Aftermath of the Dutton Case–Limitation period begins to run against property-owner suing council in negligence only when he knows of the defects relied on or could with reasonable diligence have discovered them–Lord Denning withdraws remark in Dutton’s case about time running from date of bad construction
This was an
appeal by Benfleet Urban District Council from a decision of Judge Norman
Richards QC, sitting as an official referee, holding that the respondents, John
Henry Sparham-Souter and his wife, Glenda June Sparham-Souter, of 3 Wincoat
Close, Benfleet, and Eugene Ryan, of 4 Wincoat Close, were in time to sue the
developers of the properties, Town & Country Developments (Essex) Ltd, and
the appellants for damages for negligence.
J A Tackaberry
(instructed by Barlow, Lyde & Gilbert) appeared for the appellants, and J K
Wood QC and T E Walker represented the respondents. The developers took no part
in the appeal.
Giving
judgment, LORD DENNING said that Town & Country Developments (Essex) Ltd
were developer-builders. On May 6 1965 they began building 3 and 4 Wincoat
Close, at Benfleet, according to plans approved by the local authority. The
houses, part of a new estate of 11 houses and a new street, were completed on
September 30 1965. On December 15 1965 the council issued a certificate that
inspections had been carried out and they found no reason to question the
legality of the work carried out under the building by-laws. In October and
November the developers had agreed to sell no 3 to the Sparham-Souters and no 4
to Mr Ryan. The conveyances were completed in November 1965 and January 1966.
Two or three years later, several cracks appeared in the brickwork of the
houses and they became uninhabitable. The alleged reason was that the
foundations were inadequate to support the load, due to the negligence of the
developer-builders and also to the council surveyor’s negligence in passing the
work as satisfactory when he ought not to have done so. In October 1971 the
plaintiffs issued the writ in the action. There was a decision of Cusack J
which went to appeal, Dutton v Bognor Regis Urban District Council
[1972] 1 QB 373, which the plaintiffs relied on in so far as it established
that a claim lay against a council in such circumstances, but which contained a
remark of his (Lord Denning’s) to the effect that ‘the damage was done when the
foundations were badly constructed.’
Judge Richards held, on a preliminary issue, that the plaintiffs’ action
was in no wise barred either against the developers or against the council. The
developers had accepted that decision, but the council now appealed, submitting
that two of the acts of negligence alleged against them occurred more than six
years before action was brought, and that in respect of those acts the claim
was statute-barred.
On the
authorities, it was clear to him (his Lordship) that a cause of action for
negligence accrued not at the date of the negligent act or omission, but at the
date when the damage was sustained by the plaintiff: Cartledge v E
Jopling & Sons [1963] AC 758 at 777. Time did not begin to run in a
case of the kind until there was a party capable of suing and a party liable to
be sued. Where a builder had negligently made foundations for a house which
were quite insufficient and in breach of the by-laws and the council’s
inspector had negligently passed them as sufficient, the cause of action
against the builder and the council accrued not at the time of the negligent
making or passing of the foundations, nor at the time when the latest owner
bought the house, but at the time when the house began to sink and cracks
appeared. Only then could the man who at that stage owned the house reasonably
be expected to know that he might have a cause of action, and time therefore
should not begin to run against him until he knew of, or could with reasonable
diligence have discovered, the defective foundations. That principle underlay the
Limitation Acts of 1963 and 1975, and it was the principle the court should
adopt in regard to the new cause of action introduced by Dutton. In his
judgment in that case, he (his Lordship), following a dictum of Diplock LJ in Bagot
v Stevens Scanlan & Co [1966] 1 QB 197 at 203, had indeed said that
the damage was done when the foundations were badly constructed. Having thought
it over time and again–and been converted by his brethren–he had now come to
the conclusion that, when building work was badly done, and covered up, the
cause of action did not accrue, and time did not begin to run, until such time
as the plaintiff discovered that it had done damage or ought, with reasonable
diligence to have discovered it. Further, the only owner who had a cause of action
was the owner in whose time the damage appeared. He alone could sue for it
unless, of course, he sold the house with its defects and assigned the cause of
action to his purchaser. It might seem hard on the builder or the council
surveyor that he might find himself sued many years after he left the work, but
it would be harder on the householder that he should be without remedy, seeing
that the surveyor had passed the bad work and the builder had covered it up and
thus had prevented it being discovered earlier.
On arriving at
that conclusion, he (Lord Denning) owed an apology to two judges at first
instance who, in reliance on what he had said in Dutton, had with regret
held that actions before them on similar facts were statute-barred (Mars-Jones
J in Higgins v Arfon Borough Council [1975] 1 WLR 524 and Judge
Fay in Anns v Walcroft Property Co Ltd (unreported), October 24
1975). He now recanted and thought that both those cases were wrongly decided.
In the present case, assuming that the builder and council surveyor
had been negligent, the ‘damage’ occurred when the cracks first appeared in the
brickwork. In the case of each house, that was less than six years before the
writ was issued. The claims were therefore not statute-barred and the appeal
should be dismissed.
ROSKILL LJ
delivered a judgment concurring in the result, and GEOFFREY LANE LJ also
delivered a concurring judgment. The court adjourned an application for leave
to appeal until after the trial, Lord Denning indicating that the court thought
it would be a proper case for leave.
