London Congregational Union Incorporated v Harriss & Harriss

Negligence — Statute of Limitations — Proceedings against architects — Appeal from decision of official referee awarding damages in favour of members of church on two issues — Main issue was a complaint as to design of surface water drains and minor issue alleged failure to incorporate a vertical damp-proof course between steps leading down to church hall entrances and the adjacent walls — Sitting as an official referee, Judge Newey QC held that the defendants, present appellants, were liable in damages under both heads — Appellants were the architects for the construction of a new church and hall for the respondents — The church was constructed on top of the hall and the design, which involved certain open paved areas at lower levels, required a scheme for the drainage of surface water — The drainage was effected by gullies connected by pipes to a sewer, but, unfortunately the scheme contained no safeguard against ‘surcharging’, so that if the sewer became overloaded water could be discharged back through the pipes and flood the hall — This in fact happened — The minor head of complaint was that, through lack of a damp-proof course between a staircase and the walls of a building into which it was set, moisture penetrated the brickwork and damaged plaster and decorative finishes — Appellants were found to be negligent and there was no appeal against this finding — The only questions raised on the appeal were whether the respondents’ causes of action against the appellants were statute-barred — The writ in the action was issued on February 18 1977, so that the relevant date for deciding whether the respondents’ claims were barred under the Limitation Act 1939 was February 18 1971 — The flooding of the church hall, when the sewer was surcharged after heavy rain, occurred on August 3 1971 — All three judges in the Court of Appeal agreed that any remedy in contract was time-barred, but there was a difference of opinion in regard to the major head of the action in tort — O’Connor and Ralph Gibson LJJ, following the decision in Pirelli General Cable Works Ltd v Oscar Faber & Partners, held that the cause of action arose when the physical damage, the flooding, occurred — The action was, therefore, not statute-barred and the appeal under this head should be dismissed — The majority rejected submissions that the defective state of the drains was itself physical damage to the building, that the building could be regarded as ‘doomed from the start’ within Lord Fraser’s cautionary dictum, or that the claim could be based on economic loss dating from completion of the building — Sir Denys Buckley, however, considered that the respondents suffered damage when the defectively designed building was handed over to them and that their claim under this head was statute-barred — He would have allowed the appeal on this issue — All three judges held that the appellants’ appeal should be allowed on the minor issue of the absence of a damp-proof course — The decision here, made with some reluctance, was based on the incidence of the burden of proof — On the principle of Cartledge v E Jopling & Sons Ltd, the burden of proof was on the respondents and they had not shown that the damp had reached the plaster during the relevant period for limitation purposes — A number of authorities discussed in the judgments — Appeal dismissed on major issue, allowed on the minor issue

The following cases are referred to in this report.

Anns v Merton London Borough Council [1978] AC 728; [1977] 2 WLR 1024; [1977] 2 All ER 492; [1977] EGD 604; (1977) 243 EG 523 & 591, HL, [1977] 2 EGLR 94

Batty v Metropolitan Property Realisations [1978] QB 554; [1978] 2 WLR 500; [1978] 2 All ER 445; [1978] EGD 742; (1977) 245 EG 43, CA

Bromley London Borough v Rush & Tompkins Ltd (1986) unreported

Cartledge v E Jopling & Sons Ltd [1963] AC 758; [1963] 2 WLR 210; [1963] 1 All ER 341, HL

Chelmsford District Council v J J Evers Ltd (1983) unreported

Darley Main Colliery v Mitchell (1886) 11 App Cas 127; 2 TLR 301, HL

Dove v Banhams Patent Locks Ltd [1983] 1 WLR 1436

Forster v Outred & Co [1982] 1 WLR 86; [1982] 2 All ER 753, CA

Howell v Young (1826) 5 B & C 259

Jones v Stroud District Council (1986) 279 EG 213, CA

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Junior Books Ltd v Veitchi Co Ltd [1983] 1 AC 520; [1982] 3 WLR 477; [1982] 3 All ER 201, HL

Ketteman v Hansel Properties Ltd [1984] 1 WLR 1274; [1985] 1 All ER 352; [1984] EGD 903; (1984) 271 EG 1099, [1984] 2 EGLR 157, CA

Muirhead v Industrial Tank Specialists [1986] QB 507; [1985] 3 WLR 993; [1985] 3 All ER 705, CA

Pirelli General Cable Works Ltd v Oscar Faber & Partners [1983] 2 AC 1; [1983] 2 WLR 6; [1983] 1 All ER 65; [1983] EGD 889; (1982) 265 EG 979, [1983] 1 EGLR 135, HL

Sparham-Souter v Town & Country Developments (Essex) Ltd [1976] QB 858; [1976] 2 WLR 493; [1976] 2 All ER 65, CA

Tate & Lyle Industries Ltd v Greater London Council [1983] 2 AC 509; [1983] 2 WLR 649; [1983] 1 All ER 1159, HL

Tozer Kemsley & Millbourn (Holdings) Ltd v J Jarvis & Sons Ltd (May 5 1983), unreported

This was an appeal by the defendant architects, Harriss & Harriss, from a judgment of Judge Newey QC, sitting to discharge the functions of an official referee, in an action by the plaintiffs, the present respondents, the London Congregational Union Incorporated, claiming damages for alleged negligence in the design and construction of a church and church hall on land to the north of East End Road in East Finchley.

D G Wright QC and Bruce Coles QC (instructed by Reynolds Porter Chamberlain) appeared on behalf of the appellants; Richard Fernyhough QC (instructed by Kingsford Dorman & Co) represented the respondents.

Giving the first judgment at the invitation of O’Connor LJ, RALPH GIBSON LJ said: This is an appeal by defendants from the judgment of His Honour Judge Newey QC, one of the judges nominated by the Lord Chancellor to deal with High Court official referee business, given in the action on November 17 1983. The plaintiffs, who are in effect the members of the East Finchley United Reform Church, obtained judgment against the defendant architects for £55,476 damages together with interest agreed at £13,617, a total of £69,093. The damages were awarded for negligence on the part of the defendants in the design of the surface water drains and damp-proofing of a new church and hall which were completed in January 1970. The defendants, the appellants in this appeal, contend that they should not have been held liable to the plaintiffs on the ground that the claims of the plaintiffs are barred by the Limitation Act.

I take the facts substantially as they were described by the learned judge in his judgment. The plaintiffs used to own land to the north of East End Road in East Finchley, on which there stood a church and church hall. Early in the 1960s the plaintiffs decided that they would demolish their existing church and hall, sell part of their land and, on what remained, build a new church and new hall. They hoped that, after paying for the new building out of the proceeds of sale of the land sold, they would be left with a sum of money on which the interest would help to support the church. In 1962 the defendants agreed to act as architects.

In order to be able to sell as much land as possible the plaintiffs decided to concentrate their new buildings. A scheme was prepared for them by the defendants which provided for the new church to be placed on top of the new hall. This involved excavation to a depth of about 6 ft, the building of the new hall and ancillary buildings, and on top of them the church. Three small areas at the lower level on the north side of the hall, and a larger area at the lower level on its south side, were to be left open and paved. The hall was 60 ft by 30 ft and 12 ft high and the church was of similar dimensions. The church was to be reached by going up a short flight of steps and the hall by going down flights of steps.

This design required a scheme to drain the rainwater from the open areas at the lower level. The scheme devised by the defendants for dealing with the surface water in those lower levels consisted of gullies connected by pipes to the sewer. The depth of the sewer below the lowest point of the areas was about 3 ft 6 in. The fall from the gullies to the sewer was conventional and satisfactory.

That method of disposing of surface water, however, contained no safeguard against the sewer ‘surcharging’. In other words, if the sewer became overloaded, instead of receiving water from the areas, the sewer would discharge water back through the pipes, and there was nothing to prevent that water, having reached the areas and flooded them to the height of the step to the hall, from entering the hall.

