Thomas & Anor v Taylor Wimpey Developments Ltd & Ors [2019] EWHC 1134 (TCC)

Background

Claimants, Mr & Mrs Thomas, purchased properties from Taylor Wimpey (TW), on the 19^th of January 2007. Those properties came with the benefit of a 10 year warranty from the National House Building Council (NHBC). The claimants issued proceedings against both TW and NHBC on 25 January 2018.

The claims arise from the allegation that the log retaining walls at the rear of the back gardens of the purchased properties were inadequately built and defective. Claims were made against TW for breach of their duty of care at common law, misrepresentation and breach of Defective Premises Act. The claimants also sought to recover from their insurer on the basis that the defect in the walls fell within the scope of the Benchmark Warranty and that NHBC had therefore wrongfully refused to cover remedial works.

The present case was a trial to determine preliminary issues concerning the liability of TW and NHBC. There were three main preliminary issues:

1. First, did TW owe the claimants a duty of care in negligence for the loss and damage that the claimants allege?
2. Second, was the claim against TW in misrepresentation/ under section 1 of the Defective Premises Act barred by expiry of the limitation period?
3. Third, did the defects in the log retaining walls fall within the scope of the Benchmark Warranty?

Decision

HHJ Keyser QC, sitting in the TCC, held on the preliminary issues that:

• TW did not owe the claimants a duty of care in negligence for the loss caused by the defective log retaining walls.
• The claim against TW in misrepresentation and under section 1 of the Defective Premises Act was barred as a result of the expiry of the limitation period and;
• That the defects in the log retaining walls fell outside the scope of the Benchmark Warranty.

I. Duty of care in negligence

The general rule, established in Murphy v Brentwood District Council [1991] AC 398, was that no duty of care was owed for negligence for the remedial cost incurred in remedying a building defect. This is because the inherent damage to the building is purely economic.

The claimants acknowledged the general rule but relied on Lord Bridge’s dictum in Murphy at 475G-H:

“The only qualification I would make to [the general rule] is that, if a building stands so close to the boundary of the building owner’s land that after discovery of the dangerous defect it remains a potential source of injury to persons or property on neighbouring land or on the highway, the building owner ought, in principle, to be entitled to recover in tort from the negligent builder the cost of obviating the danger, whether by repair or by demolition, so far as that cost is necessarily incurred in order to protect himself from potential liability to third parties.”

However, HHJ Keyser QC, after reviewing the authorities, found that Lord Bridge’s qualification was unsupported by any other authorities except for a first instance decision in Morse v Barratt (Leeds) Ltd (1993) 9 Const LJ 158 . However, that decision was not supported by any persuasive analysis.

Moreover, he considered that the qualification was not consistent with the present state of the law. It was inconsistent with the decision in Robinson which recognised no other basis for liability for pure economic loss in tort, other than on the basis of an assumption of responsibility. There was also no compelling policy justification for the qualification as builders responsible for defects that pose risks to personal injury would be liable under either contract or the Defective Premises Act.

It followed that Lord Bridge’s qualification was not good law. Therefore no duty of care was owed here for economic loss. Further, the alleged loss did not purport to have any relation to the obviating of the risk of personal injury to third parties on the land, so the case would not have fallen within the qualification in any event.

II. Limitation

On the issue of limitation, it had been argued by the defendant, TW, that the claims for misrepresentation and under the Defective Premises Act were barred under the Limitation Act 1980. This was because any claim for negligence or misrepresentation had accrued by 8 February 2006, when the claimants had entered into the contracts of sale for the purchase of the properties. Likewise, the claim under section 1 of the DPA had accrued by February 2006 when the properties had been completed. By the time proceedings were issued in 2018, this exceeded the six years from the date of accrual and limitation had expired.

The only response of the claimants at the time was that they became aware of the defect on 27 January 2015, as that was the date when the claimants were told of the collapse of the wall. Applying Section 14A of the Limitation Act 1980, the limitation period therefore only expired on 27 January 2018 so that the proceedings had been issued in time.

However Section 14A of the Limitation Act 1980 only applied to claims in negligence. It did not apply to section 1 of the DPA. As for the claim for misrepresentation, what was advanced in the statement of case was not a claim for negligent misrepresentation or statutory misrepresentation under section 2(1) of the Misrepresentation Act 1967. It followed that both claims were time-barred.

III. NHBC Benchmark Warranty

Finally, there were a number of preliminary issues that had to be addressed in order to determine whether liability arose under the NHBC Benchmark Warranty.

It was submitted by the claimants that the insurer was liable under section 3 of the Benchmark Warranty and/or section 4.

Section 3 set out the extent of the cover in the policy for remedying physical damage in the property. It provided that that the full cost could be recovered for a defect in category A, which included, ‘retaining walls necessary for the structural stability of the house, bungalow, flat, maisonette, its garage or other permanent outbuilding.’

However, HHJ Keyser QC found that the log retaining walls were not necessary to the structural stability of the properties in the way that was required by section 3.

Nor was section 4 of the Benchmark Warranty applicable. That section provided that NHBC would pay for repair works if such repairs were needed where there was a present danger to health and safety of the occupants due to non-compliance with the Building Regulations that applied to the work at the time of construction.

The Building Regulations were not applicable to the defective log retaining walls, however, as the regulations only applied to the erection or extension of a building. The log retaining walls were not part of a building on the plot at all but constituted separate structures. It was therefore not possible for there to have been non-compliance with the Building Regulations in relation to the log retaining walls.

Comment

The main point to take away from this case is HHJ Keyser’s rejection of Lord Bridge’s qualification in Murphy. That qualification was obiter, but the present decision is a useful confirmation that it is not good law.

As HHJ Keyser correctly identified, there was no strong policy justification for an exception to the general rule that no duty of care arose in respect of building defects. In the first place it would be unusual if the building owner was left without a remedy. If repairs on the part of the owner were truly necessary in order to protect the owner from the risk of third party liability, then it is likely that the contractor would be liable under the Defective Premises Act.

If the repairs were unsuccessful such that the risk materialises then the owner’s liability to that third party would be appropriately balanced, in any event, by a claim in contribution against the contractor under the Civil Liability (Contribution) Act 1978. In both instances, there is no lacuna in the law. The building owner is not left without a remedy.