Ketteman v Hansel Properties Ltd
| Jurisdiction | England & Wales |
| Judge | Lord Keith of Kinkel,Lord Brandon of Oakbrook,Lord Templeman,Lord Griffiths,Lord Goff of Chieveley |
| Judgment Date | 22 January 1987 |
| Court | House of Lords |
[1987] UKHL J0122-1
House of Lords
Lord Keith of Kinkel
Lord Brandon of Oakbrook
Lord Templeman
Lord Griffiths
Lord Goff of Chieveley
My Lords,
The proceedings giving rise to this appeal have been characterised by an unusual number of unfortunate vicissitudes, not the least unsatisfactory of which has been its arrival in this House with the appearance of only one of the two appellants to whom the Court of Appeal granted leave to bring it here and with respondents who had no interest in presenting a contradiction of the appellants' argument, and consequently did not do so.
On 27 May 1980 the respondents (whom I shall call "the houseowners") commenced proceedings against Hansel Properties Ltd. ("Hansel"), the builders of five houses in Burgess Hill, West Sussex, which the houseowners had respectively purchased from them in 1975. In the summer of 1976 all five houses began to show signs of structural damage in the form of internal and external cracks. The houseowners claimed damages from Hansel on grounds of breach of contract and in tort. The claim was based on the inadequacy of the foundations of the houses. On 28 April 1981 Hansel issued a third party notice to Mid-Sussex District Council ("Mid-Sussex"), claiming indemnity or contribution upon allegations of negligence by the latter in approving the plans for the foundations and in inspecting them during the course of construction. Mid-Sussex denied the allegations against them and on 18 August 1981 issued a fourth party notice to Jamieson Green Associates ("the architects") claiming indemnity or contribution from them on the ground of negligence in the design of the foundations. The architects lodged a denial. The houseowners at first took no steps to have Mid-Sussex and the architects joined as parties to the action, because their solicitors believed that Hansel were sound financially. Later they began to have doubts about this (which have since proved only too well-founded), and in June 1982 they issued a summons for leave to join Mid-Sussex and the architects as defendants to the action. The summons was heard by Judge Sir William Stabb Q.C. on 25 June 1982, and on that day, no opposition being offered by counsel for Mid-Sussex and the architects, he made an order in these terms:
"It is ordered that: (1) The first third party and the fourth party be joined as defendants to the action. (2) A statement of claim to be served on the first third party and the fourth party within 21 days. (3) Defences to be served 14 days thereafter … (7) The trial date for 12 July to be vacated and that the date for trial to be fixed for 22 November 1982 with an estimated length of ten days."
What happened next was thus described by Lawton L.J. in the course of his judgment in the Court of Appeal [1984] 1 W.L.R. 1274, 1282:
"This order did not state explicitly that the specially endorsed writ should be amended. Counsel for the plaintiffs was instructed to settle an amended statement of claim. This he did. On or about 26 July 1982 a court clerk employed by the plaintiffs' solicitors went to the central office to get the amended specially endorsed writ stamped. A clerk there refused to apply the stamp on the ground that the order of 25 June 1982 did not provide for the writ endorsed with the statement of claim to be amended. It did so by implication because it provided that the third and fourth parties should be joined as defendants to the action. It is to be regretted that the clerk decided as he did. By letters dated 30 July 1982 the plaintiffs' solicitors sent the third and fourth parties an amended specially endorsed writ together with a draft consent order to put right that which the clerk in the central office had said was wrong. The fourth parties' solicitors returned the draft consent order duly endorsed on 4 August 1982. The third parties did the same on 9 August. The plaintiffs' solicitors returned to court on 8 September 1982. Judge Newey Q.C. then made an order in these terms: 'Upon reading the parties' agreed terms it is ordered that: The plaintiffs have leave to amend the statement of claim in the form annexed hereto.'
On 9 September 1982 the writ was re-issued. On 17 September 1982 the plaintiffs' solicitors sent the third and fourth parties a copy of the order dated 8 September, but they did not serve them with a copy of the re-issued amended writ, as they should have done. Thereafter, the third and fourth parties behaved as if they were the second and third defendants."