The consequence was vividly described by the learned judge as follows:

if the sewer was going to surcharge, so that water had to escape from it, the water was going to escape by the easiest route. Water would rise in the manholes, but because of their depth, would have to rise to 8 ft or more before it would flow out of the tops of them, but, on the other hand, the gullies were only 3 ft 6 in above the sewer and would so provide an exit for water from it long before the manholes would do so. In effect what the defendants had created was really a large tank in which the church hall was situated, which could act as a relief area, a sort of balancing tank for the sewer in the event of it surcharging.

The new buildings were handed over on practical completion in January 1970. The surface water drains functioned properly for about 20 months. On August 3 1971, after heavy rain, as the learned judge put it ‘disaster occurred’. The sewer in the street filled with water and surcharged. Water came up the pipes into the areas round the church hall, rose higher and flowed into the hall. On August 4 the water went down, but then it came up again and there was something like a fountain at one of the gullies. The result was that the woodblock floors were seriously damaged. The underfloor heating was put out of action, and the plaster was damaged. The plaintiffs called the defendants back to find out what had happened. The defendants complained to the borough about the sewer. In the months that followed the defendants continued to press the borough to do something about the sewer. They put forward no proposals of their own. Further flooding occurred from time to time. By mid-1975 there had been flooding of the hall on 11 occasions. The flooding of 1975 was the worst: it was to a depth of 2 ft and the plaster within the hall was damaged to a height of about 3 ft.

The defendants disputed their liability for the state of the surface water drains and the resulting damage. They were held liable in negligence and against that finding they have not appealed.

There was another defect in the defendants’ design in respect of which negligence was admitted during the course of the trial. The staircases leading down to the lower level were set into the walls of the building, which were made of 14-in brickwork, with cement mortar in between and having on their inner faces Carlite plaster. No damp-proof course was provided between the staircases and the brickwork so that moisture could penetrate. The penetration of water through the wall eventually reached and damaged the plaster on the inner surface and the decorative finishes to the plaster.

The flooding and water damage to the hall deprived the church of the use of the hall over long periods of time and prevented them from letting the hall and thereby earning licence fees. In 1976 the plaintiffs went to solicitors and on February 18 1977 a writ was issued against the defendants. It follows that the relevant date for the purpose of deciding whether the plaintiffs’ claims are barred or not by the Limitation Act 1939 is February 18 1971.

The defendants’ contractual obligations to the plaintiffs in respect of the building of the hall lasted until the hall was completed. The hall reached practical completion in January 1970. It has been common ground throughout that the defendants’ contractual obligations came to an end well before February 18 1971 and there has been no possibility of the plaintiffs being able to recover damages on the ground that the defendants were guilty of breach of contract.

There has been, accordingly, only one issue of law before this court, namely whether the plaintiffs’ causes of action in negligence against the defendants were barred under the Limitation Act 1939. If the cause of action in respect of the defective design of the drains accrued on the handing over of the building at practical completion in January 1970, or at some earlier date when the church accepted and approved the defendants’ design, as the defendants contend, then the claim is statute-barred. If accrual of this cause of action did not occur until physical damage was caused to the building by the defect in design, as the plaintiffs submit, then the cause of action accrued in August 1971 and is not statute-barred. So much has been common ground.

With reference to the negligent failure to incorporate a vertical damp-proof course between the open steps leading down to the hall entrances and the adjacent walls, the defendants contend that this cause of action also accrued on practical completion, or earlier, and is for that reason statute-barred. As to this matter, however, in respect of which the sum awarded for damages was in the region of £4,000 out of the total of £55,476, a separate point arises. The defendants say that if in law this cause of action did not accrue until physical damage was caused to the building by the negligence, nevertheless on the evidence that damage is not shown to have occurred within the six years preceding the issue of the writ and therefore this claim is in any event statute-barred. This point turns|page:157| upon the onus of proof of accrual of a cause of action for the purpose of a plea of the Statute of Limitations.

It has not been argued that on the facts of this case in respect of negligent design of the building there must be only one accrual of a single cause of action in respect of all damage resulting from such negligence. In particular it has not been argued that, if the defendants show that the relevant damage for the cause of action in respect of the absent damp-proof course in way of the steps occurred more than six years before the writ, so that that claim is barred, for that reason only the plaintiffs’ claim in respect of the drains is also in law barred.

The submissions of Mr Desmond Wright for the defendants as to liability for the state of the drains were to the following effect:

(i) The cause of action in respect of the drains arose when the damage was suffered. That was at practical completion in January 1970 at latest.

(ii) The state of the drains on construction of them was such that as soon as very heavy rain occurred the hall would be flooded. That state of the drains constituted physical damage to the building before any consequential flooding occurred.

(iii) If that state of the drains was not in law damage caused by negligence then the church, if they had discovered the defect before the flooding occurred, would have been unable to sue the defendants in negligence. If they waited to be flooded before suing they would be met with pleas that the damage had been caused by their own negligence. The law should not produce such a result.

(iv) If the state of the drains upon construction of them as designed by the defendants was not physical damage to the building, nevertheless it caused at that date economic damage to the plaintiffs, ie the cost of putting the drains in order. The relationship of client and architect was in proximity as close as that of client and solicitor. The architects were, accordingly, liable for that economic loss and the cause of action accrued at or before practical completion.

(v) The decision of the House of Lords in Pirelli General Cable Works Ltd v Oscar Faber & Partners [1983] 2 AC 1 did not, despite dicta adverse to the appellants’ primary submissions, prevent this court accepting those submissions. If it did, then the damage to the building, or the defective design of the drains, were such that this case was within the exception to the general rule established by Pirelli’s case, namely the class of ‘defects so gross that the building is doomed from the start’ mentioned by Lord Fraser in his opinion in that case at p 16F-H.

In a most careful and sustained argument, for which I would express the court’s gratitude, Mr Wright urged the court not to be deflected by the dicta in Pirelli’s case from discerning the true nature and extent of the damage suffered by an architect’s client when negligent design by the architect produces a defective building. He asked also that the court recognise the essential similarity of the duties of care owed by professional men and women in the different professions to their clients and apply to architects the same rules for accrual of a cause of action for negligent advice as have been applied by the courts to solicitors.

For my part I find myself unable to accept Mr Wright’s submissions on this part of the case or to respond to his pleas for a process of harmonisation of the rules established by earlier cases in respect of negligent professional advice. The issues in this case with reference to the flooding of the hall are in my judgment to be decided by reference to authority binding on this court or, if I am wrong as to the existence of binding authority, by reference to dicta of such persuasive force that it would be wrong for this court not to follow them.

I start with the Pirelli case. The defendants there were consulting engineers employed to advise on and design an addition to the plaintiff’s factory premises. The design of a tall chimney was negligently defective in that it provided for use of a material for lining the flues which was unsuitable for the purpose. 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 in October 1978. The damage was not discovered by Pirelli, the building’s owners, until November 1977, and it was not proved that Pirelli ought with reasonable diligence to have discovered the damage at any date earlier than six years before the date of the writ. The primary issue raised in the case and decided by their lordships was that the date of accrual of a cause of action in tort for damage caused by the negligent design or construction of a building was the date when the damage came into existence and could not be postponed until the date when the damage was discovered or should with reasonable diligence have been discovered. If the date of accrual of the cause of action was not to be postponed to the date of knowledge, actual or imputed, it mattered not to either side in that case on which other possible date the cause of action should be held to have accrued because any other possible date was outside the limitation period. Nevertheless Mr Wright, who appeared for the successful defendants, submitted that there were three possible dates. Lord Fraser recorded his submissions thus:

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 install 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 October 17 1978. If any of them is the correct date, the action is time barred.

The appellants maintain that the House of Lords in Pirelli’s case made no decision as to which of those three possible dates was in law the correct date. I am unable to accept that submission. First, Lord Fraser in rejecting the validity of the distinction for these purposes between personal injury to the body and injury to a house, drawn in Sparham-Souter v Town & Country Developments (Essex) Ltd [1976] QB 858 and which assisted this court in that case in distinguishing the rule in Cartledge v E Jopling & Sons Ltd [1963] AC 758, said (p 16F-H):

I think . . . that there is an element of confusion between damage to the plaintiff’s body and latent defect in the foundations of a building. Unless the defect is very gross, it may never lead to any damage at all to the building. It would be analogous to a predisposition or natural weakness in the human body which may never develop into disease or injury. The plaintiff’s cause of action will not accrue until damage occurs, which will commonly consist of cracks coming into existence as a result of the defect even though the cracks or the defect may be undiscovered and undiscoverable. There may perhaps be cases where the defect is so gross that the building is doomed from the start, and where the owner’s cause of action will accrue as soon as it is built, but it seems unlikely that such a defect would not be discovered within the limitation period. Such cases, if they exist, would be exceptional.

