In a recent case, the Supreme Court has confirmed that time starts to run for limitation purposes in property damage claims based on negligence from the date when the damage is manifest.
In Brandley v Deane1 a property developer brought proceedings in negligence against a consulting engineer and a building contractor when cracks appeared in certain properties. They had been retained to work on their construction. They admitted negligence but pleaded that the claim was statute barred as time had started to run against the plaintiff from the time defective foundations were laid and the plenary summons had issued more than six years after that date.
The question for the Supreme Court was: when does time run for the purposes of the Statute of Limitations for property damage claims founded in the tort of negligence? Two additional questions were central to any answer here, namely, when did the cause of action in negligence accrue and what constituted actionable “damage” for the purposes of the law of negligence?
The relevant text in the Statute of Limitations provides:
“[A]n action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued.”
McKechnie J identified five distinct potential starting points for the running of the limitation clock:
- Date the wrongful act was committed;
- Date of occurrence of the damage;
- Date of manifestation of the damage;
- Date of discoverability of the damage; and
- Date of actual discovery of the damage.
The first date was invariably the earliest and thus the most favourable to a defendant seeking to rely on the Statute of Limitations, with the other possibilities becoming increasingly preferable to the plaintiff as they moved towards the date of actual discovery. McKechnie J examined each option.
Date the wrongful act was committed: McKechnie J concluded that such a start point was precluded by the very wording of s11(2)(a) itself, which referred to the date of the accrual of the cause of action; clearly, that could not be before any damage had occurred, the same being an essential element of the tort of negligence.
Date of discoverability and date of actual discovery of the damage: The date of discoverability of the damage referred to the date when damage could or ought with reasonable diligence to have been discovered. This was distinct from the date of actual discovery of the damage, although those two dates might sometimes align. The date of discoverability was also distinct from the date of manifestation of damage which referred only to damage which was capable of discovery, whereas the date of discoverability imported an element of the damage being objectively reasonably discoverable, even if it in fact went undiscovered. There was no element of discoverability in the test in property damage claims. Despite the harshness that this could give rise to, such was the law, and it was not open to the court to read a discoverability test into s11(2)(a) even if it was minded to.
Date of occurrence or date of manifestation of the damage: McKechnie J noted that whilst the meaning of “occurred” was straightforward, it was not so easy to pin down precisely what was meant by “manifest”, and especially how one might differentiate it from the “discoverability test”. From the case law, he understood “manifest” to mean the date on which damage was capable of being discovered and proved by a plaintiff.
When interpreting an identical provision in respect of a personal injuries case, in Hegarty v O’Loughran2 the Supreme Court had decided that the relevant start date in personal injuries cases was the date on which the personal injury was manifest. There was no reason why this date should not also be the proper start point in property damage claims, particularly as it was well understood that the potential for injustice to a plaintiff was every bit as real in such cases as in personal injuries claims.
What constitutes damage?
McKechnie J accepted that there was a definite distinction between a “defect” and the subsequent damage which it caused. Time ran from the manifestation of damage, rather than of the underlying defect. Thus it was not the latent defect which needed to be capable of discovery: it was the subsequent physical damage caused by that latent defect.