Negligence — Limitation Act 1980, section 14A(4)(b) — Whether plaintiff’s knowledge that survey report contained one omission was knowledge of negligence sufficient to bring action in respect of other omissions
On June 6 1983
the plaintiff exchange contracts for the purchase of 49 Sark Road, Old Swan,
Liverpool, in reliance, he contended, on a report provided by the defendant
firm of surveyors to Abbey National Building Society; the society provided the
plaintiff with a loan. The report failed to refer to tracking over a front bay
window in the region of a lintel, a serious bulge in the gable wall and a
leaning chimney. Before he exchanged contracts the plaintiff observed the
cracking, but did not appreciate its significance until he obtained a further
report in 1989 indicating that the lintel needed replacing. He also observed
the leaning chimney and had it rebuilt. Proceedings were issued claiming
damages for negligence in December 1989. At the trial of a preliminary issue,
it was agreed that the cause of action arose on June 6 1983; the question was
whether the plaintiff was entitled to rely upon the extended period of three
years referred to in section 14A(4)(b) of the Limitation Act 1980 in
relation to the defects in the building of which he was unaware until the 1989
report, because by December 1989 the six-year period of limitation had expired.
damage, the existence of which the plaintiff was alerted only by a survey in
1989. That was when he first had knowledge required for bring an action as
required by section 14A(4)(b) of the 1980 Act. The omission in the 1983
report of any reference to the leaning chimney was not sufficient to show that
the plaintiff then had some knowledge of negligence by the defendant.
The following
cases are referred to in this report.
Bristow v Grout The Times, November 3 1986
Miller v London Electrical Manufacturing Co Ltd [1976] 2 Lloyd’s
Rep 284, CA
Wilkinson v Ancliff (BLT) Ltd [1986] 1 WLR 1352; [1986] 3 All ER 427,
CA
This was a
trial of a preliminary issue in proceedings by the plaintiff, Mark Stephen
Felton, against the defendant, Gaskill Osborne & Co, for damages for
negligence.
David Knifton
(instructed by David Phillips & Partners, of Liverpool) appeared for the
plaintiff; Christopher Tetlow (instructed by James Chapman & Co, of
Manchester) represented the defendant.
Giving
judgment, JUDGE O’DONOGHUE said: Early in 1983 the plaintiff became
interested in purchasing the dwelling-house situate and known as 49 Sark Road,
Old Swan, Liverpool (the house). He approached Abbey National Building Society
for a loan to enable him to do so. The building society instructed the
defendant firm of surveyors and valuers to inspect the house.
On February 1
1983 a member of the defendant firm inspected the house and in due course
delivered to the building society a document dated February 2 1983 headed
‘Report and mortgage valuation’ (the report). The report contained a ‘Gross
value for mortgage purposes’ of £15,000, which figure was expressed to be given
upon the assumption that certain ‘essential repairs’ listed in section II of
the report would be satisfactorily completed. Section II listed nine ‘Repairs
recommended as a condition of the mortgage’, the last of which read ‘Remedy the
damp to the ground floor walls . . .’.
The report
contained a recommendation that ‘. . . a guarantee be obtained in respect of
the damp proof course and floor timbers . . .’.
It is common
ground that the report did not refer to:
(1) cracking over a front bay window of the house
in the region of a lintel or beam above that window (which beam is known as a
‘bressummer beam’);
(2) a serious bulge of some 30mm in the gable-end
wall of the house;
(3) a chimney stack which was leaning.
The plaintiff
says that he read the report before June 6 1983. On that date he exchanged
contracts to purchase the house at the price of £15,000. The plaintiff says
that he relied upon the report when he entered into this contract to purchase
the house and that before he exchanged contracts he could see that the chimney
stack was leaning. He says also he was later content to pay £75 to a contractor
to reduce the size of this stack and thereby make it good.
