Defective Premises Act 1972–Alleged breach of statutory duty under Act–Preliminary issue as to relevant date for determining whether Act applied–Act came into operation on January 1 1974–Agreement in relation to alleged defective work entered into before Act came into operation, but work completed afterwards–Whether the expression ‘taking on work’ in the statute referred to the commencement of the operations or covered the whole process including the completion of the work–Act not intended to be retrospective–As the agreement in the present case, under which the work was taken on, was made before the Act came into operation the Act could not apply–Hence defendants could not be liable for a breach of statutory duty under the Act
This was an
appeal from a decision of Walton J on a preliminary issue affecting liability
under the Defective Premises Act 1972. The plaintiffs, John Alexander and
Eileen Julia Alexander, his wife, charged the defendants, Spiro Mercouris and
Costas Mavrommatis, with a breach of statutory duty under the Act. The
defendants’ business included the provision of, or making arrangements for the
provision of, dwellings. The agreement which gave rise to the present
proceedings was made on November 20 1972. The Act came into operation on
January 1 1974. Walton J held that the Act was not applicable to a case where
the person sought to be made liable had taken on the work before the
commencement of the Act. He treated the agreement dated November 20 1972 as the
act of taking on the work. The plaintiffs appealed.
Michael Browne
QC and Geoffrey Jaques (instructed by Lewis & Dick, agents for Zabell &
Co, of Cheam) appeared on behalf of the appellants; Andrew Bano (instructed by
B M Birnberg & Co) represented the respondents.
Giving
judgment, BUCKLEY LJ said: This is an appeal from a decision of Walton J on
June 22 of last year, on a preliminary issue arising on the construction and
effect of the Defective Premises Act 1972. The relevant facts can be concisely
stated.
On November 20
1972 the first plaintiff, John Alexander, entered into an agreement with the
defendants that the defendants would make the necessary arrangements for the
purchase by the first plaintiff of 96 Palace Gates Road, London N22, for the
modernisation of that property and its conversion into two self-contained flats
at a particular stipulated cost, including all the services therein mentioned
or in any way necessary for the completion of that project. The defendants
entered into that agreement in the course of their business, which consisted
of, or included, providing or arranging for the provision of dwellings. They
appointed a supervising officer and, in accordance with arrangements they had
made, the first plaintiff entered into a building agreement with a firm of
builders for the completion of the project. It was completed on or about
February 27 1974, when the supervising officer certified that the project was
practically completed.
In the
meantime the Defective Premises Act 1972, which had been enacted on June 29
1972, came into force on January 1 1974, that being the commencement date fixed
for the Act by section 7 (2). The plaintiffs allege that in breach of a
statutory duty imposed upon the defendants by that Act the defendants have
failed to see that the work comprised in the project was done in a professional
manner, and that it was done with proper materials, and that they had failed to
see that the premises were handed over in a condition fit for habitation when
the project had been completed.
By an order of
May 12 1978 Master Cholmondeley Clarke ordered that the following question be
tried as a preliminary issue in the action, that is to say, whether section 1
of the Act applies to the agreement of November 20 1972, and the work carried
out thereunder. The defendants concede, for the purposes of that preliminary
issue, that the agreement was entered into in the course of their business. The
learned judge, Walton J, answered that question in the negative and dismissed
the action.
Section 1(1)
of the Act is in the following terms:
A person
taking on work for or in connection with the provision of a dwelling (whether
the dwelling is provided by the erection or by the conversion or enlargement of
a building) owes a duty–(a) if the dwelling is provided to the order of any
person, to that person; and (b) without prejudice to paragraph (a) above, to
every person who acquires an interest (whether legal or equitable) in the
dwelling; to see that the work which he takes on is done in a workmanlike or,
as the case may be, professional manner, with proper materials and so that as
regards that work the dwelling will be fit for habitation when completed.
The learned
judge took the view that that section applies only in a case in which the person
sought to be made liable had taken on the relevant work after the commencement
of the Act; he regarded the agreement as being the act of taking on the work in
the present case and, since that agreement antedated the commencement of the
Act, he held that the Act did not apply to the defendants.
