Welsh Development Agency v Redpath Dorman Long Ltd
| Jurisdiction | England & Wales |
| Judge | LORD JUSTICE GLIDEWELL |
| Judgment Date | 17 March 1994 |
| Judgment citation (vLex) | [1994] EWCA Civ J0317-3 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | 93/0866/B |
| Date | 17 March 1994 |
[1994] EWCA Civ J0317-3
(Judge Hicks QC Sitting as Official Referee)
Before: Lord Justice Glidewell Lord Justice Simon Brown Lord Justice Peter Gibson
93/0866/B
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
MR. D KEATING QC and MR. K BUSH (Instructed by Eversheds Phillips & Buck, Cardiff) appeared on behalf of the Appellant
MR. B KNIGHT QC and MR. M BOWDERY (Instructed by Legal Department, Trafalgar House Construction, Croydon) appeared on behalf of the Respondent
( )
Thursday 17 March 1994
On 12 May 1993 Judge Hicks QC sitting as an Official Referee gave judgment on the Plaintiffs' application to amend their Statement of Claim in three different respects and also to amend their Reply. The Judge granted leave for the amendments to the Statement of Claim under two heads, but refused the application relating to the third head. He also gave leave for the proposed amendment of the Reply. The Plaintiffs now appeal against his refusal to grant leave for the amendment under the third head. The Defendants appeal against the Judge's grant of leave to amend the Statement of Claim under one of the other two heads.
Basic Facts
The Plaintiffs (the Agency) are a statutory body who in 1980 owned and wish to develop the East Moors Industrial Estate, Cardiff. The estate included the site of the former East Moors Steelworks, with some adjoining land. The Agency engaged the Defendants (RDL) who are consulting engineers to design the sub-structure of a number of factory units on a part of the estate known as the Tharsis site. At the relevant time the level of this site had been raised by tipping; the Agency allege that the part of the Tharsis site outside the boundary of the former steelworks had been tipped to a greater depth than the area inside the boundary.
On 18 September 1980 RDL submitted a report to the Agency which recommended that certain parts of the structure of the factory buildings should be based on piled foundations, but that the floor slabs of the factory units should not be piled. The Agency allege that they accepted the recommendations in this report and constructed twelve factory units on the Tharsis site numbered 50 —56 and 68 —72, with floor slabs unsupported by piling. These units included two, numbers 50 and 51, which were constructed on sites partly within and partly without the boundary of the former steelworks. The Agency allege that the 12 units were constructed between October 1980 and November 1981.
Units 50 and 51 were both leased by the Agency to the same tenant, Huntleigh Technology Ltd. The Agency allege that in or about November 1985 Huntleigh reported to them that the floor slab of Unit 51 appeared to have settled. The Agency requested RDL to investigate the matter and to report, which RDL did by a report received in December 1985. RDL reported that the floor slab had indeed settled by up to 55 mm at the centre of the building. They concluded that this settlement was probably due to a leak in a water main close to Unit 51, was not due to any inadequacy in design, and was unlikely to continue.
In March 1987 the Agency allege that Huntleigh complained about settlement of the floor slab in Unit 50. The Agency again requested RDL to report, which they did in August 1987. They found that two sections of the floor slab in Unit 50 had settled, but the Agency allege that RDL represented that this was not due to any defect in design and would be unlikely to continue sufficiently to disturb Huntleigh's manufacturing processes. RDL also reported that the settlement in Unit 5l appeared to have stopped.
The Agency allege that despite these reports settlement of the floor slabs of both buildings continued. As a result by 1990 it became impossible for Huntleigh to continue to occupy either building, because they used sensitive high technology equipment which had to be kept level. The Agency therefore relocated Huntleigh to two other units on the estate (not on the Tharsis site).
The action
The writ in this action was issued on 3 July 1990. By it the Agency claimed for
"Loss and/or damages suffered as a result of the Defendants' breach of contract and/or negligent acts and/or omissions in its capacity as consulting engineer engaged by the Plaintiff." ….
