Stuart Pemble considers two deceptively simple questions: what counts as a dwelling, and when is it fit for habitation?
Key points
- The Defective Premises Act 1972 can help purchasers of new property successfully claim damages from the contractor
- The Act is not a universal panacea: each case rests on its own facts
The decision of Edwards-Stuart J in Rendlesham Estates plc & others v Barr Ltd [2014] EWHC 3968 (TCC); [2014] PLSCS 339 is another judicial reminder of the legal difficulties faced by someone looking to recover damages for defective building work in the absence of a contract with the alleged wrongdoer.
What makes it of particular interest, however, is the cunning ruse adopted successfully by the claimants to get around the lack of a contract – relying on the Defective Premises Act 1972 (the 1972 Act). It is thanks to the success of the claim that we have some much-needed judicial guidance on the seemingly simple questions of what constitutes a dwelling and whether that dwelling is fit for habitation. Perhaps surprisingly, both remain elusive concepts to apply in practice.
The facts
Between 2003 and 2006, Barr, the defendant, was the main contractor employed by a developer for two apartment blocks in Concord Street, Leeds. There were numerous problems in the apartments; a situation exacerbated by the fact that the developer went into administration and none of the flat owners had any contract with Barr. Nor does there appear to have been the insurance cover (such as that provided by NHBC) that buyers of new-build properties often enjoy.
The owners of 120 of the 171 apartments commenced proceedings. The facts and proceedings were complicated and the court ordered a hearing about liability for internal defects by reference to the problems faced in eight of the flats.
The 1972 Act
The claimants’ case relied on the provisions of section 1:
“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)… to every person who acquires an interest … in the dwelling;
to see that the work which he takes on is done in a workmanlike or… professional manner, with proper materials and so that … the dwelling will be fit for habitation when completed.”
In order to succeed, the claimants had to show that Barr had done work for or in connection with the provision of dwellings which were not fit for habitation.
What is a dwelling?
Despite a House of Lords decision on the issue (Uratemp Ventures Ltd v Collins [2001] UKHL 43; [2001] 3 EGLR 93), a Law Commission report (Civil Liability of Vendors and Lessors for Defective Premises, Law Com No 40) and various other cases, a legal definition of a dwelling remains elusive. This is in part because of the decision in Uratemp, which emphasised that the word was not a term of art but had to be considered in the context of the legislation in which it appears.
While there was no difficulty in accepting that each separate flat was a dwelling, the claimants also sought recompense in relation to defects in the structural and common parts of the apartment blocks. They therefore tried to persuade the judge that each block of flats should be considered a dwelling for the purposes of the 1972 Act.
That argument failed. The judge felt that a dwelling was “the place where a person or household lives to the exclusion of members of another household”. Because exclusive possession was the key concept, it was impossible to accept that a block of flats as a whole was a single dwelling, since no individual flat owner had exclusive possession of the entire building. Rather, each block should properly be considered as a building containing a number of dwellings.
The meaning of “in connection with the provision of a dwelling”
The claimants were able to overcome that setback. This is because the 1972 Act is not just about dwellings; section 1 actually relates to work in connection with the provision of a dwelling. And, while stressing that his findings on this issue were specific to the facts of the case, Edwards-Stuart J had no difficulty in deciding that the defects were caught by the Act, in part because each apartment had to contribute to the maintenance of the blocks as a whole:
“… it seems to me to be an inescapable conclusion that the work to the structural and common parts of both blocks was work done in connection with the provision of each of the apartments… since the owner of every apartment has an interest in and a financial responsibility for the maintenance of the… structural and common parts of both blocks… [and]… a right of access to the common parts of the other blocks.”
“Fit for habitation”
Having reached that conclusion, the judge had little difficulty in deciding that some of the works had not met the standard of work required (broadly speaking, the work had to comply with the relevant standards and regulations – including Building Regulations – in force when it was carried out) or that some of the defects did make the apartments unfit for habitation. Edwards-Stuart J felt that a dwelling would be fit for habitation if, on completion, it was capable of occupation without a risk to health and safety or undue inconvenience or discomfort to the occupants.
The judge held that the apartment owners were entitled to the costs of correcting the defects but that damages should be paid to the claimants’ solicitors to be held for the benefit of the apartments’ management company, which could then carry out the work.
Stuart Pemble is a partner at Mills & Reeve
