Limitation and the RIBA Conditions of Engagement
The following case analysed Article 5 of the RIBA Conditions of Engagement for the appointment of an Architect, CE/95:
Article 5 provided:
“No ... proceedings... shall be commenced against the Architect after the expiry of [•] years from ... the date of Practical Completion of the Project.”
The parties inserted “six” into the space provided.
What was the effect of this provision?
The Oxford Architects Partnership v The Cheltenham Ladies College  EWHC 3156 (TCC) Practical Completion occurred on 25 November 1998. The employer served an arbitration notice on 24 November 2004. The arbitrator held that the actions against the architect were not statute barred since they had been commenced within six years from the date of Practical Completion of the Works, which was within the limitation period agreed between the parties in Article 5.
The architect appealed on a question of law under section 69 of the Arbitration Act 1996, arguing that the employer’s claims were statute barred under the Limitation Act 1980.
How does Article 5 operate?
The judge considered two scenarios. In each, a cause of action accrued one year before Practical Completion. In the first scenario, the contract was under seal, so there was a twelve year limitation period under the Limitation Act 1980. In this case, the statutory limitation period would expire eleven years after Practical Completion; but Article 5 shortened the statutory limitation period to six years after Practical Completion.
In the second scenario, the contract was under hand, so there was a six year limitation period under the Limitation Act 1980. In this case, the statutory limitation period would expire five years after Practical Completion; but did Article 5 apply so as to lengthen the statutory limitation period (to six years after Practical Completion)?
In other words, could Article 5 allow the employer a longer period to bring proceedings, even though such proceedings would be statute barred under the Limitation Act 1980?
Article 5 limits, but does not extend the limitation period
The judge held that Article 5 was concerned with limiting, not extending, the ability of employers to bring proceedings. It could not be read as providing that proceedings might be commenced up to six years following Practical Completion even if the proceedings would otherwise be statute- barred under the Limitation Act 1980. A provision which sought to exclude a party’s right to rely on a statutory limitation defence would have to do so in clear terms (which Article 5 did not).
As a result of this finding, the judge needed to consider whether each of the employer’s claims against the architect was time barred, by ascertaining:
- when the relevant cause of action arose; and therefore
- when the six year limitation period (under the Limitation Act 1980) expired.
When did a cause of action against an architect arise in contract?
The judge noted that it was sometimes said that the contractor and the architect owed a continuing contractual duty to the employer until at least Practical Completion. The result of this continuing duty was that, for the purpose of the Limitation Act 1980, the cause of action would not arise until at least Practical Completion (possibly later).
The judge considered that confusion surrounded this continuing obligation. He drew a distinction between the position of a contractor (who was obliged to ‘complete’ the works) and an architect (whose duties depended upon the terms of its engagement). It did not necessarily follow that the architect had a continuing duty until Practical Completion.
Taking an example, if the architect was in breach of contract by producing a defective design, a breach of contract would occur when the architect prepared production drawings or provided production information. The architect did not continue - up until Practical Completion - to be in breach of its obligation by producing a defective design. After producing the defective design, the architect might be in breach of a different obligation - its obligation to review its design. This would be a different breach of contract, and would therefore result in a different cause of action accruing, on a different date.
When did a cause of action against an architect arise in tort?
On the basis of Pirelli General Cable Works Limited v Oscar Faber & Partners  2 AC at 1 - which the Court of Appeal has decided remains binding authority unless overturned by the House of Lords - the appropriate date of accrual of a cause of action was the date when the physical damage occurred.
In this case, the cause of action in negligence would have arisen during the course of construction - when the alleged defects arose - even though the employer did not obtain possession of the building until Practical Completion.
Were the claims in this case statute-barred?
One of the employer’s claims was statute-barred since, in contract and in tort, it was clear that the cause of action had arisen more than six years prior to the date on which the employer served its notice of arbitration (i.e. it had arisen prior to 24 November 1998). The other two claims required further investigation: they would be statute barred if they were based on breaches of contract which had occurred prior to 24 November 1998 or, in so far as the claims were based on negligence, if the relevant physical damage had occurred prior to 24 November 1998.
Similar wording to Article 5 of RIBA CE/95 is contained in RIBA CE/99 and SFA/99.
Employers may be happy to include a provision such as Article 5 in their appointments of professionals, thinking that the provision simply reflects the position at law - of a six year limitation period (if the contract is executed under hand); and a 12 year limitation period (if the contract is executed under seal).
This case demonstrates:
- Article 5 does not necessarily reflect the limitation period that would otherwise apply at law because the cause of action against the architect may - or may not - arise at Practical Completion.
- Article 5 limits, but will not extend, the statutory limitation period. It only operates to the advantage of the architect.