Second, in a later passage in his opinion, Lord Fraser considered the appellants’ submission that their negligence as consulting engineers was analogous to that of solicitors who give negligent advice on law which results in the client suffering damage and accrual of a right of action when the client acts on the advice (p 18G). That submission has been repeated in this case by Mr Wright. Lord Fraser dealt with it thus:

It is not necessary for the present purpose to decide whether that submission is well founded, but as at present advised, I do not think it is. It seems to me that, except perhaps where the advice of an architect or consulting engineer leads to the erection of a building which is so defective as to be doomed from the start, the cause of action accrues only when physical damage occurs to the building. In the present case that was April 1970 when, as found by the judge, cracks must have occurred at the top of the chimney, even though that was before the date of discoverability.

Finally, at p 19D, Lord Fraser concluded:

I would hold that the cause of action accrued in spring 1970 when damage, in the form of cracks near the top of the chimney, must have come into existence.

In those passages, in an opinion with which Lord Scarman, Lord Bridge, Lord Brandon and Lord Templeman agreed, there was in my judgment a decision that in law a defect such as in foundations resulting from negligent advice or design is distinct from the damage which it later causes to the building and, save in a class of exceptional cases which must be considered later in this judgment, the cause of action does not arise until the damage occurs. There was, moreover, a finding that on the facts of that case, where by negligent design the defendants caused the presence of a defect in the building from which damage to the building later resulted, the cause of action accrued when the damage came into existence and not at any earlier date.

I can see no relevant difference between the relationship of the defendant consulting engineers in Pirelli to their clients the plaintiffs and the relationship of the defendant architects in this case to their clients, the United Reform Church of East Finchley. In both cases there was negligent design which was latent in the sense that for a time the building and the various parts of it functioned as those parts were expected and required to function, and which was later the cause of|page:158| physical damage to the building. I therefore conclude that unless this case can be distinguished on the facts in some way from Pirelli’s case, or unless it falls within an exception from the rule established by that case, the cause of action in respect of the negligent design of the drains must be held to have accrued when the flooding occurred and not before.

Mr Wright submitted that this case is to be distinguished from the general rule because on the facts the defect in design, that is the surface water drains as constructed, was itself the physical damage to the building. He first referred to the facts: he argued that there was here no process of decay, or of unintended movement of parts which should be secured against movement, or of cracking by the separation of parts which should remain whole; but, by contrast, a physical condition of the drains which were from the first instant of construction incapable of functioning as drains, and which would be the cause of damage to other parts of the building, as soon as enough rain fell in the required area to cause surcharging of the sewer.

Next he referred to an unreported decision of His Honour Judge Sir William Stabb, who was for many years the senior official referee and whose experience and learning in this branch of the law are very greatly respected. The case is Tozer Kemsley & Millbourn (Holdings) Ltd v J Jarvis & Sons Ltd (May 5 1983). An office block was built for landowners by general contractors. The heating and air-conditioning plant was alleged in the plaintiffs’ pleadings to be defective as a result of negligent design and installation. The defendants in the case included the main contractors, the architects, subcontractors who installed the plant and consulting engineers who designed the plant and supervised installation of it. Practical completion was in December 1972. Complaints that the plant was defective had been made in November 1972. The plaintiffs conceded that ‘damage’ had occurred by March 1973. The writ was issued in January 1979 by the plaintiffs, who had taken a lease of the building from the landowners in January 1973. On applications to strike out the actions against all defendants, on grounds both of want of prosecution and that the claim was statute-barred, Judge Sir William Stabb held on the pleaded allegations that the plant was defectively designed and constructed from the time that it was installed. It was not suggested that the plant had been satisfactory at first but developed defects later. Complaints of defective operation had been made before practical completion. He rejected the submission that it was a case not of physical damage to the building but of economic loss resulting from a defect in the plant installed so as to postpone the accrual of the cause of action to the date of that loss. He then held, in a passage which Mr Wright submitted contained the correct principle, as follows:

I think that a defect in the construction of the building, be it as a result of a faulty design or construction of part of that building or its services, means and can only mean that a building in that defective state is a damaged building. It is a damaged article in the sense that it is not a sound one . . . a building is a manufactured thing, and if it is unsuitable or defective when it is handed over it seems to me that the cause of action arises when the person acquires it in its defective state. It may well be that to quantify the economic loss that flows or will flow from that defective state will be impossible at that time, but . . . that is the time when the cause of action arises.

The first thing to be noted is that Judge Sir William Stabb was not required in that case to decide whether in law the plaintiff lessees were entitled to recover the alleged or any damages against the defendants, and in particular against the defendant architects or consulting engineers. His decision was that, if causes of action in negligence had accrued, they were statute-barred. It is not necessary for this court in this case to decide whether in the circumstances indicated in the Tozer Kemsley case the plaintiffs could have succeeded in negligence against any of the defendants for the loss resulting not from damage caused by the defective operation of the plant, whether to itself or to any other part of the building, but from expense or inconvenience arising from a heating and air-conditioning plant which did not work as well as such plant might reasonably be expected to work. Making the assumption that the learned judge made, I would accept that on the facts there alleged any cause of action for damage resulting from negligent design of, or supervision of, installation of the plant was rightly treated as arising when the building in that state was handed over to the client. In applying the principle established in Pirelli’s case, as Judge Sir William Stabb sought to do in the Tozer Kemsley case, I see no reason why on the facts of a particular case the defect resulting from negligent design or supervision should not constitute the physical damage to the building provided that the damaging consequences of the defect are immediately effective. In such circumstances there is no need for subsequent or later damage in order to complete the cause of action.

Accepting the principles stated by Judge Sir William Stabb and applying them to the facts of this case, I am unable to find that the defect in design can or should be treated as physical damage to the building. The drains, in the physical condition resulting from the defect in design, were not such as to produce at once their damaging effects. They were capable of functioning properly as drains and they did so from some 20 months. When they failed effectively to function as drains because of heavy rainfall in the area they did not merely function unsatisfactorily, eg by making noises or emitting smells, but were the cause of physical damage to other parts of the building. The defect in design in this case was, in my judgment, as latent, and as distinct from subsequent physical damage caused by it, as was the negligent incorporation of unsuitable material in Pirelli’s chimney.

Mr Wright pointed out that if the cause of action is treated as not arising on these facts until the first flood occurred then it follows that, if at some stage after any cause of action in contract was statute-barred (January 1976) but before any flooding had occurred, the plaintiffs had discovered the defect, they would have been unable to sue for damages. The need to carry out corrective work would be the same. If they did not do the work upon discovery of the need they would be guilty of contributory negligence at least and might face arguments that the original negligence was no longer causative of any future loss which the plaintiffs could reasonably prevent. Such a situation in law was, he said, unjust, and unnecessary on the state of the authorities. This point was advanced to persuade the court to accept the submissions of the appellants.

The argument is, in my view, powerful and persuasive but it cannot prevail. I would accept that there was an element of policy in the decision of the House of Lords in Pirelli’s case in choosing, as the date of accrual of the cause of action, the date when physical damage comes into existence. It was found to be impossible to escape from a result, which was ‘unreasonable and contrary to principle’ (per Lord Fraser at p 19A-B citing Lord Reid in Cartledge v Jopling & Sons Ltd [1963] AC 758), by postponing accrual of the cause of action until the date of discoverability. The solution lay in legislation.

Meanwhile, as it seems to me, their lordships fixed upon that event which at least afforded to the victim of the breach of duty a chance of discovering his right of action before it was lost: namely, the coming into existence of physical damage resulting from the negligent design.

