and Anns. In characterising it as economic loss, it is
submitted that the Supreme Court was correct. The peremptory refusal of
damages is unfortunate, but that Laskin J.'s views might ultimately win the
day is shown by their acceptance by Collier J. in Canadian National Railway
v. 0The
0
Ship "Harry Lundeberg" (1977) 78 D.L.R. (3d) 175 (F.C.C.A.).
GSupra, note 1, 396.
67 Ibid., 405-406.
68 [1976] Q.B. 858.
19783 COMMENTS - COMMENTAIRES

have discovered the damage, Lord Denning recanting on the position

0 9
he had taken in Dutton.
The Court of Appeal in Anns took the same line without further
argument 9a Lord Wilberforce in the House of Lords, however, said
that the cause of action could only arise "when the state of the build-
ing is such that there is present or imminent danger to the health or
safety of persons occupying it" 7 0 This prompts two observations.
First, he is not saying quite the same thing as the court in Sparham-
Souter, adopting a slightly different stance without argument or
criticism of the earlier decision. Nevertheless, there may not be
much difference in practice between the two positions because a
house which presents a danger to health or safety will soon advertise
that fact. Secondly, the way in which his Lordship presents the
matter in terms of potential danger to the health or safety of
occupants is quite revealing. It is almost as if liability arises, not
because of damage done to the house in its own right, but because
there might have been damage of a different kind, namely to the
person of the occupant. We have seen that, in Dutton, Lord Denning
was struck by the unattractiveness of the distinction between the
owner of property who prevented its collapse by taking remedial
measures and the owner who suffered injury when the building
collapsed 71 The strain of maintaining crucial distinctions going to
the existence of liability appears to be telling on the judiciary if
it is so susceptible to arguments of this sort.

Relevance for Canada

As regards the impact of the Anns decision on the general tort

of negligence, it is likely to be influential in Canada. It can be
predicted that it will be invoked frequently in support of reasonable
foreseeability and the prima facie duty of care, almost as a kind of
shorthand description of that principle. Moreover, it has been cited
very recently with approval by the Alberta Supreme Court in
Bowen v. City of Edmontonl1a a governmental liability case. Before
that decision is considered however, it is proposed to assess the
development of governmental liability principles in the years pre-
ceding Anns.

09 Ibid., 868.
e9a Sub.nom. Anns v. Walcroft Property [1976] W.L.R. 512 (C.A.).
7
oSupra, note 3, 1039. This approach was followed in Batty v. Metropolitan
RealisationsLtd, supra, note 63a, 512.
71 Supra, note 1, 396.
71a (1977) 80 D.L.R. (3d) 501 (Alta. S.C.).
 McGILL LAW JOURNAL [Vol. 24

The question of governmental liability has been canvassed in

the United States, particularly in the context of claims against the
Government under the Federal Tort Claims Act 71 b of 1946. In Dale-
hite v. United States,12 the Supreme Court drew a distinction
between the planning and operational levels of government, reser-
ving liability for the latter. The same distinction seems to have been
drawn by the Canadian Supreme Court in Welbridge Holdings v.
GreaterWinnipeg.73
That case concerned a development company which had suffered
loss by taking steps to put up an apartment building in reliance
on a byelaw amending a general zoning byelaw. The amending
byelaw was subsequently declared invalid because the municipality
had failed to observe the audi alteram partem rule of natural
justice in its conduct of the hearing of the application for the amend-
ment. Alleging a negligent and continuing representation that the
byelaw was valid, the development company sought damages.
Laskin J., however, delivering the judgment of the Court, considered
the municipality to be immune from a negligence action. He drew
a distinction between actions of the municipality in a legislative
or quasi-judicial capacity, where it would be immune from suit, and
its behaviour in an "administrative", "ministerial" or "business"1 4
capacity:
A municipality at what may be called the operating level is different
in kind from the same municipality at the legislative or quasi-judicial
level where it is exercising discretionary statutory authority. In exercis-
ing such authority, a municipality (no less than a provincial Legislature
or the Parliament of Canada) may act beyond its powers in the ultimate
view of a court, albeit it acted on the advice of counsel. It would be
incredible to say in such circumstances that it owed a duty of care
giving rise to liability in damages for its breach.75
Although the distinction would profit from a more extended
articulation, it appears to be broadly the same as that taken by the
House of Lords in Anns when it considered that common law
liability could apply where the governmental body was in the
"operational area" of its discretion. In view of differences in the
nature of government between England and Canada, and the delicacy
and difficulty of the task of defining governmental immunity, dif-
ferences in the outcome of individual cases in the two countries are

71b28 U.S.C. §921 (1946).