The plaintiff
says further that, before he exchanged contracts, he observed some cracking in
the area of the top of the bay window, but that he had not then appreciated
that this cracking was due to the condition of the bressummer beam or that this
beam was defective and would need to be renewed. He says, finally, that he did
not appreciate the true state of the beam nor did he know of the bulge in the
gable wall until these two matters had been pointed out to him by a survey
obtained early in 1989 by a prospective purchaser, which had caused him to
obtain his own structural report, being that of William Jones & Partners
dated May 17 1989.
As a result
the plaintiff caused particulars of claim to be issued on December 15 1989
claiming, inter alia, damages for negligence against the defendant firm
in failing to detect and to warn him of:
(a) the bulge in the gable wall
(b) the leaning chimney stack
(c) the cracking above the bay window
(d) the damp needing further treatment.
Counsel for
the plaintiff and for the defendant firm agree that, for purposes of subsection
(4)(a) of section 14A of the Limitation Act 1980, the cause of action in
respect of any such negligence would have accrued to the plaintiff at the date
when he exchanged contracts to purchase on June 6 1983.
Accordingly,
there is no doubt that in the case of the leaning chimney stack (which was
visible at all material times), the plaintiff was either not misled by the
defendant firm’s report (since he had, prior to exchange of contracts, well
appreciated that it did lean and that it would need attention) or, if he had
been misled in any way by the failure of the report to refer to the chimney
stack, any claim which he might have for negligence in the report became
statute-barred after six years, namely on June 6 1989.
Similarly, it
is clear that the plaintiff was well aware of the existence of the dampness at
all material times and that he did not bother to inquire and to assure himself
that proper steps had been taken to deal with it.
Accordingly,
even though the particulars of claim seek damages in respect of these matters,
counsel for the plaintiff has thought it proper to abandon such claims and
will, if necessary, amend his particulars of claim by striking them out.
The
preliminary point, which has now been raised by the parties, is whether the plaintiff
is entitled to rely upon the extended period of three years referred to in
section 14A(4)(b) of the 1980 Act in relation to his claim for damages
in respect of the bulge in the gable wall and also in respect of the condition
of the bressummer beam, both of which matters he says he was unaware of until
he obtained his structural survey report dated May 17 1989.
Section 14A of
the 1980 reads as follows:
(1) This section applies to any action for
damages for negligence, other than one to which section 11 of this Act applies,
where the starting date for reckoning the period of limitation under subsection
(4)(b) below falls after the date on which the cause of action accrued.
(2) Section 2 of this Act shall not apply to an
action to which this section applies.
(3) An action to which this section applies shall
not be brought after the expiration of the period applicable in accordance with
subsection (4) below.
(4) That period is either —
(a) six years from the date on which the cause of
action accrued; or
(b) three years from the starting date as defined
by subsection (5) below, if that period expires later than the period mentioned
in paragraph (a) above.
(5) For the purpose of this section, the starting
date for reckoning the period of limitation under subsection (4)(b)
above is the earliest date on which the plaintiff or any person in whom the
cause of action was vested before him first had both the knowledge required for
bringing an action for damages in respect of the relevant damage and a right to
bring such an action.
(6) In subsection (5) above ‘the knowledge
required for bringing an action for damages in respect of the relevant damage’
means knowledge both —
(a) Of the material facts about the damage in
respect of which damages are claimed . . .
In this
regard, counsel for the defendant firm submitted that the plaintiff has one
cause of action only: namely a claim for damages in respect of the negligence
of the defendant in omitting to warn of a number of different matters in the
1983 report and that this is a single cause of action notwithstanding that it
involves failure to report on at least four quite separate and distinct
matters.
In short,
counsel for the defendant firm submits that once time begins to run in respect
of failure to report one or more of these matters it would run in respect of
all of them. If this were not the case then, he says, there would be one claim
for damages for an omission or failure to warn in a report to which the
provisions of subsection (4)(a) would apply and a different claim for
damages for an omission or failure to warn in the same report to which the
provisions of subsection (4)(b) would apply, depending upon the moment
of time when the true facts relating to the omission or failure came to the
knowledge of the plaintiff. Both counsel indicated that they had searched
diligently, but had failed to find any authority bearing directly upon the
construction of the provisions of section 14A.
