Pirelli General Cable Works Ltd v Oscar Faber & Partners

JurisdictionUK Non-devolved
JudgeLord Fraser of Tullybelton,Lord Scarman,Lord Bridge of Harwich,Lord Brandon of Oakbrook,Lord Templeman
Judgment Date09 December 1982
Judgment citation (vLex)[1982] UKHL J1209-1
Date09 December 1982
CourtHouse of Lords
Pirelli General Cable Works Limited
(Respondents)
and
Oscar Faber & Partners (A Firm)
(Appellants)

[1982] UKHL J1209-1

Lord Fraser of Tullybelton

Lord Scarman

Lord Bridge of Harwich

Lord Brandon of Oakbrook

Lord Templeman

House of Lords

Lord Fraser of Tullybelton

My Lords,

1

This appeal raises once again the question of whether time can begin to run, for the purpose of the Limitation Acts, in an action founded on negligence in the design or workmanship of a building, at a date before damage to the building has been discovered, or ought with reasonable diligence to have been discovered, by the plaintiff. The writ in this action was issued on 17th October 1978. The appellants (defendants) are a firm of consulting engineers. In or about March 1969 they were engaged by the respondents (plaintiffs) to advise them in relation to the building of a new services block at the respondents' works at Southampton. The new block included a chimney about 160 feet high. It was designed and supplied by a nominated sub-contractor, now in liquidation, but the judge found that the appellants had accepted responsibility for the design and his finding is not now challenged. The chimney was made of pre-cast concrete, and had four flues. Unfortunately the concrete used for the refractory inner lining was partly made of a relatively new material, called lytag, which was unsuitable for the purpose. Cracks developed and eventually the chimney had to be partly demolished and replaced.

2

The respondents originally sued for damages both for breach of contract and for tort, but they accepted that their claim for breach of contract was time barred and their claim is now confined to tort. The judge held that the appellants had been negligent in passing the design and his decision in that respect also is not challenged. The chimney was built during June and July 1969. Damage, in the form of cracks near the top of the chimney, must have occurred not later than April 1970, more than eight years before the writ was issued. The damage was not discovered by the plaintiffs until November 1979, and the Judge found that the defendants had not established that the plaintiffs ought, with reasonable diligence, to have discovered the damage before October 1972, that is six years before the writ was issued. I shall hereafter use the expression "date of discoverability" to mean the date on which the damage was actually discovered, or the date on which it ought with reasonable diligence to have been discovered, whichever is the earlier. For reasons which will appear, the judge held that the date at which the respondents' cause of action accrued was the date of discoverability and, as that date was not more than six years before the writ was issued, he held that the action was not time barred.

3

All the judge's findings of fact are now accepted by both parties and the sole issue between them is on the question of law as to the date at which a cause of action accrued. The respondents maintain that the judge came to the right conclusion on that matter and that the action is not time barred. The appellants maintain that the cause of action accrued more than six years before the writ was issued. They suggest three possible dates as the date of accrual. The earliest suggested date is that on which the plaintiffs acted in reliance on the defendants' advice to instal the chimney, which was bound to be defective and eventually to fall down unless previously demolished. They did not fix this date precisely but it must have been between March and June 1969, well outside the limitation period. The second suggested date is that on which the building of the chimney was completed, namely, July 1969. The third is that on which cracks occurred, namely, April 1970. These three dates are all more than six years before the issue of the writ, which as already mentioned, was 17th October 1978. If any of them is the correct date, the action is time barred.

4

The Act which applies in this case is the Limitation Act 1939, as amended. It has been repealed and replaced by the Limitation Act 1980 but the relevant provision remains substantially unchanged. It is the following provision in section 2 of the 1939 Act:

"2.—(1) The following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued, that is to say:—

(a) actions founded on simple contract or on tort; …"

5

As already mentioned, the findings of fact made by the learned judge (Sir William Stabb Q.C., circuit judge assigned to official referees' business) are now all accepted. He held as a matter of law that he was bound by the decision of the Court of Appeal in the case of Sparham-Souter v. Town and Country Developments (Essex) Ltd. [1976] 1 Q.B. 858 to decide that the action was not time barred. He expressed his reason with admirable brevity and lucidity in the following words:

"I regard the Court of Appeal in the case of Sparham-Souter as having laid down that the cause of action, in negligence cases such as this, arises when the plaintiff and not the building suffers damage, and that the plaintiff only suffers damage when he discovers, or ought with reasonable diligence to have discovered, damage to the building. This decision seems to have been applied by the House of Lords in the case of Anns v. Merton London Borough Council [1978] A.C. 728, and I certainly regard it as binding upon me."