72346 U.S. 15 (1953). See also Indian Towing v. United States 350 U.S. 61
(1955), which was referred to by Lord Wilberforce in Anns, supra, note 3, 1036.
73 (1972) 22 D.L.R. (3d) 470 (S.C.C.).
4Ibid., 477.
75 Ibid., 478.
19783 COMMENTS - COMMENTAIRES

inevitable. Certainly, English decisions should be treated with some

circumspection.
Welbridge Holdings was by no means the first Canadian decision
to broach the matter of governmental liability. In 1967, the Ontario
High Court in Neabel v. Town of Ingersolr6 declined to hold liable
a municipality for its building inspectors' failure to enforce one
of its building byelaws where a private residence was undergoing a
structural conversion. The inspector certainly examined the builder's
work from time to time so the Court's characterization of his
behaviour as nonfeasance is more than a little questionable. Perhaps
we might regard such a characterization as rationalising a judicial
disinclination to fetter executive action, a process more likely now
to be harnessed to the application of the distinction created by the
Supreme Court in Welbridge Holdings. The Court's further holding
that the inspector's behaviour had no causal significance for the
plaintiff's loss is probably best explained as flowing from its finding
that the plaintiff himself had combined with the builder to
frustrate the efforts of the inspector. Anyway, the subsequent recep-
tion of Dutton in Canada and the decision in Welbridge Holdings
have probably ensured the supersession of the reasoning employed
in the Neabel decision.
Dutton was indeed relied on by the Ontario High Court itself
in rather extreme circumstances in Collins v. Haliburton, Kawartha
Pine Ridge District Health Unit71 where a body, acting under The
Public Health Act, 78 was held liable in negligence for ruining the
plaintiff's mink food business. Acting on complaints that the
business amounted to an offensive trade under section 94 of the
Act, 9 it had issued a stop notice without a proper investigation of
the plaintiff's premises and without giving him a proper hearing.
Donoghue J. relied on Dutton but his decision does seem a question-
able invasion of the defendant's immunity from suit as laid down
by Laskin J. in the Welbridge Holdings case.
Dutton, however, was not followed by the British Columbia
Court of Appeal in McCrea v. City of White Rock.8 0 There was a
reluctance to import the whole of the English decision, with its
reliance on broad "policy", into British Columbia and the Court
was happy to distinguish it on the ground that the building inspector

76 [1967] 2 O.R. 343 (H.C.).

77 [1972] 2 O.R. 508 (H.C.).
78 Then, R.S.O. 1960, c.321, s.94.
79Now, s.97 of R.S.O. 1970, c.377.
80 [1975] 2 W.W.R. 593 (B.C.C.A.).
 McGILL LAW JOURNAL [Vol. 24

in McCrea was guilty at the most of a nonfeasance. The House of

Lords decision in Anns, following perhaps a more conservative line
of legal reasoning than Denning M.R. in Dutton, puts the question
again in an acute form.
Welbridge Holdings and Anns have now come together in the
Alberta Supreme Court in Bowen v. City of Edmonton.80a What that
case reveals is that Canadian courts, whilst receptive to the logic
employed in Anns, may not necessarily apply it in the same way as
would an English court. Indeed, it is rather doubtful that a Canadian
court will impose liability in negligence in the foreseeable future
on a governmental body which is guilty at the most of a genuine
nonfeasance. Further, the Bowen case reveals that courts may still
find it useful to employ the language of nonfeasance to reach what
might be the desired result of no liability in a given case.
In Bowen, the plaintiff purchased a lot in an undeveloped sub-
division of Edmonton in 1973. This sub-division had originally been
zoned for substantial country developments but in 1967 the City,
after protracted negotiations with the then owners of the sub-
division, authorized the replotting of the land for smaller residential
housing. The land purchased by the plaintiff turned out to be
useless for housing development and unsaleable because of soil
instability. The plaintiff contended, inter alia, that the City was
negligent in authorising the replot in these circumstances. °b Al-
though Clements J.A. considered that the City had been guilty of a
"negligent omission" in authorizing the replot without inquiry into
soil stability, he held that it was immune from suit in negligence.
He considered that the distinction between the planning and opera-
tional levels of government taken by the House of Lords in Anns,
for the purposes of the instant case at least, had the same effect
as the division sponsored in Welbridge Holdings between legislative,
judicial and quasi-judicial activity on the one hand, and administra-
tive, ministerial and business powers on the other. In his Lord-
ship's opinion, zoning and sub-division both call for a balancing
of the developer's interest against the public interest and hence are
quasi-judicial in nature. The faculty of judgment is inherent in the

