ON 4 JULY 1985, the High Court of Australia delivered Council of the Shire of Sutherland v Heyman  HCA 41; (1985) 157 CLR 424 (4 July 1985).
The council was sued by a resident homeowner for the expenses associated with remedying damage caused to their house due to it being constructed on inadequate footings. The owner alleged that the council was negligent in that it failed in it’s duty of care to ensure that the dwelling was properly constructed in accordance with the plans they approved because it failed to inspect the foundations before they were covered up.
The court did not find the council to be negligent in this case. Nevertheless, the decision established the principle that a public authority is governed by the ordinary principles of the law of negligence, even if it is a repository of a statutory discretion.
The court held that in certain circumstances a government body could be negligent in failing to prevent harm where a reasonable reliance arises from the community’s dependence on the function being exercised with due care.
Per Mason J at 464:
“…there will be cases in which the plaintiff’s reasonable reliance will arise out of a general dependence on an authority’s performance of its function with due care, without the need for contributing conduct on the part of a defendant or action to his detriment on the part of a plaintiff. …The control of air traffic, the safety inspection of aircraft and the fighting of a fire…by a fire authority…may well be examples of this type of function. …Whether the inspection of motor vehicles for registration purposes could generate such a general reliance is a more complex question…”
Per Mason J at 469:
“The distinction between policy and operational factors is not easy to formulate, but the dividing line between them will be observed if we recognize that a public authority is under no duty of care in relation to decisions which involve or are dictated by financial, economic, social or political factors or constraints. Thus budgetary allocations and the constraints which they entail in terms of allocation of resources cannot be made the subject of a duty of care. But it may be otherwise when the courts are called upon to apply a standard of care to action or inaction that is merely the product of administrative direction, expert or professional opinion, technical standards or general standards of reasonableness.”
The “doctrine of general reliance” has since been rejected by the High Court: see Pyrenees Shire Council v Day; Eskimo Amber Pty Ltd v Pyrenees Shire Council (1998) 192 CLR 330.
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