6

The Court of Appeal also felt bound by its own decision in Sparham-Souter and by the decision of this House in Anns and it gave leave to appeal to this House without going fully into the law. Ormrod L.J. in a short judgment, with which Dunn L.J. and Sir Sebag Shaw agreed, explained why the leapfrog procedure had not been used.

7

My Lords, it was decided by this House in Cartledge v. E. Jopling & Sons Ltd. [1963] A.C. 758 that, in the words of Lord Reid at p.771:

"… a cause of action accrues as soon as a wrongful act has caused personal injury beyond what can be regarded as negligible, even when that injury is unknown to and cannot be discovered by the sufferer, and that further injury arising from the same act at a later date does not give rise to a further cause of action."

8

Lord Reid went on, however, to say this:

"It appears to me to be unreasonable and unjustifiable in principle that a cause of action should be held to accrue before it is possible to discover any injury and, therefore, before it is possible to raise any action. If this were a matter governed by the common law I would hold that a cause of action ought not to be held to accrue until either the injured person has discovered the injury or it would be possible for him to discover it if he took such steps as were reasonable in the circumstances. The common law ought never to produce a wholly unreasonable result, nor ought existing authorities to be read so literally as to produce such a result in circumstances never contemplated when they were decided.

But the present question depends on statute, the Limitation Act 1939, and section 26 of that Act appears to me to make it impossible to reach the result which I have indicated. That section makes special provisions where fraud or mistake is involved: it provides that time shall not begin to run until the fraud has been or could with reasonable diligence have been discovered. Fraud here has been given a wide interpretation, but obviously it could not be extended to cover this case. The necessary implication from that section is that, where fraud or mistake is not involved, time begins to run whether or not the damage could be discovered. So the mischief in the present case can only be prevented by further legislation."

9

All the other members of the House who took part in deciding that appeal expressed similar reluctance or regret at being obliged to decide as they did. Thus Lord Pearce at p.778 said that the argument of counsel for the plaintiff in that case "would produce a result according with common sense and would avoid the harshness and absurdity of a limitation that in many cases must bar a plaintiff's cause of action before he knows or ought to have known that he has one."

10

Although Cartledge v. Jopling was a case of personal injuries, the respondents did not dispute that the principle of the decision was applicable in the present case. In that respect the respondents were in my opinion exercising a wise discretion because the decision in Cartledge depended mainly on the necessary implication from section 26 of the 1939 Act, and section 26 is not limited to claims for personal injuries. Indeed, fraud or mistake are much more likely to be in issue where the plaintiff is claiming for damage to property than for personal injuries. Moreover, Lord Pearce seems to have regarded the two types of claim as being subject to the same rules. In the course of his speech at page 780, he relied upon the observations of Lord Halsbury in Darley Main Colliery Co. v. Mitchell 11 App. Cas. 127, 132, as follows:

"No one will think of disputing the proposition that for one cause of action you must recover all damages incident to it by law once and for ever. A house that has received a shock may not at once show all the damage done to it, but it is damaged none the less then to the extent that it is damaged, and the fact that the damage only manifests itself later on by stages does not alter the fact that the damage is there; and so of the more complex mechanism of the human frame, the damage is done in a railway accident, the whole machinery is injured, though it may escape the eye or even the consciousness of the sufferer at the time; the later stages of suffering are but the manifestations of the original damage done, and consequent upon the injury originally sustained."

11

Cartledge v. Jopling was decided by your Lordships' House on 16th January 1963. Later the same year Parliament...

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