IMPLIED TERMS AND RECOVERABILITY OF ECONOMIC LOSS

Holding and Management (Solitaire) Ltd v Ideal Homes North West Ltd and Others [2004] All ER (D) 29 (Oct)

In Holding and Management (Solitaire) Ltd v Ideal Homes North West Ltd and others [2004] All ER (D) 29 (Oct), Judge Peter Coulson QC held that every attempt to imply terms into a lease must be considered on its own merits: in the circumstances of the present case, there was no basis for implying obligations as to the quality of construction work into the leases in question. Judge Coulson also confirmed that, other than in very exceptional circumstances, a builder owes no duty of care in tort to subsequent owners to prevent economic loss arising out of his failure to complete the works to a reasonable standard. Finally, he confirmed that the law imposes no liability in negligence where the damage for which compensation is sought is claimed by a subsequent owner and is damage to a building which was negligently constructed in the first place: such damage constitutes irrecoverable economic loss.