Mr Wright told the court that there is in Parliament a Bill* to implement the recommendations of the Law Reform Committee and it will, no doubt, if passed, remove from the law of limitation as applied to negligent damage to property that unfair, unreasonable and unprincipled aspect of the present law to which Lord Fraser referred in Pirelli. The Bill, if concerned only with the rules of limitation, might — and we have not been referred to the terms of it — be effective to postpone the date at which a cause of action is barred without altering the date at which it accrues under existing common law rules. We would then, if I have followed the direction of the point correctly, and Mr Wright did not expressly put it thus, have the disadvantage of a date of accrual postponed to the happening of physical damage, despite prior knowledge of the negligent defect, although the policy reason for choosing that later date is no longer operative. That may be the position if such a Bill becomes law, but it is a matter to which, in my view, this court cannot have regard; and in those terms Mr Wright did not ask the court to do so. Further, the fact that the law, as I understand it to be, does postpone, in the ordinary case of negligent design and construction of a building, the accrual of the cause of action until the resulting physical damage comes into existence, is no more than a consequence of the rule and cannot be a ground for departing from the rule itself.

*Editor’s note: This refers to The Latent Damage Act 1986, which came into force on September 18 1986.

For my part, I am not impressed by the prophecy of unjust denial of relief to plaintiffs who have discovered a negligent defect but are not entitled to relief in contract and are faced by the prospect of physical damage which has not yet been caused but is likely to result from the defect. First, of course, the concept of negligence is not intended to afford to owners of buildings rights equivalent to contractual rights. Justice does not require that a defendant pay damages in tort for a defect in design which, in Lord Fraser’s words,|page:159| ‘may never lead to any damage at all to the building’. (Pirelli’s case, p 16F-G). Second, if a negligent defect is discovered and the building owner can prove an immediate duty or clear need, in protection of himself or of others or of the building, to carry out repairs to remove the defect so as to avoid physical damage which is shown to be impending, ie likely to occur in the immediate future, it seems to me that the law would accept such a situation as proof of damage: see per Megaw LJ: Batty v Metropolitan Property Realisations Ltd [1978] QB 554, 571D-572A.

Next Mr Wright submitted that, if the design defect in the drains cannot in this case be treated as the physical damage, nevertheless it caused, at the date of practical completion at latest, economic damage to the plaintiffs, ie the burden of the cost of putting the drains in order. As I have said, Mr Wright in this case repeated the argument which he presented to the House of Lords in Pirelli based upon two cases of breach of duty by solicitors: Howell v Young (1826) 5 B & C 259 and Forster v Outred & Co [1982] 1 WLR 86. I have already set out Lord Fraser’s comment upon that argument: in his view, the submission was not well founded. Mr Fernyhough for these defendants has objected that the point was not taken below and that no evidence was directed towards it. Mr Wright accepts that that is the position. Even if, nevertheless, the point can be regarded as open to the appellants on this appeal, for my part I am of the opinion that it cannot avail the defendants so as to require that the cause of action be treated as having accrued at latest on practical completion. The ordinary relationship of client and architect which existed between the parties in this case, or of client and consulting engineer which was present in the Pirelli case, is not in my view such that liability for pure economic loss would arise in tort on proof of negligent design or supervision but without proof of damage to property.

Mr Wright relied upon the principles stated in Junior Books v Veitchi Co Ltd [1983] 1 AC 520. He submitted that the relationship between the defendant architects in this case and their clients, the plaintiffs, was as close as or closer than that between the building owners and the nominated subcontractors who had negligently installed the floor in Junior Books; and that these defendants must also be taken ‘to have known that if they did the work negligently . . . the resulting defects would at some time require remedying by the respondents expending money upon the remedial measures as a consequence of which the respondents would suffer financial or economic loss’: per Lord Roskill, p 546D. Therefore, Mr Wright argues, the cause of action must be treated as having arisen at practical completion when these plaintiffs were put under the necessity of remedying the defects in the drains at some date in the future.

This argument, as I think, fails for several reasons. First, as appears from the passage from Lord Roskill’s speech cited above, it was the defect resulting from the negligent work which was seen as being the cause of the need to spend money on putting right physical defects in the floor: it was not the mere existence of the faulty elements in design or construction which would lead to the coming into existence of the physical defects. As was pointed out by Robert Goff LJ (as he then was) in Muirhead v Industrial Tank Specialists (1985) 3 All ER 705 at p 714A, Lord Templeman in Tate & Lyle Industries Ltd v GLC [1983] 2 AC 509 at p 530 referred to Junior Books as a case where ‘a subcontractor was held liable to the owner of premises for damaging those premises by installing a defective floor’ and in which the plaintiff ‘suffered . . . damage to his property’. Lord Keith and Lord Roskill, who had delivered leading speeches in the majority in Junior Books, agreed with Lord Templeman’s speech.

Further, in Ketteman v Hansel Properties [1984] 1 WLR 1274 the Court of Appeal* (Lawton, Stephen Brown and Parker LJJ) had to consider both the Pirelli case and Junior Books with reference to damage caused to houses by negligent design of foundations. The defendant architects, who had been held liable in respect of negligently constructed and sited foundations, on the ground of physical damage in the form of cracking of walls coming into existence within the limitation period, argued on appeal that the architects had caused economic loss to the builders when the faulty foundations were laid; that the plaintiffs who had bought houses from the builders could be in no better position under the statute than the builders; and that all but one of the claims were therefore statute-barred. Lawton LJ at p 1289 said:

There are a number of answers to this submission: a short one will suffice. The Junior Books case was cited in Pirelli [1983] 2 AC 1. It was not a limitation case at all. Their Lordships did not have to consider when a cause of action accrued. Both Lord Fraser of Tullybelton and Lord Brandon of Oakbrook (who agreed with Lord Fraser’s speech in Pirelli) had been members of the appellate committee when the Junior Books case was decided. In Pirelli [1983] 2 AC 1 at p 16 Lord Fraser rejected the notion that a person could recover from diminution in the value of a building by reason of defective foundations which had not yet led to physical damage to it, unless possibly the work could be said to have been doomed from the start. He also considered inapplicable submissions based on Howell v Young (1826) 5 B&C 259 and Forster v Outred & Co [1982] 1 WLR 86 that a client who receives negligent advice suffers damage when he acts on that advice. He said [1983] 2 AC 1 at p 18:

‘It seems to me that, except perhaps when the advice of an architect or consulting engineer leads to the erection of a building which is so defective as to be doomed from the start, the cause of action accrues only when physical damage occurs to the building.’

I am satisfied that Pirelli [1983] 2 AC 1 governs this case.

*Editor’s note: The case went to the House of Lords on appeal and at the time of going to press the decision of the House is awaited.

In my judgment, for the same reasons Pirelli governs this case also. The fact that the plaintiffs in Ketteman’s case were successors in title to the builders who were the clients of the architects, while in this case the plaintiffs are the immediate clients, can make no difference. That was the position in Pirelli’s case where ([1983] 2 AC at p 18E) Lord Fraser said:

the true view is that the duty of the builder and of the local authority

with reference to foundations

is owed to owners of the property as a class, and that if time runs against one owner, it also runs against all his successors in title.

That principle must also apply to the ordinary duty owed by architects.

The last point on this part of the case is the argument that the state of the drains as constructed was such that this building was within the class of defects ‘so gross that the building is doomed from the start’, and that therefore the plaintiffs’ claim in respect of the flooding by the drains is statute-barred. The submissions on this point, as Mr Wright acknowledged, overlapped with those made by him in support of the contention that in this case the defect in design constituted the physical damage. He relied upon the facts that the defective state of the drains was such that the drains were from the first day incapable of handling heavy rain and no further deterioration was necessary for the drains to cause flooding. He submitted that the building was ‘doomed’ to suffer the damage which it did because in the ordinary course of events it was inevitable that heavy rain would fall and the flooding occur; and he contended that the drains, as a defect in the building, were similar in nature to the defective plant in the Tozer Kemsley case and should be treated as causing the church hall to have been ‘damaged’ from the date of handing over.