It is to be added that copies of an amended statement of claim were also sent to the solicitors for Mid-Sussex and for the architects.
The result is that technically Mid-Sussex and the architects have never been properly joined as defendants. But having entered defences and since participated in the proceedings as defendants they could not now be heard to take that point.
The trial of the action began before Judge Hayman, sitting as deputy Official Referee, on 23 November 1982 and continued for some time. On 10 December 1982, after counsel for the architects had concluded his submissions on the evidence and counsel for the plaintiffs was in the course of making his, counsel became aware of the decision of this House in Pirelli General Cable Works Ltd. v. Oscar Faber & Partners [1983] 2 A.C. 1, judgment in which had been delivered on the previous day. In that case the House, disapproving of certain dicta in the Court of Appeal in Sparham-Souter v. Town and Country Developments (Essex) Ltd. [1976] Q.B. 858, held that the date of accrual of a cause of action in tort for damage caused by the negligent design or construction of a building was the date when the damage came into existence, and not the date when the damage was discovered or could with reasonable diligence have been discovered. The leading speech, concurred in by the others of their Lordships who heard the appeal, was that of Lord Fraser of Tullybelton, who said at p. 16:
"The plaintiff's cause of action will not accrue until damage occurs, which will commonly consist of cracks coming into existence as a result of the defect even though the cracks or the defect may be undiscovered and undiscoverable. There may perhaps be cases where the defect is so gross that the building is doomed from the start, and where the owner's cause of action will accrue as soon as it is built, but it seems unlikely that such a defect would not be discovered within the limitation period. Such cases, if they exist, would be exceptional."
Counsel for Mid-Sussex and for the architects, reading the report of the decision in The Times newspaper, perceived that they might have available to them a defence of limitation, as the decision indicated that in a case of this kind the limitation period began to run from an earlier date than had previously been thought to apply. They accordingly applied for leave to amend their defences, the proposed plea in the case of the architects being in these terms:
"If (which is denied) the third defendants were guilty of negligence or breach of statutory or other duty whether as alleged or at all, time for the purposes of the Limitation Acts began to run on the occurrence of one of the following events: ( a) the submission to and/or approval by the local authority for building regulations purposes of the plans drawn by the third defendant and/or the approval by such authority of the excavations and/or foundations at the plaintiffs' premises allegedly constructed in reliance upon the said plans, whereby the homes or back of them were defectively designed and/or built as alleged by the plaintiffs; ( b) the defective construction and/or completion of the houses and/or of their foundations, as alleged by the plaintiffs; ( c) the purchase by the plaintiffs and each of them of their respective houses, designed and/or constructed defectively as alleged by the plaintiffs; ( d) the settlement of the foundations wholly or in part or other movement or damage at the said houses caused or contributed to by the defective design and/or construction as alleged by the plaintiffs.
The third defendants will contend that each of the events above mentioned occurred more than six years prior to the joinder of the third defendants."
At this stage neither counsel appear to have appreciated that, due to the events described earlier, their clients had not been joined as defendants until at the earliest 9 September 1982. It seems to have been taken for granted that they had been joined very soon after Judge Stabb's order of 25 June 1982. The evidence led in the action had been to the effect that cracks in the five houses had been discovered in the course of August and early September 1976. So counsel had in mind to argue primarily that the houses were "doomed from the start" within the meaning of Lord Fraser of Tullybelton's dictum, and paragraphs ( a), ( b) and ( c) of the proposed amendments were directed to this aspect. Paragraph ( d) was directed to a date such as was actually decided in the Pirelli case to have been that upon which the limitation period had started to run. They did not believe that they might have had a limitation defence under the law as it was understood to have been before the Pirelli decision, and it seems that they so informed Judge Hayman when moving the proposed amendments. Judge Hayman allowed the amendments upon terms as to costs, and offered all parties an opportunity of leading further evidence if so advised, an opportunity of which none of them took advantage. 10 December was a Friday, and it seems that in the course of the ensuing weekend counsel discovered the true state of affairs regarding the joinder as defendants of Mid-Sussex and the architects, and the judge was told about it on the following Monday, 13 December....
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Ketteman v Hansel Properties Ltd
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