8oa Supra, note 71a.

sob Ibid. 514 per ClementsJ.A.: "If there was actionable negligence
on the part of the city, it lay in authorizing, approving and registering the
replot plan ... without the engineering studies and recommendations of a
consulting engineer referred to in decision No. 414/62 [of the Alberta planning
Appeals Board, dealing in 1962 with the appeal of the owners of the sub-
division against the Edmonton District Planning Commission's refusal to allow
them to replot], negligence which in any view lay also on the owners."
19783 COMMENTS - COMMENTAIRES

process of orderly development and hence there should be no

liability on the City's part for authorizing the replot.
Although such reasoning may be perfectly proper to meet the
case of a municipality which refuses to allow development, or
permits the construction of an abattoir uncomfortably close to
private residences, it is difficult to see what legitimate governmental
interest is served by according immunity to a municipality which
is guilty of negligence in failing to give consideration to the question
of soil instability when authorizing a replot. Putting aside the
questions of the possible contribution the municipality might claim
from the owners of the sub-division at the time of the replot, or of
possible contributory negligence on the plaintiff's part, it is sub-
mitted that there should have been liability on the City's part for
making a decision which no reasonable body would have made. The
instability of the soil was such a dominant factor that the faculty
of administrative judgment could not really have been said to be
in play at all. There was, in other words, no genuine balancing
required on these facts and it is the particular facts of the case,
rather than the general nature of the governmental activity, which
should lead to or away from liability in negligence.

Conclusion

(1) As we have seen, the Anns case demonstrates the organic

growth of the tort of negligence. Reasonable foreseeability has been
placed on the pedestal reserved for it forty-five years earlier by
Lord Atkin in Donoghue v. Stevenson."' The "generalization" of the
tort by the House of Lords seems the inevitable outcome of the
efforts of Lord Atkin and of Brett M.R. in Heaven v. Pender.8
(2) Governmental liability has been rationally assimilated into
private law so as to produce a reasonably olear border-line between
administrative law and private law. Causation and no-duty argu-
ments are henceforth unlikely to confuse the central issue of when
a governmental body or agency ought properly to be protected
from private law liability in the exercise of its functions.
(3) The decision, like Dutton, is important in the way it
operates to distribute loss among the ratepaying population. Loss
distribution, admittedly, is easy enough to decree and seems to
be in keeping with the spirit of the age, but the people who ultimate-

Sl Supra, note 17, 580-81.

82 (1883) 11 Q.B.D. 503.
 McGILL LAW JOURNAL [Vol. 24

ly pay are those who benefit from the building standards that
governmental inspection safeguards. Moreover, the building pro-
fession is an unstable one and corporate rearrangements are com-
mon. In some cases, the local authority may be the only defendant,
which should serve as an incentive to the proper scrutiny of the
work of private builders.
(4) The way in which the Anns and Dorset Yacht cases define a
genuine exercise of administrative discretion, and the possible
impact of the former case on future economic loss claims8 might
serve to stultify the emergence of a separate tort providing redress
for the abuse of governmental powers,8 thereby demonstrating
once again the versatility of the tort of negligence.
Michael G. Bridge*

83 See supra, p.284.

94 See Asoka Kumar David v. Abdul Cader [1963] 1 W.L.R. 834 (P.C.).
* Associate Professor, Faculty of Law, McGill University.