The plaintiffs
appeal on the ground that the learned judge erred in holding that the date of
the agreement and not the date of the completion of the dwellings was the
relevant date for determining whether the Act applied.
The appellants
have contended that the Act creates a single and continuing duty, which is not
either completely performed or breached until the work has been completed. It
is, they say, a duty to provide a dwelling which is fit for habitation by work
done in a workmanlike or professional manner with proper materials. If work
taken on is not completed until after January 1 1974, the statutory duty
becomes enforceable after the commencement of the Act which, when so construed,
does not, the appellants submit, have a retroactive effect.
The
respondents, on the other hand, contend that upon the language of the section
the statutory duty arises when a person takes on work for or in connection with
the provision of a dwelling and continues throughout the course of the work, so
that when the work is completed it will have been done in a workmanlike manner
with proper materials and the dwelling will be fit for habitation. They say
that the appellants’ construction involves giving the Act a retroactive effect
and should therefore be discarded.
The Act
creates new statutory duties and new statutory rights and obligations. These
are quite distinct from rights existing at common law in contract or
negligence, although they may in many respects resemble and overlap such common
law rights. Moreover, the Act may create such duties, rights and obligations
between parties between whom they would not exist at common law: see section
1(1)(b), which I have already read, and subsection (4), which provides as
follows:
A person
who–(a) in the course of a business which consists of or includes providing or
arranging for the provision of dwellings or installations in dwellings; or (b)
in the exercise of a power of making such provision or arrangements conferred
by or by virtue of any enactment; arranges for another to take on work for or
in connection with the provision of a dwelling shall be treated for the purpose
of this section as included among the persons who have taken on the work.
Whenever new
rights or obligations are created by statute, anomalies will inevitably arise
initially. Whatever date is found to be the earliest date at which the new
duties, rights or obligations can arise, it will be possible to suggest
instances in which one man will escape liability by a day and another, who has
followed an exactly similar course of action but 24 hours later, will find
himself liable. In such a case an argument by reference to anomalies is, in my
opinion, unlikely to be helpful, and I think the question is purely one of interpretation
of the statute.
The Act
employs the rather unusual expression ‘A person taking on work.’ This must, I think, be because it is intended
to apply not only to cases in which a contractual obligation to work exists,
but also to cases in which the work may be done without contractual obligation
but in circumstances in which he who does the work could claim reward on the
basis of a quantum meruit, to cases in which the work is done
voluntarily without expectation of gain and, perhaps most importantly, to cases
in which a building owner does the work himself.
It seems to me
clear upon the language of section 1(1) that the duty is intended to arise when
a person takes on the work. The word ‘owes’ is used in the present tense, and
the duty is not to ensure that the work has been done in a workmanlike manner
with proper materials so that the dwelling is fit for habitation when
completed, but to see that the work is done in a workmanlike manner with proper
materials, so that the dwelling will be fit for habitation when
completed. The duty is one to be performed during the carrying on of the work.
The reference to the dwelling being fit for habitation indicates the intended
consequence of the proper performance of the duty and provides a measure of the
standard of the requisite work and materials. It is not, I think, part of the
duty itself. If, at an early stage in the provision of the dwelling–for
instance, the putting in of the foundations–someone who had taken on that part
of the work failed to do it in a workmanlike manner, then in my judgment,
assuming that the section applied, an immediate cause of action would arise. It
would not be necessary to await the completion of the dwelling to claim relief
on the basis of a breach of statutory duty.
The argument
that the duty is a single duty which continues in operation until completion of
the dwelling but in respect of which no relief can be obtained until the
dwelling is completed, is in my view inconsistent with, or at least accords
very ill with, section 1(5), which is in these terms:
Any cause of
action in respect of a breach of the duty imposed by this section shall be
deemed, for the purposes of the Limitation Act 1939, the Law Reform (Limitation
of Actions, etc) Act 1954 and the Limitation Act 1963, to have accrued at the
time when the dwelling was completed, but if after that time a person who has
done work for or in connection with the provision of the dwelling does further
work to rectify the work he has already done, any such cause of action in
respect of that further work shall be deemed for those purposes to have accrued
at the time when the further work was finished.