The Statement of Claim was served on 3 January 1991. Although the indorsement of the writ had framed the cause of action as being both in contract and in tort, the Statement of Claim pleaded that
"By reason of the said engagement the Defendants owed the Plaintiffs a duty to exercise the degree of skill and care normally to be expected of Consulting Civil Engineers in relation to the design, site works, and sub-structure works associated with the said buildings and when advising the Plaintiffs on matters related thereto."
Paragraph 17 of the pleading specifically alleged
"The settlement of the floor slabs of the said units were caused by the negligence of the Defendants or their servants or agents."
This pleading was followed in the usual way by particulars of the negligence.
It is common ground that although the writ had alleged breach of contract, the Statement of Claim was based purely upon the tort of negligence.
The defence was served on 23 March 1991. Negligence, damage and causation were all put in issue. Moreover the defence contained the following specific pleas:
Paragraph 20 "Further or alternatively, it is denied that the sums pleaded in paragraph 18 are recoverable in law in respect of the cause of action pleaded in the Statement of Claim."
Paragraph 23"Any cause of action (otherwise denied) is statute barred pursuant to the Limitation Act 1980."
Paragraph 20 is a plea that, even if the damage was suffered, the damages claimed are irrecoverable in tort because they are damages for purely economic loss. In this appeal we are
not concerned with this issue. It is the plea of limitation in paragraph 23 of the Defence which gives rise to the issues in this appeal.
By their reply dated 9 May 1981, the Agency pleaded that RDL were estopped from relying on the provisions of the Limitation Act 1980 by reason of the Agency's reliance on the Defendants' reports of December 1985 and August 1987.
The relevant law and its application
The effect of sections 2 and 5 of the Limitation Act 1980 is that the basic limitation period for actions in tort or in contract is six years from the date when the cause of action accrues. There is, however, this important difference, that a cause of action in contract accrues when the breach of contract occurs, whereas a cause of action in tort accrues when the damage for which the action is brought occurs. This, as this action illustrates, is particularly relevant in relation to claims for breach of a duty of care in the design or construction of a building. It is accepted that in this case the duty of care imposed upon RDL by their contract with the Agency was broken, if at all, when they reported on 18 September 1980. The cause of action for RDL's breach of the duty imposed on them in tort, however, only accrued when the damage to the floor slab of any individual building occurred. In other words, there may well be a series of different dates for the accrual of causes of action in relation to the different factory units. It is notoriously difficult to ascertain when damage of this sort first occurred, but it is possible to say that the damage must have occurred not later than a given date, eg November 1985 in the case of factory unit number 5l, when it was ascertained that the floor slab of that unit had settled.
It follows that the primary limitation period in contract expired on 18 September 1986, whereas the primary limitation period in tort would probably have expired at a variety of different dates for the different units. If it is correct to say that damage first occurred no later than the date when the settlement of the floor slab was observed, then for unit 5l the primary limitation period expired not later than November 1991, and for Unit 50, where the settlement was observed in March 1987, the limitation period expired not later than March 1993.
There are two further sections of the Act of 1980 which are relevant in this appeal. Section 35 is particularly relevant to the amendments here in issue. We shall consider it in detail later. Section 14A of the Act was added by section 1 of the Latent Damage Act 1986 in order to deal with the problem that damage to a building may occur but remain latent until after a primary limitation period has expired. Under the law before this amendment of the statute, a Plaintiff who did not discover the damage until the six years had passed might therefore have lost his right of action. This was the position in Pirelli v Oscar Faber & Partners (1983) 2AC 1; as a result of the decision of the House of Lords the Plaintiffs in that case were held to be barred by the expiry of the limitation period from pursuing their action.
The effect of section 14A is to add an alternative limitation period in such a case. The section applies to "any action for damages for negligence". If in such an action a Plaintiff has suffered damage, but can show that he did not for some time either know that such damage had been caused nor that the damage was attributable to the negligence of the Defendant, the limitation period extends to whichever is the later of six years from the date on which the cause of action accrued or three years from the date on which the Plaintiff obtained...
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