The learned judge, who gave judgment in November 1983 before the decision of this court in Ketteman [1984] 1 WLR 1274, rejected the ‘doomed from the start’ argument on the ground that the exceptional cases within Lord Fraser’s dictum should be limited to ‘what might be described as a ‘Batty situation’ ([1978] 1 QB 554 CA): one in which there was never any hope for the building or the part of it the subject of the action; nothing practicable could be done to save it’. He thought that such a test was in accord with the decision of Judge Sir William Stabb QC in the Tozer Kemsley case, the case of the air-conditioning system so defective that it never worked. The learned judge continued:

I do not think that in this present case the church and hall . . . could possibly be described as doomed from the start. At worst, surcharging of the sewer could cause water to enter the areas and hall, and cause damage. But the building itself remained and action could and can be taken to prevent the sort of flooding which has occurred.

I agree with the learned judge that this case is not to be treated as outside the general rule laid down in Pirelli’s case. Having regard to the decision of this court in Ketteman’s case, however, it seems to me that the explanation of the limits, of Lord Fraser’s dictum, which Judge Newey proposed in his judgment, cannot be supported. In particular I cannot accept that a case is to be treated as within an exception to the general rule if it can be shown that ‘nothing practicable could be done’ to save the building or that part of the building which is the subject of the action; nor can I accept that a case must be treated as outside any exception on the ground only that the repair or correction of the defect is practicable.

In Ketteman’s case [1984] 1 WLR 1274 the architects submitted an argument based upon the concept of ‘doomed from the start’ to the|page:160| effect that, by reason of the negligent defects in design and siting, the foundations were ‘bound to settle thereby causing structural damage’ (p 1288C) and that therefore the cause of action must have accrued at ‘the start’, namely at latest the completion of the houses. Lawton LJ, with whose judgment Stephen Brown and Parker LJJ agreed, held that that case must, on its facts, be decided in the same way as Pirelli, namely that the plaintiffs’ causes of action accrued when the physical damage to their houses occurred. He continued:

The issue was, when did Pirelli’s cause of action accrue? The trial judge found that, as a consequence of the use of unsuitable materials, ‘cracks were . . . bound to occur.’ Nevertheless, it is clear that Lord Fraser of Tullybelton did not consider this finding was such as to justify his adjudging that the chimney was ‘doomed from the start.’ In the two passages, at pp 16 and 18, in which he referred to buildings which were doomed from the start, he used the word ‘perhaps’ in relation to their existence. He said, at p 16: ‘Such cases, if they exist, would be exceptional.’ The facts out of which the plaintiffs’ claims arise are broadly similar to those in the Pirelli case. They are not exceptional — if anything, all too common. Lord Fraser’s reference to buildings which were doomed from the start was not necessary for the decision he made. I would regard it as a cautionary dictum so as to leave for future consideration problems which might arise in exceptional cases.

It is, I think, thus clear that there is no established category of case, to be excepted from the general rule in Pirelli’s case, which can be identified merely by analysis and application of the phrase ‘doomed from the start’. In particular, a defect caused by negligent advice or supervision on the part of an architect, or other professional adviser, is not to be treated as outside the general rule merely because the nature of the defect is such that the coming into existence of damage to the building caused by the defect is shown to have been ‘inevitable’ in the ordinary course of events. The other points relied upon by Mr Wright on this part of the case are in my judgment also incapable of taking this case out of the general rule laid down in Pirelli. They have been considered earlier in his judgment with reference to the submission that the defect in design in this case was itself the physical damage to the building. As I have already said, the defect in design with reference to the drains was, in my judgment, as latent and as distinct from the subsequent physical damage caused by it as was the negligent incorporation of unsuitable material in Pirelli’s chimney. I would dismiss the appeal on this part of the case.

The court was told that since the decision of the House of Lords in Pirelli’s case in December 1982 the concept of ‘doomed from the start’ has been very frequently invoked in cases of this nature but very rarely applied. Judge Newey referred in his judgment in this case to the decision of Judge Sir William Stabb QC in Tozer Kemsley, to which I have referred above, as an example of a case within the meaning of Lord Fraser’s dictum in the Pirelli case: and he so described also his own decision in Chelmsford District Council v J J Evers Ltd (1983) Construction Industrial Law Letter 39, a case in which roofs were liable to blow off at any moment. It would not be wise or useful to attempt to define the sort of cases which will qualify for inclusion within the exceptional cases provided for by Lord Fraser’s cautionary dictum. With reference, however, to these decided cases, to which reference was made in argument in this case, I would say that in my view the Tozer Kemsley case, on the assumption that actionable negligence had caused the defective plant to be incorporated in the building, could be regarded either as a case in which the defect resulting from negligent design constituted itself the physical damage, as stated earlier in this judgment, or as an example of a ‘gross’ defect within Lord Fraser’s dictum: I do not think that there is any real difference. As to the insecure roofs in the Chelmsford District Council case, I would again agree that such a defect might well also properly be regarded as giving rise to an immediate duty or clear need on the part of the building owner, in protection of himself or of others or of the building, to carry out repairs to remove the defect so as to avoid physical damage shown to be likely to occur in the immediate future; and thus a case, as I have said earlier in this judgment, in which the law would accept that damage had occurred and the cause of action had accrued. In such circumstances also the defect is ‘gross’ and, I think, within the class of cases contemplated by Lord Fraser in his dictum.

There remains the issue as to the negligent failure to incorporate a vertical damp-proof course between the open steps leading down to the hall entrances and the adjacent walls. The sum awarded for damages under this head was said to be in the region of £4,000. As already stated, the writ in this case was issued on February 18 1977 and the relevant date for the purposes of the Limitation Act is February 18 1971. The practical completion was in January 1970. On February 17 1970 on behalf of the plaintiffs a list of complaints was sent to the defendants. The judge described the complaints, including reference to dampness on various walls. The learned judge found that the matters complained of in that list were not to be regarded as evidence of damage then already caused to the building by reason of the absence of a damp-proof course. He then considered what other evidence there was as to the date when damage so caused came into existence and continued:

The experts gave evidence that it might take 1 to 2 years for moisture to penetrate the brick walls, which were 14 inches thick.

There is nothing wrong with water entering bricks. Bricks are permeable things and they admit and extrude water. So damage resulting from the lack of damp-proof courses would not occur until the damp reached the plaster. The expert evidence makes it peculiarly difficult for me in this case, since a year from practical completion might be outside the limitation period, but two years would be within it.

Somewhat reluctantly I am driven to consider where the burden of proof lies. It is for the plaintiffs to prove their case, but at common law there was no such thing as a limitation period and, therefore, initially the plaintiffs do not have to prove that their cause of action accrued after any particular date. The Limitation Acts have, perfectly properly, been raised by the defendants. They are putting forward a positive case that the plaintiffs’ action is statute-barred and, although I know of no authority dealing with the point and, if there is one, it has escaped the vigilance of counsel, I think it must follow that the burden of proof is upon them. When I am left, as I am here, in the situation where I am uncertain as to whether the damp could have reached the plaster before the crucial date for limitation purposes, or whether it was afterwards, I think it must follow that the defendants have not discharged the legal burden. So I hold that the plaintiffs’ claim is not statute-barred in relation to the lack of damp-proofing course any more than in relation to the drainage arrangements.

In this court Mr Wright has submitted, as it was submitted on behalf of the defendants to the learned judge at trial, that the onus of proof is placed by the law in the first place upon the plaintiffs to show that their cause of action accrued within the limitation period. He has relied upon authority which was not cited to the learned judge.

