In Malaysia, the Federal Court in Majlis Perbandaran Ampang v Steven Phoa Cheng Loon  2 AMR 563 followed the decision in Caparo Industries v Dickman  UKHL 2 where it held; pure economic loss is claimable if 1) the damage was foreseeable, 2) the relationship between the parties was one of sufficient proximity, and 3) it is fair, just and reasonable to impose a duty of care on the defendant. Cardozo of the New York Court of Appeals famously described pure economic loss as "liability in an indeterminate amount, for an indeterminate time, to an indeterminate class".
The rule may also be traced back to Roger Traynor's decision in the California case Seely v. (1965), and was later adopted by the Supreme Court of the United States in East River Steamship Corp V Transamerica Delaval Inc. A few state supreme courts in the United States have departed from the majority rule and authorized recovery for pure economic loss through tort causes of action (usually negligence).
Up until Hedley Byrne was decided, pure economic loss was thought to be entirely within the realm of contract law.
From that point on, in jurisdictions following the English common law, it has been possible to recover for some pure economic loss in negligence; however, because purely economic loss can usually be anticipated and allocated differently by contract, the party seeking to be compensated for such loss must demonstrate a compelling reason to change the contractual allocation through tort liability.
However, La Forest J, writing for a unanimous court, declined to impose liability on the auditors for policy reasons, citing Justice Cardozo's concerns over indeterminate liability.