Authored By: Dorottya Viktoria Várkonyi
Technological University of the Shannon
The case of Ward v McMaster (1988) is one of the leading Irish cases, in the law of negligence, and the duty of care owed by public authorities.
This case talks about the issue whether a housing authority (in this case the defendants-McMaster, Louth County Council) is liable for owning a duty of care to the purchaser (in this case the plaintiff-Ward), in the case if the faults were later discovered then when the inspection took place.
The court examined the principles of foreseeability, reliance, and proximity, to determine whether the duty of care exists.
It is a landmark case in Irish tort law, as it confirmed that public authorities may owe a duty of care in certain circumstances, where it is reasonably foreseeable that individuals will rely on their actions.
This case also confirmed that liability in negligence is not only for contractual relationships.
The Ward v McMaster case remains an important authority in Irish negligence law, and until this day it influences the development of the duty of care.
This case took place in the Irish Supreme Court. As the Supreme Court is the highest court, it is also an appellate court, means this case was an appealed. [1]
The plaintiffs are a married couple, who decided to buy a house in Dundalk, county Louth, in Ireland. The couple applied for a loan to be able to purchase the house, this loan was applied to Louth County Council. The loan was applied for 12.000 pounds. The house costs pounds 24.000 pounds.
As part of the loan approval process the council arranged for the property to be inspected, and valued, by one of their officials. The inspection was carried out to determine whether the property was suitable security for the proposed mortgage and whether the loan should be approved.
Louth County Council sent out to the premises an auctioneer, and valuer, who agreed to value the house at 25.000 pounds. The defendant was also the builder of the property.
The house was a reasonable risk for a loan stated one of them.
Following the inspection Mr. Ward has purchased the house. He relied on the Council’s inspection, and did believe that the house was structurally good, and suitable for occupation, for him and his family.
However, after taking the house some significant structural defects became visible, most of them were structural defects. The defects were so serious that the plaintiff had to leave the house, and still to this day it remains empty.
Mr. Ward argued that he had relied on the Council’s inspection. Until the court date, the house remained unoccupied.
In the High Court, the judge found in favour of the plaintiff, based on allegations that the defendants were negligent.
The defendant denied liability. The Council argued that it had not undertaken to guarantee the structural condition of the house and therefore owed no legal duty.
This dispute eventually reached the Supreme Court, where the central issue became that whether the defendant owed any duty of care, and whether the plaintiff reliance on the inspection was sufficient to establish liability in negligence.
The plaintiff, Mr. Ward argued that the defendant (Louth County Council) owed him a duty of care when carrying out the inspection of the property. The plaintiff claimed that the defendant knew he would rely on the inspection before deciding to purchase the property. As the Council did approve of the house after the inspection the plaintiff believed it was the right choice to purchase it, as he thought it was safe and suitable to live there.
The plaintiff also argued, that if the inspection was carried out perfectly, then the structural defects would have been discovered before he completed the purchase.
As a result of the Council’s negligence, he suffered financial loss.
Louth County Council denied that it owed any duty of care to the plaintiff. The defendant argued that the inspection was only carried out to decide if the house was suitable as a security for the housing loan.
They claimed the inspection should have been the buyer’s responsibility.
Another argument the defendant presented was, they can’t be held legally liable for every defect which may exist in a property simply because a housing loan was accepted.
The defendant asked the court to dismiss the claim and find that no duty of care was existent.
Costelloe Judge held in the High Court, that there was a sufficient relationship between the plaintiff and defendant, a proximity of neighbourhood.
In this statement the judge highlighted that the plaintiff was known to be highly unlikely to hire a private valuer himself, as he lacked enough funds for this. This way the defendant should have known not to do an incorrect job while valuing the property. The valuation was an important part of the purchase, and both parties were aware of this. The Council understood the valuation would influence the decision of the plaintiff.
It was reasonably foreseeable that a careless inspection would result in a financial loss for the plaintiff.
The courts reasonings were, the plaintiff and defendant were in a mortgagor, and mortgagee relationship. This way the court examined the relationship between the parties. This way the plaintiff was entitled to place reasonable reliance on the Council’s inspection.
This originates from the Housing Act from 1966. This Act imposed a duty upon the County Council. The relationship between the plaintiff and defendant created a duty to take reasonable care. The injury what was caused was reasonably foreseeable. The breach was established.
The Supreme Court also considered whether it was fair, just and reasonable to impose a duty on Louth County Council. The court held that public authorities should not escape liability simply because they are the statutory powers. Where a public authority is aware, that an individual is highly likely to rely on their actions, and the harm is reasonably foreseeable, then they may own a duty of care.
The court rejected Louth County Council’s argument, that the inspection was solely for the internal purposes, and the court found that the Council failed to exercise reasonable care.
For the mentioned reasons above the court held that Louth County Council was held liable in negligence. This decision has confirmed that public authorities may own a duty of care, where there is a reasonable reliance, foreseeability of harm, and a sufficiently close relationship between the two parties.
This judgment became an important part in the development of the Irish negligence law and has also influenced later cases.
The Supreme Court dismissed the appeal of Louth County Council, and upheld the decision in favour of the plaintiff, Mr. Ward.
The court found that the County Council did owe a duty of care to the plaintiff, when carrying out the inspection. The court also held that the County Council breached it’s duty by failing to identify the serious structural defects.
The County Council was held liable in negligence, for the losses suffered by Mr. Ward.
The remedy awarded was damages to compensate Mr. ward for the purchase of the defective house.
The ratio decidendi in the case of Ward v McMaster is that a public body may owe a common law duty of care to the plaintiff, where it is reasonably foreseeable that the plaintiff would rely on the defendant’s assessment, or valuation, and that there is a close relationship between the parties, and that harm is likely to result from a failure to exercise reasonable care. [2]
The principle established is that public bodies are not naturally exempt from liability.
The ratio decidendi in this case was the court’s ruling and finding a common law duty of care, while the obiter dicta in this case was the judge’s rulings, which are only persuasive.
In my critical analysis I would first like to mention, that before this case there was uncertainty about whether a public authority can be held liable for negligence in Ireland. The supreme Court of Ireland has clarified that public bodies are not naturally exempt from liability. Each case must be examined on its own facts to determine the liability, to determine whether a duty of care exists.
The great strengths of this case is that it promotes fairness and accountability. The court did recognise that it would be unfair for the public authority to carry out an inspection carelessly, resulting in financial difficulty for the plaintiff. The court has helped to protect the individuals who would reasonably rely on the expertise of public authorities.
Another strength of this case is that it further developed the law of negligence in Ireland. The judgment confirmed principles such as foreseeability, proximity, and reasonable reliance.
In my opinion the Supreme Court has reached the right decision. When a public authority is aware that someone will rely on their actions, they should act accordingly.
Ward v McMaster remains one of the most significant decisions in Irish negligence law, particularly in relation to the duty of care owed by public authorities. This case made a long lasting contribution to the development of Irish tort law by providing greater clarity on when a duty of care may arise.
Reference(S):
[1] Byrne and McCutcheon-On the irish Legal Systems
[2] Ward v McMaster