In Cartledge v E Jopling & Sons Ltd [1962] 1 QB 189 claims were made by plaintiffs for damages for injuries caused by the contracting of pneumoconiosis in the course of work as steel dressers in the defendants’ factories. Glyn Jones J held that the disease had been caused by the breach of statutory duty of the defendants in respect of each plaintiff but that the cause of action had accrued more than six years before the issue of the writ on October 1 1956. The main issue in the case on appeal to the Court of Appeal, and to the House of Lords [1963] AC 758, was whether the causes of action upon the proper construction of section 2(1) of the Limitation Act 1939 should be held to have accrued before the plaintiffs knew or could reasonably have known of any injury. The ruling at every stage was that the accrual of the causes of action could not be postponed until the plaintiffs had actually or imputed knowledge of their injuries. (That rule of law based upon the construction of the statute was reversed by the Limitation Act 1963). On appeal to the Court of Appeal the question of the burden of proof was raised. It was argued for the respondent defendants ([1962] 1 QB at p 193) that the burden of proving the issue of the writ within the limitation period lay upon the plaintiffs. The issue to which that submission was directed is clear from the judgment of Harman LJ at p 202 where he said:

As to South’s case there was a difference of opinion, there being no film in his case before 1952 when the signs were visible but the disease in an early stage. Where, however, the defendant raises the statute of limitations it is, I think, for the plaintiff to show that he is not within it and not for the defendant to prove the opposite: see Darley Main Colliery v Mitchell (1886) 11 App Cas 127; 2 TLR 301, HL.

Pearson LJ at p 208 took the same view. He referred to a passage in the judgment of Glyn Jones J which appeared to assume that the burden of proof was on the defendants to prove their plea of the statute and said:

Where there is a joinder of issue on a defendant’s plea of the Statute of Limitations . . . the burden of proof is on the plaintiff to show that his cause of action accrued within the six years or whatever is the relevant period for the purposes of the statute: Hurst v Parker (1817) 1 B & Ald 92; Beale v Nind (1821) B & Ald 568, 571; Wilby v Henman (1834) 2 Cr & M 658; Darley Main Colliery Co v Mitchell (1886) 11 App Cas 127, 135 . . . O’Connor v Isaacs [1956] 2 QB 288, 364.

On appeal to the House of Lords in Cartledge’s case the appellants did not attack the ruling made in the Court of Appeal on the burden of proof. In his speech, with which Lord Reid, Lord Evershed, Lord Morris and Lord Hodson agreed, Lord Pearce at p 784 said:

|page:161|

I agree with the judgments of the Court of Appeal . . . I would only wish to add a gloss to what was said on the onus of proof in the case of the plaintiff South. I agree that when a defendant raises the Statute of Limitations the initial onus is on the plaintiff to prove that his cause of action accrued within the statutory period. When, however, a plaintiff has proved an accrual of damage within the six years (for instance, the diagnosis by X-ray in 1953 of hitherto unsuspected pneumoconiosis), the burden passes to the defendants to show that the apparent accrual of a cause of action is misleading and that in reality the causes of action accrued at an earlier date. As, however, the judge found that South was in fact suffering from pneumoconiosis in 1950, the question of onus was not a deciding factor.

It seems to me that on this part of the case Mr Wright’s submissions are correct and that the point is decided in favour of the appellants by the Court of Appeal in Cartledge’s case. The point was not argued in the House of Lords but no doubt was cast upon the correctness of the decision. The onus lies on the plaintiffs to prove that their cause of action accrued within the relevant period before the writ. The learned judge, therefore, not having been referred to the authority, misdirected himself. By a respondents’ notice the plaintiffs have contended that if the learned judge had directed himself properly in accordance with the law laid down in Cartledge’s case on the evidence he must have come to the same conclusion. This contention was based upon the passage in Lord Pearce’s speech, cited above, in which Lord Pearce added a gloss to what had been said in the Court of Appeal by Harman LJ and Pearson LJ. Mr Fernyhough argued that the plaintiffs had proved ‘an accrual of damage’ within the six-year period before the writ by proving the existence of damage within that period and that, on tendering that proof, the burden passed to the defendants ‘to show that the apparent accrual of a cause of action is misleading and that in reality the cause of action accrued at an earlier date’. I cannot accept this contention. It confuses the existence, or continued existence, of damage or its consequences with accrual of damage, which is the coming into existence of damage. In my judgment the burden on a plaintiff is to show that, on the balance of probabilities, his cause of action accrued, ie came into existence, on a day within the period of limitation. If he shows that, then the evidential burden would, as stated by Lord Pearce, pass to the defendants to show, if they can, that the apparent accrual of the plaintiffs’ cause of action was misleading etc. On the facts of this case, as is apparent from the passage which I have cited from the judgment of the learned judge, the plaintiff did not tender evidence which showed that on the balance of probabilities the damage had been caused to the plaster within the period of six years from the writ. The evidence was equally consistent with damage having been caused outside that period. The plaintiffs therefore failed to prove that the cause of action in respect of the damp-proofing had accrued within the relevant period and, in my judgment, therefore the defendants are entitled to succeed on that part of their appeal. I would wish to hear counsel as to the effect upon the award of damages of allowing the appeal to that extent.

Agreeing in part, SIR DENYS BUCKLEY said: The writ in this action was issued on February 18 1977. The defendants allege that the cause of action was then statute-barred. So the question which has to be determined is whether that cause of action accrued before February 18 1971.

I shall not repeat the facts which have already been clearly rehearsed by Ralph Gibson LJ. Regarding the major part of the case — that relating to the flooding from the gullies in the low-lying areas around the building — the rival dates are the date in January 1970 when the buildings were handed over by the defendants to the plaintiffs on practical completion and August 3 1971 when the first flood occurred. If the relevant date is in January 1970, the cause of action was statute-barred when the writ was issued: if it is August 3 1971 the cause of action was not then statute-barred.

The argument has centred on the decision of the House of Lords in Pirelli General Cable Works Ltd v Oscar Faber & Partners [1983] 2 AC 1. In approaching this question, I think that it is very important (although maybe rather elementary) to distinguish between the existence of a physical defect in a building, the existence in a building of a liability to develop a physical defect, the occurrence of physical damage to a building, and the accrual of a cause of action sounding in damages.

Damage is an essential ingredient of the tort of negligence. In the Pirelli case the cause of the trouble was the use in the concrete mixture used for the refractory lining of the flues of a factory chimney of a material called Lytag. It was a relatively new material. It proved to be unsuitable for that particular purpose with the consequence that cracks developed in the concrete and eventually the chimney had to be partially demolished and replaced. There does not seem to have been any suggestion that in June and July 1969, when the chimney was built, anyone was aware that Lytag was an unsuitable constituent for use in the lining of a chimney intended for such use as this chimney was. The cracks appeared not later than April 1970. The writ was issued on October 17 1978, more than six years after the appearance of the cracks. The House of Lords held on the facts of that case that the cause of action for damages for the negligent approval by the defendants of the use of Lytag arose not when the plan was approved by the defendants or when the chimney was built, but when consequential physical damage to the chimney in the form of the cracks occurred. They held that the cause of action accrued at that stage notwithstanding that the occurrence of the cracks was not then discovered, nor could the plaintiffs have then been reasonably expected to discover it. The trial judge had held the defendants guilty of negligence in passing the design of the chimney, that is to say, as I apprehend, in approving or countenancing the use of Lytag, and there was no appeal against that finding. There seems to have been no suggestion that the chimney did not work perfectly well until the cracks developed and indeed thereafter until it became necessary partially to rebuild it. The cracks appeared not very long after the chimney was built, but the length of this interval cannot, I think, affect the principle. There is no mention of any finding that the chimney did not work quite satisfactorily meanwhile.

The chimney can be aptly said to have been vulnerable to the consequences of a latent fault or defect of design from the time when it was built by reason of the use of Lytag, but it suffered from no physical defect until the cracks occurred. Until the cracks occurred no damage to the chimney had resulted from the latent defect. The cracks constituted physical damage to the building whereupon, as the House of Lords held with regret, a cause accrued notwithstanding that the existence of the cracks was not reasonably discoverable. That cause of action stemmed from the negligent adoption of Lytag and was completed and vitalised by the resulting physical damage to the building without which the cause of action was incomplete.

That that was Lord Fraser’s approach is, I think, apparent from part of his speech where he commented on a passage in the judgment of Geoffrey Lane LJ (as he was then) in Sparham-Souter v Town & Country Developments (Essex) Ltd [1976] QB 85 distinguishing between not observable damage resulting from human bodily injury and unobservable damage to a building. Lord Fraser said [1983] 2 AC at p 16F:

(Emphasis provided by Lord Fraser). He had in mind circumstances in which no damage to the building had yet occurred and none might ever occur.

