The damage incurred by Richard was purely economic, as opposed to physical damage. According to the ruling in Murphy v Brentwood District Council [1991], the local authority is not liable for pure economic loss resulting from negligent approval of building plans. The court held that there must be a special relationship of proximity to impose liability for economic losses, which did not exist in this case. The loss Richard suffered by selling the house at a lower price does not constitute physical damage but rather a financial loss due to the defects. 

Key Point: The Murphy v Brentwood District Council case establishes that local authorities are not liable for pure economic losses arising from their negligence unless there is a special relationship of proximity. This distinction between economic and physical loss is crucial in determining the scope of liability in negligence claims against public authorities.