Counsel for
the defendant firm, however, referred to several decisions involving claims in
respect of personal injuries: Miller v London Electrical
Manufacturing Co Ltd [1976] 2 Lloyd’s Rep 284. In that case, the plaintiff
had known from 1967 onwards that the defendant company was responsible for his
dermatitis injury and the Court of Appeal held that the fact that he had not
realised until May
a sufficient ground for extending the three-year limitation period prescribed
in section 7 of the Limitation Act 1963 (the new section 2A introduced into the
1963 Act by the Limitation Act 1975 having no application in that case).
Wilkinson v Ancliff (BLT) Ltd [1986] 1 WLR 1352: In that case the
Court of Appeal considered the provisions of section 11(4)(b) and 14(1)(b)
of the Act where the plaintiff had known in November 1981 that the probable
cause of his bronchial asthma was exposure to certain chemicals at work. On
March 7 1984 he had issued a writ seeking damages for personal injuries which
he failed to serve within the period of one year of issue. In June 1984 the
plaintiff had received the report of an analytical chemist which stated the
measures which the defendant company ought to have taken but had failed to take
to protect him. The plaintiff later attempted to serve the writ on March 29
1985. The deputy district judge dismissed the plaintiff’s summons for renewal
and extension of the writ on the grounds that the action had become
statute-barred in the meantime. The judge allowed the plaintiff’s appeal. The
defendant appealed.
Mr M S E
Grime, counsel for the plaintiff, had sought to persuade the court that the
knowledge of the plaintiff had come in four stages, the fourth and final stage
being the receipt of the report of the analytical chemist in June 1984.
Slade LJ (at
p1363) said that the submissions of Mr Grime
. . . do
indeed illustrate that the wording of section 14(1)(b) of the Act of
1980 may raise difficult problems of construction and application in particular
cases . . .
But he then
went on to consider the facts of that particular case and in particular what
knowledge the plaintiff had in November 1981 and said (at p1365):
. . . I think
that the employee who has this broad knowledge (that his employer had exposed
him to dangerous working conditions and had failed to protect him from such
conditions) may well have knowledge of the nature referred to in section 14(1)(b)
sufficient to set time running against him, even though he may not yet have the
knowledge sufficient to enable him or his legal advisers to draft a fully and
comprehensively particularised statement of claim. Mr Grime suggested that the
acquisition of knowledge of additional acts or omissions on the part of his
employers capable of particularising an allegation of breach of duty under
section 14(1)(b) would by itself take the case out of the statute. I
cannot accept this submission. If it were right certainty would never be
achieved in cases such as the present.
Counsel for
the defendant firm also referred to Bristow v Grout The Times
November 3 1986. In that case a plaintiff, who had sustained several injuries
in an accident, made a claim in respect of one of his injuries and subsequently
compromised his claim. Thereafter, he attempted to bring another claim in respect
of another and different injury which he claimed arose from the same accident.
Jupp J found
as a fact that the plaintiff’s knowledge of the new injury for the purposes of
section 14 of the 1980 Act had been acquired only within the period of three years
before the issue of the writ claiming damages for that injury, but he found
that the provisions of section 11 (which referred to the date on which the
plaintiff first had knowledge of the fact that ‘the injury in question’ was
significant and attributable to the defendant’s act or omission) had the effect
of making time run from the moment when one of the injuries was first
known to be ‘significant’ (as defined by section 14(2)) and that, once time had
begun to run, it applied to all injuries.
Counsel for
the defendant firm drew an attractive parallel between these cases and the
facts of the present case.
In those
cases, however, the court was concerned with the provisions of sections 11 and
14 of the 1980 Act (or section 1 of the 1963 Act). The present case, however,
falls within the new provisions of section 14A.