An analysis of the facts of the present case, in my opinion, discloses a different pattern. The negligent act consists of designing a drainage system which was ab initio inherently faulty. From the moment when the property was handed over to the plaintiffs by the builders the drainage system suffered from an existing physical defect: it was incapable of dealing with foreseeable volumes of water which were to be expected to occur from time to time. No change occurred in the system between that time and the event of the first flood. The effect of the flood was to demonstrate the existence of the physical defect: it did not occasion it. It is of course true that the flood caused physical damage to the building, but, in my judgment, a problem arises in the present case which is not, I think, satisfactorily disposed of by the Pirelli case: that is, whether a cause of action did not accrue upon the handing over of the building in a state which incorporated a physical defect which did not merely give rise to a risk of the occurrence of some physical damage in the future but consisted of or resulted from an error of design which rendered the drainage system inevitably incapable of dealing with foreseeable volumes of water.

The present case is not unlike Tozer Kemsley and Millbourn (Holdings) Ltd v J Jarvis & Sons Ltd, decided by His Honour Judge Sir William Stabb QC on May 5 1983 (unreported) to which Gibson|page:162| LJ has referred and the facts of which he has set out. The negligence in that case consists of the installation in an office block built by contractors for a building owner of a defective heating and air-conditioning plant. The learned judge held that the plant was defectively designed and constructed from the start, just as the drainage system in the present case was defectively designed from the start. He rejected an argument that the case was not one of physical damage to a building but one of economic damage resulting from a defect in the services provided in the building. He accordingly rejected a suggestion that the principle in Pirelli did not apply. His Honour held that the claim was statute-barred, bringing himself within the Pirelli principle by treating the building as a damaged building at the date when it was handed over to the building owner as practically complete, which was more than six years before the issue of the writ. He said:

With deference to His Honour, I think that is playing with words and doing so in a way which disregards the true nature of the facts assumed by Lord Fraser in Pirelli and the basis of Lord Fraser’s reasoning in that case.

In Pirelli various dates at which the cause of action might be held to have accrued were mentioned ([1983] 2 AC at pp 12E and 13B): (1) When the factory owner acted on the advice of the consulting engineer to construct the chimney in the manner which was adopted; (2) when the building of the chimney was completed; (3) when the cracks occurred; and (4) when the plaintiff discovered or ought with reasonable diligence to have discovered that damage had occurred. If any of the first three alternatives was the relevant date, the action was statute-barred. If the fourth alternative was the relevant date, it was not. The decision of the House of Lords was that the fourth alternative was not the relevant date. It was consequently unnecessary to decide which of the three was, but the reasons given by Lord Fraser were such as to show that he thought the relevant date was when the cracks occurred. It seems clear from Lord Fraser’s speech and particularly the passage I have read (p 16F) that he considered that on the facts the latent defect in the chimney did not cause any immediate damage to either the chimney or the plaintiff. He was seeking to identify some date later than the date of the negligent act at which the damage could properly be said to have occurred, thus completing the cause of action.

In the Tozer Kemsley case, on the other hand, Sir William Stabb held that the plaintiff has suffered actionable damage when the plant was installed or, perhaps, rather when the building was handed over with the plant installed. If that was correct in law there was no need to invoke the Pirelli principle.

For my part, I think that it is a misuse of language to describe a building which is constructed to a defective design as a ‘damaged’ building. It may be accurately described as a defective building, but the fact that it incorporates a defect of design does not import that it has suffered any physical damage. But the tort of negligence will not be actionable unless and until the plaintiff has suffered damage. The plaintiff may suffer damage by reason of physical damage to the building or in consequence of actionable loss arising in some other way.

In the present case the contractual duty of the defendants as architects of the new church and hall must undoubtedly have been to design a building complete with all necessary services, suitable and adequate for those uses to which it was intended to be put. In particular the defendants were bound to provide a drainage system capable of accepting and disposing of all foreseeable volumes of water. Their common law duty as expert advisers was to use due care and skill to ensure that whatever drainage system they devised would be adequate to discharge that function. They failed to do so, as subsequent experience showed. By the time when the defect became apparent any action in contract had become statute-barred. Consequently the plaintiffs sued in negligence.

When the building was handed over, the plaintiffs acquired a building which incorporated an existing physical defect: they did not get what the defendants were under a duty to ensure that they would get. It may be said to have been a latent defect, because it may not have been easily discernible, but it was an existing physical defect, not merely a risk that a physical defect might develop in the future. If before any flooding occurred the plaintiffs had become aware of the defect, they could, in my judgment, have thereupon sued in negligence without awaiting the occurrence of physical damage. It would have become demonstrable that the plaintiffs had suffered economic damage in consequence of the defendants’ negligence in the form of the expense to which they would necessarily be put to remedy the defect, or in the form of the reduction of the realisable value of the property. The plaintiffs, in my judgment, unknowingly suffered that economic damage when the building was handed over to them. Their ignorance in this respect, however, would not stop time from running from that time (Cartledge v E Jopling & Sons Ltd [1963] AC 758). So, if I am right in thinking that the plaintiffs suffered damage when the building was handed over, their cause of action accrued then and became statute-barred six years thereafter.

Mr Fernyhough objected to Mr Wright’s taking any point about economic damage because the point was not pleaded nor taken before the learned judge, nor was any evidence led specifically directed to it. For my part, I do not regard this as a sufficient ground for excluding consideration of the point in this court. Damage was pleaded, though economic damage was not particularised. We are not in any way concerned with quantum, except that any damage relied on should, perhaps, be substantiated; but I feel no doubt that any economic damage which the plaintiffs suffered in the present case on the grounds which I have indicated cannot have been less than substantial, and I do not see how any evidence that could have been led on this aspect of the case could have demonstrated otherwise.

For these reasons I for my part would allow this appeal so far as the flooding is concerned.

I should perhaps add some brief observations on some other cases on which Mr Wright placed some reliance.

I do not get any assistance from Howell v Young (1826) 5 B & C 259 or Forster v Outred & Co [1982] 1 WLR 86 for present purposes. They are decided on very different facts.

Junior Books Ltd v Veitchi Ltd [1983] 1 AC 520 was not concerned with limitation of action. It did relate to economic loss but is not, I think, authoritative on any point which arises in this case.

Ketteman v Hansel Properties Ltd [1984] 1 WLR 1274 was a case concerned with foundations to certain houses which proved to be inadequate when the very hot and dry summer of 1976 caused the ground to shrink, thus occasioning cracks in the walls. The Pirelli case was held to govern the position. The case was one in which, in my view correctly, the houses were regarded as having suffered initially merely from a risk that damage might occur thereafter.

I turn now to the minor claim in the present case relating to the absence of a vertical damp course adjacent to the steps leading down to the lower entrances to the building. This defect of design seems to me very similar in character to that in question in Ketteman. The lack of the damp course gave rise to a risk of future physical damage resulting from percolation through the walls flanking the steps. True, it might be argued that by reason of the absence of a vertical damp course the plaintiffs did not get what they were entitled to expect but the inevitability of the plaintiffs suffering consequential damage would not, in my opinion, be nearly so clear as in the case of the drainage system. In my judgment, the damp-course defect falls on the Ketteman side of the line. Consequently, on this part of the present case I agree with the judgment of Ralph Gibson LJ. I think that on this head of claim the cause of action was not complete until physical damage to the building occurred.

On the question of the burden of proof of when a cause of action accrued which is claimed to be statute-barred, I agree that on the authorities referred to by Ralph Gibson LJ the plaintiff must first show that on the balance of probability his cause of action arose within the limitation period, and that, if he does so, the burden shifts to the defendant to show that in truth the cause of action arose at an earlier date.

The learned judge, who was not referred to authorities, proceeded on the basis that the primary onus of proof lay upon the defendants and he held that they had not discharged that burden because on the evidence he was uncertain whether damp had first reached the internal plaster by February 1971 or thereafter. If, as I think, the burden of proof rests primarily on the plaintiffs, the decision must go the other way, that is to say, on the basis that the plaintiffs have not discharged the primary burden of establishing that on the balance of probability the damp first reached the plaster later than February 1 1971. It is regrettable, in my view, to decide this part of the case on a question of the burden of proof, particularly where, as it seems to me, apart from authority the question appears to be at least a debatable|page:163| one, but I think we are bound by the decision of this court in Cartledge v E Jopling & Sons Ltd (supra).