It is true
that that subsection could have the effect of making time run from an earlier
date than it would run from if the damage did not occur until after completion
of the work; but if that were the object of the section, I would have expected
it to be in different language. To enact that any cause of action in respect of
this statutory duty shall be deemed to have accrued at the time when the
dwelling was completed, is a very strange way of putting it if that would be
the time at which a cause of action would in fact accrue in a normal case.
If the duty
arises, as I think, when the person takes on the work, to treat the section as
applicable to any case in which the dwelling is completed after January 1 1974,
notwithstanding that the person may have taken on the work and have done the
greater part of it before January 1 1974, must, it seems to me, involve giving
a retroactive effect to the section. Suppose that A takes on work for providing
a dwelling under a contract with B made on January 1 1973 and does the greater
part of the work before January 1 1974 but does not complete it until some time
in January 1974, the appellants’ argument would impose upon him a statutory
duty to B in relation to work done at any time after January 1 1973; and
moreover, if anyone other than B were to acquire an interest in the dwelling it
would impose upon A a statutory duty to that other person, to whom he would,
apart from the statute, owe no duty at all. In the event of any default by A in
performance of the duty at any time in the course of the work, whether before
or after January 1 1974, A would be liable for damages for that breach of duty.
Apart from the statute, he could not have been so liable. This clearly
attributes to the section a retroactive effect.
As Lindley LJ
said in Lauri v Renad [1892] 3 Ch 402 at p 421, ‘It is a
fundamental rule of English law that no statute shall be construed so as to
have a retrospective operation, unless its language is such as plainly to
require such a construction.’ This, it
seems to me, is a strong argument against the appellants’ construction in the
present case.
In my
judgment, however, the language of section 1 is really not susceptible of
supporting that construction. I think it applies only to cases in which the
person sought to be charged took on the relevant work after the commencement of
the Act.
Accordingly, I
think Walton J reached the right conclusion and I would dismiss this appeal.
Agreeing, GOFF
LJ said: Mr Browne argued that ‘taking on work’ in section 1(1) of the
Defective Premises Act 1972 is equivalent to ‘doing,’ that there is only one
duty imposed by the section, namely, to provide a dwelling fit for habitation
when completed, and that, therefore, a breach of the statutory duty occurs when
the building is finished and not earlier, so that the Act applies if it comes
into force before that happens, even if but very little remains to be done.
This argument
could not be sustained without some qualification, because the statutory duty
must, in my judgment, be broken as soon as bad workmanship, or the use of
faulty materials, takes place. Indeed, as my Lord has pointed out, and I agree,
the concluding words of the section do not state the duty but the measure of
the duty imposed by the earlier words, that is to say, to do the work in a
workmanlike or, as the case may be, professional manner and to do it with
proper materials, so that the result may be produced that the dwelling will be
fit for habitation when completed. Mr Browne and his learned junior, therefore,
submitted that the duty and the breach are continuing ones, so that there is a
breach as soon as the Act comes into force, if any defects then
to me to beg the question, for it assumes that the Act will apply as soon as it
comes into force, but whether that is true is the very question to be
determined.
In support of
his argument, Mr Browne relied upon Hancock & Others v B W
Brazier (Anerley) Ltd [1966] 1 WLR 1317; but in my judgment the learned
judge was right when he distinguished that case, for there the defendant was
unquestionably subject to a contractual duty to complete a house in a proper
and workmanlike manner and all that was decided was, the house not being in
that state when finished, it was no answer to a claim for breach to say that
the defects arose before the contract, for they should have been put right.
Here, however, the question is whether the defendants are under the statutory
duty at all.