The starting
date for the extra three-year period envisaged by section 14A(4)(b) is
the earliest date on which the plaintiff first had ‘the knowledge required for
bringing an action in damages’. This knowledge is further defined by subsection
(6)(a) as knowledge
. . . of the
material facts about the damage in respect of which damages are
claimed.
(Emphasis
supplied.)
This reference
to ‘the damage’ in respect of which ‘damages are claimed’ suggests to me
strongly that the draftsman was addressing his mind to the particular head of
damage in respect of which the plaintiff seeks to claim damages and not to
‘damage’ in a general sense.
Moreover,
subsection (7) goes on further to define ‘the material facts’ as:
. . . such
facts . . . as would lead a reasonable person . . . to consider it sufficiently
serious to justify his instituting proceedings for damages against a Defendant
. . .
If the
submissions so ably made by counsel for the defendant firm were correct, the
fact that a plaintiff had known that there had been some negligence on
the part of the defendant, but had chosen not to institute proceedings for
damages on the grounds that he could live with that situation, might by this
indulgence be prevented from later instituting proceedings in respect of a far
more serious example of negligence of which he was earlier unaware, giving rise
to a far more serious claim for damages. I hesitate to find that the provisions
of section 14A would produce such a result.
In the present
case, the evidence shows clearly that the plaintiff felt that he could live
with the dampness of which he was well aware when he bought the house and that
he was content to live with the leaning of the chimney stack, of which he was
also well aware and which he repaired at the nominal cost of £75.
The fact that
some other person might have seen fit to institute proceedings against the
defendant firm’s failure to refer to the leaning chimney stack in this report
ought not, in my judgment, to disbar a plaintiff from instituting proceedings
in respect of what would appear to be far more serious omissions giving rise to
far greater damages within the three-year period after he first had knowledge
of these matters.
It seems to me
that the words in subsection (6)(a) — ‘the material facts about the
damage in respect of which damages are claimed’ — are very much in point and
are substantially different from any words which appear in sections 11 or 14.
In the course
of his submission, very fully and ably made, counsel for the defendant firm
also sought to persuade the court that once the plaintiff had realised that the
defendant firm’s report had failed to refer to a defect (such as the leaning
chimney stack) the plaintiff ought to have been alerted to obtaining his own
structural report at an early stage and that his failure to do so in itself
should preclude him from claiming the benefit or protection of section 14A(4)(b).
In other
words, he submitted that on the particular facts of this case this plaintiff
should be fixed with some form of constructive knowledge of the other more
serious matters which the defendant firm had missed in their report.
I cannot
accept that the Act requires that this plaintiff should be deemed to have
knowledge which he clearly did not have. And I do not consider on the facts of
this case that the defendant firm’s report was so obviously defective as
necessarily to alert the plaintiff to the desirability (still less to the
necessity) of obtaining a further independent report before exchanging
contracts.
As I have
earlier stated, the particulars of claim as originally drafted, and as before
me at present, seek to claim damages not only in respect of the bulge in the
gable wall and the cracking in the front of the elevation (the true facts or
significance of which came to light only in the structural report of May 17
1989) but also for the dampness and the leaning chimney of which the plaintiff
was aware at the date of the exchange of contracts in June 1983.
Counsel for
the plaintiff concedes that these last two heads of damages are both now
statute-barred and cannot be sustained and he now seeks formally to amend the
particulars of claim to exclude them. I feel that it is proper for me to allow
him to do so.
I cannot accept
that the mere inclusion of a claim in respect of heads of damage which are
clearly statute-barred ought necessarily to
which may not be statute-barred. At the end of the day it will be for the trial
judge to determine if the report of the defendant firm does give rise to a
valid claim in negligence and, if so, to what extent damages should properly be
awarded in respect of the particular damage alleged to have been suffered.
But, on this
preliminary question of limitation of action, I am not prepared to hold, on the
evidence before me, that the plaintiff is necessarily statute-barred in respect
of those two heads of damage, to the existence of which he claims he was
alerted only by the prospective purchaser’s survey confirmed by his own
structural survey in May 1989.