For these reasons I would allow this appeal in its entirety.

Agreeing with Ralph Gibson LJ on both issues, O’CONNOR LJ said: I agree that the plaintiffs’ claim arising out of the negligent design of the drainage system is not statute-barred for the reasons given by Ralph Gibson LJ.

I wish to add a few words on the concept of ‘doomed from the start’ as an exception to the general rule that in building cases the cause of action accrues when physical damage to the building occurs. It is clear from Pirelli itself that the fact that physical damage is inevitable is not enough to trigger the exception: Lord Fraser drew a distinction between a defect in a building and physical damage supervening. This is said in the context of a claim against consulting engineers for negligent design that is the same as the claim in the present case. For convenience I repeat the passage in Lord Fraser’s speech [1983] 2 AC at p 16:

When distinguishing the solicitors’ negligence cases he said at p 18:

It seems to me that, except perhaps where the advice of an architect or consulting engineer leads to the erection of a building which is so defective as to be doomed from the start, the cause of action accrues only when physical damage occurs to the building.

In the three-and-a-half years since the decision in Pirelli there has been no shortage of cases where defendants have tried to persuade the court to apply the exception. We have been referred to Ketteman v Hansel Properties [1984] 1 WLR 1274 in this court, Dove v Banhams Patent Locks Ltd [1983] 1 WLR 1436, and to a number of unreported cases, including Jones v Stroud District Council CA May 1986* and Bromley London Borough v Rush & Tompkins Ltd OR March 1985 (Sir William Stabb QC). Ketteman and Jones were both foundation cases; held not within the exception. Dove was an anti-burglar gate which offered no useful resistance to the burglary; held not within the exception. Bromley was corrosion in reinforcement bars causing concrete to crack and spall; held not within the exception.

*Editor’s note: Now reported at p 133 ante and (1986) 279 EG 213.

It is thought that the phrase ‘doomed from the start’ has its origin in the judgment of Megaw LJ in Batty v Metropolitan Property Realisations Ltd [1978] 1 QB 554, which was cited in argument in Pirelli by Mr Wright:

In Batty . . . the date of accrual of the cause of action was not in issue, and nothing was said about discoverability. The meaning of ‘imminent’ in Anns was explained. One point that emerges from the case is that the cause of action there must certainly have arisen when the building became dangerous to human habitation. The defendants would say that in fact it arose earlier, when the building was built on an unstable site.

In that case a house was built in 1969-70 on the side of a steep hill which turned out to be geologically unstable. In 1974 a landslip occurred and part of the garden was carried away but the house remained undamaged. The evidence was that the strata were such that a further slip would occur within 10 years and carry away the house. Crichton J had given judgment in July 1976 and no question of limitation arose. Megaw LJ said at p 562:

The gravity of that litigation — its seriousness for the parties — will become apparent when I recount that it was held by Crichton J, from whose judgment this appeal is brought, that the plaintiffs’ house is doomed; and the finding on that issue, though it was the subject of much conflicting evidence at the trial, is not now disputed or challenged. At some time not later than 10 years from the date of the trial, possibly much earlier, the movement of the strata on the hillside on the slopes adjacent to the plaintiffs’ house will cause the foundations of that house to slide down the hill and the house will be in ruins. Already, of course, in those circumstances, the house is unsaleable.

The defendant builders submitted that no cause of action in negligence could arise against them until the house suffered physical damage or alternatively when the state of the building was such that there was a present or imminent danger to health or safety of persons occupying it (Anns v Merton London Borough Council [1978] AC 728 at p 760). The court held that if physical damage was necessary the damage to the garden satisfied the requirement but that in any event there was imminent danger to the safety of the occupants. Megaw LJ said at p 571:

Why should this not be treated as being a case of imminent danger to the safety and health of people occupying the house? No one knows, or can say with certainty — not even the greatest expert — whether the foundations of the house will move and the house perhaps suddenly tumble tomorrow, or in a year’s time, or in three years’ time, or in 10 years’ time. The law, in my judgment, is not so foolish as to say that a cause of action against the builder does not arise in those circumstances because there is no imminent danger. I would reject that submission.

In Ketteman v Hansel Properties Ltd houses were built between June 1973 and June 1975. Cracks due to faulty foundations appeared in August 1976. The writ was issued in July 1982. Lawton LJ said at p 1288:

I turn now to the architects’ submission that, notwithstanding the application of the ‘relation back’ theory, all the plaintiffs’ claims were statute-barred because their houses were ‘doomed from the start’. The plans and siting being faulty, the foundations were bound to settle, thereby causing structural damage. The first question to be decided might perhaps be what was the start — the depositing of the plans with the local authority? The completion of the foundations? The completion of the houses? I do not find it necessary to decide when the start was because I am satisfied that this case, on its facts, must be decided in the same way as Pirelli General Cable Works Ltd v Oscar Faber & Partners [1983] 2 AC 1 was, namely, that the plaintiffs’ causes of action accrued when the physical damage to their houses occurred. In the Pirelli case the subject matter of the dispute was a chimney, 160 feet high, for which the defendants accepted responsibility for the way it had been designed. Unsuitable materials had been used in its construction. Damage in the form of cracks near the top of the chimney must have occurred within about 10 months of the building work being finished and about eight years before a writ was issued. The damage could, with reasonable diligence, have been discovered about two years after it occurred, but was not discovered until seven years later. The issue was, when did Pirelli’s cause of action accrue? The trial judge found that, as a consequence of the use of unsuitable materials, ‘cracks were . . . bound to occur’. Nevertheless, it is clear that Lord Fraser of Tullybelton did not consider this finding was such as to justify his adjudging that the chimney was ‘doomed from the start’. In the two passages, at pp 16 and 18, he used the word ‘perhaps’ in relation to their existence. He said, at p 16: ‘Such cases, if they exist, would be exceptional.’ The facts out of which the plaintiffs’ claims arise are broadly similar to those in the Pirelli case. They are not exceptional — if anything, all too common. Lord Fraser’s reference to buildings which were doomed from the start was not necessary for the decision he made. I would regard it as a cautionary dictum so as to leave for future consideration problems which might arise in exceptional cases.

There remains a further problem arising out of the plaintiffs’ claims against the architects. The trial judge dismissed the third and fourth plaintiffs’ claims. He found that they had noticed the cracks when they returned from holiday which, in the case of the third plaintiff, was on August 11 1976, and in that of the fourth plaintiff on, or a few days before September 3 1976. As they had not said how long they had been away, they had not proved that the cracks had occurred on or after July 30 1976 which he had, in my judgment wrongly fixed as the beginning of the limitation period. Having regard to the operation of the ‘relation back’ theory, the limitation period began on May 27 1974.

I do not think that the defect in the present case can be described as ‘so gross that the building was doomed from the start’ and make this an example of the possible exceptional cases envisaged by Lord Fraser in his dictum. All that was said in Batty relates I think to the position after the first landslip; it is from that time that the undamaged house was ‘doomed’ that is much like the first surcharge in the present case. It might not have happened for a long time.

I see no reason for speculating what manner of exceptional case Lord Fraser had in mind. Until the law is altered by statute the cases have now established that when physical damage results from a hidden defect the cause of action accrues when the physical damage occurs even though it is not then discovered or reasonably discoverable.

I agree with Ralph Gibson LJ that the defendants are entitled to succeed on their appeal in respect of damage due to the lack of a damp course for the reasons given by him.

The appeal was allowed in respect of the damage due to the lack of a damp course, but dismissed on the main issue. By agreement this resulted in the judgment sum being reduced by £7,020. Respondents were awarded seven-eighths of their costs in the Court of Appeal. Leave to appeal was refused, but a stay of execution was granted on terms of an application for leave to appeal to the House of Lords being lodged within due time.

Petition for leave to appeal to the House of Lords was refused on November 5 1986.

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