| Date | 28 February 2001 |
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| Judgment | New Islington & Hackney Housing Association Ltd -v- Pollard Thomas & Edwards Ltd |
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| The Issue | Application of limitation periods in claims for breach of contract and negligence. |
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| Implication |
Normally an architect's liability in either contract or tort for alleged defective design will accrue at the date of practical completion at the latest, unless the architect agrees to undertake separate investigation works after that date. |
printAs a matter of public policy statute provides certain limitations of time within which claims for damages must be brought. Where the action is commenced in relation to a breach of contract, the limitation period will be six years for a simple contract and twelve years if the contract is executed as a deed. Where the cause of action is brought in negligence, the limitation period will be either six years, or under certain circumstances, three years from the date that the plaintiff acquired knowledge of the relevant damage. These matters were closely examined in the recent case between New Islington and Hackney Housing Association Limited -v- Pollard Thomas & Edwards Limited. New Islington engaged Pollard Thomas as architects to design and supervise the construction of six properties to contain 28 residential flats. The construction work was let under two building contracts to separate contractors and in due course practical completion was achieved, and certificates of making good defects and final certificates were issued for both contracts. Soon after completion in February 1992, once tenants had taken occupation of the flats, New Islington learned of problems concerning the sound-proofing in the flats. The Housing Support Manager for New Islington reported that, although all units were carpeted, it was possible to hear normally conducted conversations in the next flat. In December 1992, New Islington wrote to Pollard Thomas asking for clarification as to which sound insulation product had been used in the building, and whether that insulation had been laid in accordance with building regulations. In the event, following much to-ing and fro-ing between the parties and their solicitors, proceedings against Pollard Thomas were not issued until 1 May 1998. New Islington claimed damages for breach of contract and in negligence. Pollard Thomas denied liability, but in any event contended that the claim was statute barred. As to whether the limitation period had expired in relation to the breach of contract allegation, His Honour Mr Justice Dyson QC was satisfied that the cause of action occurred not later than practical completion of the construction works. That had occurred in January and March 1992 under each contract. Pollard Thomas had been engaged by a simple contract under the RIBA standard conditions of engagement, and thus the limitation period had expired six years later in March 1998. Accordingly the proceedings issued in May 1998 had been commenced two months too late. On behalf of New Islington, it was argued that Pollard Thomas had been under a continuing duty to check and review their design beyond the date of practical completion, and in particular within a reasonable time of receiving the letter in December 1992 requesting clarification concerning sound insulation. On this, Justice Dyson also held in favour of the architects, Pollard Thomas. The express terms of the RIBA form did not in his opinion include the duty of keeping the design under review, still less did they include the duty of reviewing the design after practical completion and the handing over of the building. Moreover, the scheme of the building contracts under the Intermediate JCT form left no room for Pollard Thomas to change the design after practical completion had been achieved. Where an architect agreed to investigate the cause of defects in a building after the date of practical completion, this might give rise to a fresh breach of duty in the performance of that investigation. This however did not apply to the letter of December 1992 which did not ask Pollard Thomas to investigate whether there was a problem with the sound insulation. It merely asked two questions, to which Pollard Thomas had responded. In examining the cause of action in negligence, Justice Dyson noted that at the heart of any consideration of this issue, lay the 1983 House of Lords decision in Pirelli General Cable Works Limited -v- Oscar Faber and Partners. Whilst some doubts have been expressed upon the interpretation of that decision, the House of Lords held that the cause of action accrued when the damage first came into existence. This was notwithstanding that the damage was not discovered until some seven years later, by which time the limitation period had expired. Following Pirelli, New Islington's cause of action in negligence accrued at the latest at the date of practical completion. In common with the claim for breach of contract, this claim had therefore become statute barred some two months prior to the commencement of proceedings. It was as a consequence of the potential injustices that might fall from Pirelli that the Latent Damage Act was introduced and incorporated as Section 14A of the 1980 Limitation Act. Section 14A provides that the plaintiff in an action for negligence now has the benefit of an extended limitation period where he or she is unaware of the facts relevant to his cause of action at the date when the cause of action occurred. The extended period is three years from the date when the plaintiff first had the knowledge required for bringing an action for damages, with a long-stop period of 15 years from the date of the negligent act or omission. Justice Dyson concluded that New Islington had all the relevant knowledge by October 1994, when they had obtained independent reports in respect of the sound insulation. Accordingly, allowing a further three years from this date, proceedings commenced in May 1998 remained statute barred. The limitation issues having been resolved in favour of the architect, Pollard Thomas, the proceedings were dismissed.
CJ-0108
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