The Court of Appeal has provided clarification of the application of the limitation period in design cases in deciding whether architects were liable for flood damage caused by a defect in the design of a warehouse’s drainage system.

Background

The appellant architects, CPL, were the designers of a warehouse completed in 1990. In 2002 the current lessees of the property, PEL, suffered property damage of approximately £2million when the warehouse flooded after heavy rainfall and sought compensation from CPL. It was found at first instance that CPL had negligently failed to design an adequate rainwater drainage system. In 1994, similar damage had been suffered by a previous tenant of the warehouse, also as a result of a flood caused by heavy rainfall. Loss adjusters instructed then concluded that the flood was caused by the inadequate drainage system; however, this information was never communicated to either CPL or PEL.

On appeal CPL argued: (1)that the first flood broke the chain of causation as it was reasonable to expect that this would lead to identification of the defect; and (2) that any negligence of CPL occurred outside the 15-year limitation period in the Limitation Act 1980 s.14B.

Decision

Negligence

The Court of Appeal found that it was reasonably foreseeable that if CPL caused an inadequate drainage system to be installed in the warehouse, owners of property within it might suffer flooding damage to their property. The test of foreseeability in the context of duty of care did not require foresight of the precise sequence of events that resulted in damage.

PEL neither knew nor should have known of the first flood, so there was no reason why they should carry out any investigation into the adequacy of the rainwater system. The first flood and the inspection to which it gave rise neither placed PEL outside the range of any duty of care owed by CPL nor broke the chain of causation between CPL’s want of care and the damage caused.

Latent damage

The drainage system was designed over 15 years before the claim form was issued, and CPL therefore contended that the claim was time-barred. CPL submitted that the duty had been breached at the time the system was designed, and that no subsequent breach occurred unless it could be demonstrated that there was some trigger which should have caused CPL to review the design capacity. The judge at first instance had held that there were at least two later occasions – which were within the 15-year period – when CPL negligently omitted to check and adopt an appropriate capacity for the rainwater system. The Court of Appeal upheld the judge’s findings, holding that s.14B requires the court to identify the latest date when CPL were responsible for a negligent act or omission to which PEL’s damage could be attributed. The relevant negligent act or omission was that which caused an inadequate drainage system to be incorporated in the building: in this case, specifying to the rainwater system designer and installer a design capacity that CPL should have known was inadequate. This event occurred within the 15-year period and consequently the claim was not statute-barred.

Comment

The Court of Appeal considered its previous decision in Baxall & Norbain v Sheard & others [2002] BLR 100 at some length and was able to distinguish it on the facts. It hinted, however, that Baxall may be overturned if considered by the House of Lords.