Broster raises the bar for claims in tort based on the complex structure theory
As another case using the complex structure theory to support a claim in tort is struck out, what now for the prospects of claims in tort for property damage?
The cost of repairing damage to property itself cannot generally be recovered in tort, because the damage is deemed to be pure economic loss. However, the complex structure theory suggests that the cost of repairing such damage is recoverable where:
- it is possible to identify a distinct component of the building; and
- it damages the rest of the building;
on the basis that that damage constitutes damage to “other property”. This theory has been approved on limited facts, for example, where negligently installed boilers have caused damage to the surrounding building. However, the courts have been reluctant to extend the use of complex structure theory, going so far as to describe the theory as “no longer tenable” (Payne v John Setchell 2002). Notwithstanding, claimants and their insurers continue to argue for the recovery of property damage in tort based on complex structure arguments.
In Covernote issue 4 2010, Adele Farrar and Flora MaCabe analysed complex structure theory and considered the potential impact of Linklaters v McAlpine for insurers underwriting contractors’ design & build policies and consultants’ PI policies. The Court of Appeal had refused to strike out a claim against a thermal pipe insulation sub-contractor where it was alleged that the subcontractor negligently caused the pipes to corrode. The court judged that there was insufficient time for it to come to a full decision as to whether the pipes could be said to constitute “other property”. The court indicated that the complex structure theory “may require the attention of the Supreme Court in due course”, suggesting the courts may be rethinking their stance.
In July this year, the Technology and Construction Court struck out a claim by property owners on the basis that the complex structure theory did not apply (Broster and others v Galliard Docklands Limited and East London Construction Limited). The facts were very different from the Linklaters case.
In Broster, six terraced townhouses were built for a developer, Galliard by their contractor, ECL. The terraced houses had a common roof. ECL failed to strap the joists of that roof to the walls of the properties. Galliard then sold five of the six houses as separate units. In 2005, a storm hit the house, causing the common roof to lift off before falling back onto the top of the walls to the properties, causing extensive damage.
The claimants argued that either the houses themselves were separate property from the roof, so a claim could be made for damage to the houses; or that each of the houses constituted separate property, so a claim could be made that the lack of strapping in each property caused damage to the others.
The court struck the claim out. It said it was artificial to argue that the six houses and their roofs constituted separate properties as they had been built as a single structure. The judge gave a robust judgment, saying that he refused to “shoe-horn the various exploding boiler type exceptions to the rule […] into the type of circumstances which pertain in this case.” He went on to query whether the complex structure theory still has a material role to play in the law of negligence as it relates to building and structures.
This may mark the end of a long chapter for claimants and their insurers seeking to recover damage to homogenous buildings and structures in negligence by arguing artificial distinctions to satisfy the requirement to demonstrate damage to other property to sustain a claim in tort. Claimants and their insurers, in appropriate cases, may still be able to bring such recovery actions under the Defective Premises Act 1972, but the door on complex structure theory is now (almost) shut.