Dear Colleagues;

I’m afraid I don’t know what article you were reading, Jason! But let me make a couple of comments.

One, I endorse with some enthusiasm Bill’s comment that “do we even think that claims for breach of statutory duty are not claims in tort?  They appear in textbooks on tort.  They seem to be subject to the limitation periods for torts.  If something walks like a duck, quacks like a duck, then maybe it is a duck.” Yes! (For a difference of opinion on this issue between two very good judges in NSW, see Vickery v The Owners Strata Plan No 80412 [2020] NSWCA 284- I agree with the comments of Leeming JA at [80]: ‘the right sought to be vindicated by Mr Vickery… is a right at common law, a tort, commonly known as the tort of breach of statutory duty’.)

Second, while it is not precisely the same issue, a decision of the NSWCA handed down quite recently has some comments (again by Leeming JA) on the status of an action on a contract which is ‘deemed’ to come into existence after a building is completed, to give a subsequent owner a right of action in relation to defects caused by the original builder: see Parkview Constructions Pty Ltd v The Owners – Strata Plan No 90018 [2023] NSWCA 66 (17 April 2023). (One could of course view this as a statutory exception to the doctrine of privity.) Leeming JA commented as follows at [51], in holding that the action between the parties remained an action based on contract law:

 

51. There is a difference between statute modifying the general law, and statute creating a new cause of action. Statute modifies the general law all the time, including the general law of contract. Examples may be seen in the law of apportionable claims in Part 4 of the Civil Liability Act 2002 (NSW), the entitlement to interest under ss 100 and 101 of the Civil Procedure Act, the modifications of the common law doctrines of frustration and restraint of tradeby the Frustrated Contracts Act 1978 (NSW) and the Restraints of Trade Act 1976 (NSW), the tests for breach and causation of contractual promises to take reasonable care in Part 1A of the Civil Liability Act (because “negligence” is defined to include some contractual claims), the requirements of signed writing in a wide range of contracts imposed by statutes ancient and modern, and the quite elaborate law of limitation periods applicable to building cases considered in Bandelle Pty Ltd v Sydney Capitol Hotels Pty Ltd [2020] NSWCA 303. Although the statutory modifications may be very substantial, it is tolerably clear that the statute starts with the notion of a contract between developer and builder, and then modifies the terms and the persons who can sue for breach, and in the case of s 18C, imputes to the developer work which has been done in accordance with those terms. Nevertheless, the result remains a claim in contract. By way of analogy, consider actions for negligence to which the Civil Liability Act applies. Breach is determined by ss 5B and 5C, causation is determined by ss 5D and 5E, and there are many new defences and modifications of common law defences contained in the balance of Part 1A. If damages are sought for personal injury, their availability and quantum will be governed by Part 2, and if they extend to damages for mental injury, their availability and quantum will be governed by Part 3. Nonetheless, the plaintiff’s claim is normally regarded as being for the tort of negligence, notwithstanding that most elements of that claim are now determined by statute.

 

Regards

Neil

 

 

 

 

If you look at the wording of some of the statutory provisions “abolishing” the rule, it seems clear to me at least that the action by a third party beneficiary is on the contract.  In reversing the decision in Vandepitte, the Ontario Insurance Act provides:

 

244. Any person insured by but not named in a contract to which section 239 or 241 applies may recover indemnity in the same manner and to the same extent as if named therein as the insured, and for that purpose shall be deemed to be a party to the contract and to have given consideration therefor.

 

The statute does not give a cause of action, it deals with the precise problems with the third party beneficiary rule and removes them.  In any case, I think that that rule should now be largely ignored.  There are so many “exceptions” and refusals by courts to follow it that it hardly qualifies as a rule.  And good riddance!

 

Angela Swan

 

 

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