Robinson v P E Jones (Contractors) Ltd

Hearing date: Tuesday 23 rd November 2010

Lord Justice Jackson:

This judgment is in six parts, namely:

Part 1. Introduction,

Part 2. The Facts,

Part 3. The Present Proceedings,

Part 4. The Appeal to the Court of Appeal,

Part 5. The Law,

Part 6. The Impact of UCTA,

Part 7. Did the Defendant Owe a Relevant Duty of Care in Tort to the Claimant?

Part 8. Conclusion.

This is an appeal by a house owner who claims damages in respect of alleged defects against the builder from whom he purchased his house.

This action has been struck out following the trial of preliminary issues on the grounds that (a) the claims in contract against the builder are statute-barred and (b) the claimant has no cause of action in tort against the builder.

In this judgment I shall refer to the National House-Building Council as "the NHBC". I shall refer to the Limitation Act 1980 as "the Limitation Act". I shall refer to the Unfair Contract Terms Act 1977 as "UCTA".

Section 14A of the Limitation Act provides an extended limitation period for negligence claims where facts relevant to the cause of action are not known at the date of accrual. That extended limitation period is, in effect, three years from the date of knowledge.

Section 2 of UCTA provides:

"(1) A person cannot by reference to any contract term or to a notice given to persons generally or to particular persons exclude or restrict his liability for death or personal injury resulting from negligence.

(2) In the case of other loss or damage, a person cannot so exclude or restrict his liability for negligence except in so far as the term or notice satisfies the requirement of reasonableness.

(3) Where a contract term or notice purports to exclude or restrict liability for negligence a person's agreement to or awareness of it is not of itself to be taken as indicating his voluntary acceptance of any risk."

Section 3 of UCTA provides:

"(1) This section applies as between contracting parties where one of them deals as consumer or on the other's written standard terms of business.

(2) As against that party, the other cannot by reference to any contract term –

(a) when himself in breach of contract, exclude or restrict any liability of his in respect of the breach; or

(b) claim to be entitled –

(i) to render a contractual performance substantially different from that which was reasonably expected of him, or

(ii) in respect of the whole or any part of his contractual obligation, to render no performance at all,

except in so far as (in any of the cases mentioned above in this subsection) the contract term satisfies the requirement of reasonableness."

Section 11 of UCTA provides:

"(1) In relation to a contract term, the requirement of reasonableness for the purposes of this Part of this Act, section 3 of the Misrepresentation Act 1967 and section 3 of the Misrepresentation Act (Northern Ireland) 1967 is that the term shall have been a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made.

……..

(3) In relation to a notice (not being a notice having contractual effect), the requirement of reasonableness under this Act is that it should be fair and reasonable to allow reliance on it, having regard to all the circumstances obtaining when the liability arose or (but for the notice) would have arisen."

After these brief introductory remarks, I must now turn to the facts.

By a written agreement made in December 1991 the defendant agreed to sell, and the claimant and his wife agreed to purchase, a house which was then under construction on plot number 5, Magnolia Drive, Prestbury. No copy of that agreement survives but it is common ground that it was in substantially the same terms as an unsigned draft agreement, which does survive. I shall refer to the written agreement of December 1991 as "the Agreement".

Clause 1 of the Agreement stated that the purchase price was £351,700.Clause 6 provided for completion to take place 14 days after the vendor gave notice to the purchaser that the property was complete.Clause 8 provided that the "building conditions" annexed to the Agreement were incorporated into the contract between the parties.

The building conditions included the following provisions:

"1.(a) The Vendor will in an efficient and workmanlike manner complete the work shown on the drawings and specification relative thereto already produced to and made available for inspection by the Purchaser at the offices of the Vendor with such additions variations or omissions as may from time to time be agreed in writing between the parties.

………

3. Any extra work or variations to the property which the Vendor may agree to carry out at the request of the Purchaser shall be paid for in addition to the sum specified in the Agreement and payment therefore shall be made in full on completion.

……….

8. The Vendor shall not be liable for any defect in or failure or inadequacy of any article item of equipment or fitting supplied to the Vendor by the manufacturer thereof (whether or not personally selected by the Purchaser) which is not within the terms of the Certificate of the National House-Building Council nor for any injury loss or damage arising from any such defect failure or inadequacy.

………

10. The Vendor and the Purchaser shall forthwith enter in to the National House-Building Council's standard form of Agreement No. HB5 (1986) (or any other standard form in current use at the relevant time for the like purpose) which said standard form is hereinafter called "the N.H.B.C. Agreement". The Vendor shall not be liable to the Purchaser or any successor in title of the Purchaser under the Agreement or any document incorporated therein in respect of any defect error or omission in the execution or the completion of the work save to the extent and for the period that it is liable under the provisions of the N.H.B.C. Agreement on which alone his rights and remedies are founded."

Whilst the house was under construction the claimant informed the defendant that he would like to have gas fires in two rooms, namely the lounge and the family room, whereas the specification only provided for a gas fire in one of those rooms. Pursuant to clause 3 of the building conditions, it was agreed that the defendant would construct a second chimney flue in order to serve a second gas fire. The claimant then arranged directly with British Gas for the supply and installation of that second fire.

Construction works were complete by April 1992. Completion of the Agreement between the claimant and defendant took place in that month. The claimant paid the agreed purchase price. The defendant transferred to the claimant and his wife the property which was to become known as 12 Magnolia Rise, Prestbury. The postal address was different from the plot number, but the property was the same.

In September 2004 the claimant arranged for a British Gas service engineer to attend and service the gas fires. The engineer conducted a test, known as a spillage test, to check that the gas fire was effectively drawing combustion products from the room in which it was located. The family room gas fire failed that test. The service engineer recorded this and he also recorded that the gas fire had a "poor flue run". Both gas fires were disconnected for safety reasons. The claimant then arranged for a surveyor to inspect and advise. In October 2004 the claimant wrote to the defendant reporting the surveyor's findings, which were that the flues had not been constructed (a) in accordance with good building practice or (b) in accordance with the Building Regulations in force at the time when the house was constructed.

It appeared that the cost of remedial works would be substantial because the flues would require reconstruction. The claimant, who was by then the sole owner of the property, looked to the defendant to meet the costs of the proposed remedial works.

No resolution of the claimant's claim was achieved through correspondence. Accordingly the claimant commenced the present proceedings.

By a claim form issued in the Manchester County Court on 8 ^th December 2006 the claimant claimed damages for breach of contract and/or negligence and/or breach of statutory duty on the part of the defendant. In his particulars of claim the claimant set out details of the alleged defects in the flues and asserted that remedial work would cost approximately £35,000. The claimant also claimed general damages for loss of use of the gas fires in the lounge and family room since September 2004. The claimant pleaded that his claim was not statute-barred by reason of the provisions of section 14A of the Limitation Act.

This action proceeded, most inappropriately, in the Manchester County Court. The defendant served a defence denying liability and an amended defence asserting that the claim was statute-barred.

On the 17 ^th October 2008 a district judge in the...