It seems to me
that the learned judge was right to give the words ‘taking on work’ in section
1(1) their natural meaning, and they clearly point to the beginning of
operations and not the end. For my part I cannot read them as equivalent to
‘doing,’ still less to ‘having taken on’ or ‘having done.’ Where there is no contract the time when a
person takes on work must, I think, be when he starts to do it. Where there is
a contract, I would think the time would be when the contract is made; but in
any case it cannot be later than when the party starts to perform it.
The
construction for which the appellants contend would, in my judgment, make the
operation of the Act truly retrospective, and ought not to be accepted, because
there is nothing in the Act to overcome the presumption that legislation is not
intended to be retrospective. On the contrary, the language of section 1(1) is
consistent with, and supports, that presumption.
In support of
this part of his argument Mr Browne relied on the case of R v St
Mary, Whitechapel (Inhabitants) (1848) 12 QB 120 at p 127, and similar
cases, which show that where a statute is to operate prospectively the
presumption does not apply even although the facts or circumstances which bring
the case within the statute arose before it was passed. But in my judgment, if
the appellants’ arguments were right, this Act would not be operating
prospectively, because it would create new rights and duties arising out of the
past transaction; that is to say, the contract made, or work undertaken, on the
faith of the law as it then stood, particularly in cases coming within section
1(4) of the statute.
As it seems to
me, the matter falls precisely within the principle stated in Craies on Statute
Law, 7th ed, p 387, in these words: ‘A statute is to be deemed to be
retrospective, which takes away or impairs any vested right acquired under
existing laws’–and then come the important words for present purposes–‘or
creates a new obligation, or imposes a new duty, or attaches a new disability
in respect of transactions or considerations already past.’ Moreover, one must not overlook the fact
that, as the appellants could not controvert if their argument be right, the
Act would apply although the work was taken on before even the Act was passed.
Both sides
relied upon section 1(5) of the Act, to which my Lord has referred. Mr Browne
said that the legislature there showed that it was looking to the completion of
the works. Mr Bano, on the other hand, said that if Mr Browne’s argument be
right, there would be no need to deem the breach to have arisen on completion.
In my judgment, however, that section does not really help either way. It is
dealing with a particular matter only, namely, the commencement of time running
under the Limitation Act, and all that it does is to prevent argument whether
that should start when the breach occurred by bad workmanship or the use of
defective materials, or when the work was finished, or even later, when damage
results or the defects are, or ought to have been, discovered.
Mr Browne
relied further on section 2(7), which he said shows that the legislature was
indeed using the words ‘taking on’ or ‘take on’ on the one hand and ‘doing’ or
‘does’ on the other as synonymous. For my part, I do not think the section does
show that. If anything, I think the section distinguishes those expressions,
but in any case it is dealing with a very particular matter and in my judgment
does not throw any light on the problem before us.
Finally, the
appellants relied on section 4, which deals with repairing covenants in leases.
That section, however, is not directed to ‘taking on’ work, but to a continuing
obligation to do works if and when they should become necessary, for which
special provision was, in my view, requisite or desirable, if for no other
reason, to prevent disputes. I do not see how the appellants can derive any
comfort from this section which, to put it at its lowest, does not proceed upon
the basis that the Act, on coming into force, would automatically apply without
express provision, and it is carefully worded to make its operation
prospective.
For these
reasons I agree with my Lord and with the learned judge below, and I too would
dismiss this appeal.
Also agreeing,
WALLER LJ said: I would only add that the phrase ‘taking on’ is an unusual
phrase to find in a statute, and in my opinion would appear to be incapable of
being construed in a manner which is different from the starting of the work or
the entering into of the contract. In other words, the latest time at which
‘taking on’ could possibly mean would be the time when the work was started.
Mr Browne’s
submission that the duty was an all-embracing duty, including the completion of
the work, is, I think, further made difficult by the words towards the end of
the section. The duty is to see that the work which he takes on is done in a
workmanlike manner etc, so that as regards that work the dwelling will be fit
for habitation when completed. As it seems to me, the duty starts when the
person takes on and continues while the work is done, and the test of the
manner in which the work is done is that when the building is completed it is
fit for human habitation.
The appeal was dismissed with costs.
