Missing a limitation date is the sort of thing to make a lawyer wake up at night in a cold sweat. So it always surprises me how often claimants seem to leave things until a critical deadline before issuing proceedings. (I should make clear that in the case below, where the action was held to be statute-barred, there is no indication as to who was at fault.)
In Clinton Eagle v Redlime Ltd the claimant, Mr Eagle, sued his contractor in negligence for failing to construct a concrete base for a large building to be used for a dog kennelling business, in accordance with drawings. Why negligence? The usual reason, so that he could use the longer limitation period applying to tort (six years from the occurrence of damage) as opposed to that applying in contract (six years from breach). This case may be one of the last of its type…
Section 14A of the Limitation Act 1980
Specifically, Mr Eagle wanted to use section 14A of the Limitation Act 1980. This gave him an additional period of three years from the date when he knew he had a cause of action, subject to a 15-year longstop.
The timeline
On 9 October 2006, Mr Eagle had written what turned out to be an important letter to Redlime. In it, he had asked them for comments on the “subsidence problem” and noted that he might have to get another contractor to remedy things and might then reclaim the costs from Redlime. Mr Eagle’s solicitors sent a pre-action protocol letter on 15 December 2006.
If proceedings had been issued by 9 October 2009, the first letter might have been irrelevant. But the protocol letter was not followed up by a High Court claim form until 29 October 2009 – slightly over 3 years from the date of the first letter. If Mr Eagle could be said (by virtue of the first letter) to have had “the knowledge required for bringing an action for damages” under section 14A(5) of the Act, then he was out of time.
Claimant’s knowledge required to set a limitation clock running
Under section 14A, the date of knowledge runs from when a claimant has knowledge of the material facts as to the damage, and of other facts (for example, that the damage is attributable to the defendant). Eder J referred to Lord Nicholls’ words in Haward v Fawcett that knowledge does not mean “knowing for certain”, and “beyond possibility of contradiction”. Lord Nicholls continued:
“[Knowledge means] knowing with sufficient confidence to justify embarking on the preliminaries to the issue of any writ, taking advice and collecting evidence… ‘Suspicion, particularly if it is vague and unsupported, will indeed not be enough, but reasonable belief will normally suffice’. In other words the claimant must know enough for it to be reasonable to begin to investigate further”.
Here, the first letter showed that Mr Eagle knew of cracking to the windows and walls, and of subsidence. The court found that was sufficient to amount to the “knowledge required” within section 14A, even though Mr Eagle did not get an independent engineer’s report until November 2006. He already knew enough for it to be reasonable to begin to investigate further. Cue a red face for someone.
Future tort claims against builders to avoid limitation problems?
In future, it will not be very easy for claimants to use tort claims against builders, to avoid limitation problems.
Since Murphy v Brentwood actions in negligence for building defects have been classed as claims for pure economic loss, and therefore not sustainable. There has been a recent flurry of activity over the “complex structure ” exception (see Linklaters Business Services v McAlpine Ltd), where a claimant argues that the contractor worked in or on one part (or one element) of a building, but caused damage to another part. The scope of this doctrine (if it is part of English law) is still unclear.
However, the real blow to actions against builders in tort was dealt by the Court of Appeal in Robinson v Jones. Jackson LJ said that builders will not usually be held to have “assumed a responsibility” in the same way as professional people often do. This makes a lot of sense to me. Accountants, architects and lawyers may make “statements” that may trigger a liability for negligent misrepresentation, but it is difficult to characterise what a builder does as similar. So we may see tort being used only in those rare cases that Jackson LJ did not completely rule out, or where someone gets home on the “complex structure” theory.
This is all good news for contractors and their insurers. Those acting for claimants should be even more aware of the dangers of the limitation clock running against them.
In another case where some facts and matters seem strikingly familiar to those outlined by Ian above, the TCC has ruled on a defects claim where the claimant was aiming to use section 14A of the Limitation Act 1980. In Renwick and another v Simon and Michael Brooke Architects and others [2011] EWHC 874 (TCC), the TCC gave the claimant an opportunity to amend its pleadings to limit its claim to particular facts about an allegedly ineffective remedial solution that may have been proposed by one of the defendants.
Although Akenhead’s judgment did not give summary judgment to the defendant, based on the defendant’s limitation defence, nevertheless it is a further reminder of how difficult it may be to bring a claim in contract or in the tort of negligence outside of the “usual” limitation periods.
In this particular case when did the cause of action accrue?
I have a contractor friend who has been issued with two defects lists over two months. Is this correct and allowed?