The Statute of Limitations 1957 prescribes a six-year time limit for property damage claims founded in negligence. That might sound straightforward, but in practice it has never been very clear when the clock starts to run. Should it be the date the wrongful act is committed, the date the damage is discovered, or some other date?
The Supreme Court addressed this very question in the recent case of Brandley & Ors v Deane & Ors.
The facts of the case are surely not uncommon. The defendant contractor and consulting engineer had respectively installed and certified the foundations for a terrace of three houses. Two of the houses developed cracks over a year later. The plaintiff developer eventually brought proceedings alleging negligence.
It is worth setting out the key dates in full:
- The foundations were completed in March 2004.
- The consulting engineer, Mr. Hubert Deane, issued his certificate of compliance with planning permission and building regulations on 4 September 2004.
- The houses were completed in January/February 2005.
- The plaintiff, Mr. Brandley, observed that cracks had appeared in each of the houses in December 2005.
- Mr. Brandley and his company WJB Developments issued a Plenary Summons on 30 November 2010.
The defendants freely admitted negligence. They also admitted that the defect in the foundations could have been identified at any time from the moment the foundations were laid, had they been properly inspected. Their defence rested entirely on the claim that the case against them was statute-barred.
Clearly, the Plenary Summons was issued more than six years after the foundations were completed and certified, but less than six years after the cracks appeared. The Supreme Court was asked to decide the date on which the clock began to run.
The Supreme Court carried out an exhaustive review of the law on statute issues in property claims and identified five potential start dates:
- When the wrongful act was committed.
- When the damage occurred, regardless of whether it was manifest.
- When the damage was manifest.
- When the damage could reasonably have been discovered.
- When the damage was actually discovered.
In its unanimous decision, the Supreme Court firmly rejected the notion that time runs from the date of the wrongful act, or from the date on which the damage reasonably ought to have been discovered or was actually discovered. The Supreme Court concluded that time runs from the date physical damage is manifest (i.e. when it is capable of being discovered by a plaintiff).
Turning to the question of what constitutes damage, the Court drew an important distinction in these types of cases between latent defects (which were not actionable of themselves) and the physical damage that followed that defect. On the evidence before the Court, the latent defects in the foundations did not cause actual physical damage to the buildings until December 2005 when the cracks occurred. That was the time that damage became manifest and thus the claim was not statute-barred.
Insurers and professionals in the property industry should take note of the Supreme Court's clarification of the law. Much will depend on the facts of each claim to determine when damage becomes 'manifest', but it is clearly possible that a contractor can be sued well over six years after it carries out defective work. For the same reason, the ruling is good news for property owners, but they should consider conducting regular surveys to ensure that any damage that manifests itself is identified as early as possible.