Negligence, pure economic loss and related entities

Arthur Allens Robinson

Project Company No 2 Pty Ltd v Cushway Blackford & Associates Pty Ltd & Anor [2011] QCA 102

The Queensland Court of Appeal has allowed an appeal and ordered that a party be added as a plaintiff to a case yet to be heard. The court below had dismissed the application on the basis that the pleading did not disclose a cause of action. While following the principle established by the High Court (that a subsequent purchaser of commercial premises could not recover from the builder damages caused by defects in the building resulting from faulty construction unless it demonstrated vulnerability) the Court observed that the principle was framed in circumstances where the purchaser had an arms length relationship with the vendor and could therefore take steps to protect itself. That principle may be of no application where the purchaser and the vendor are part of the same corporate group, since the nature of the transaction is quite different.

Reproduced with permission of Allens Arthur Robinson and in accordance with their terms of use.

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