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Sportcity 4 Management & others v Countryside Properties [2020] EWHC 1591 (TCC)

His Honour Judge Eyre QC

Summary

The High Court has held that for the purposes of a claim under section 1, Defective Premises Act 1972 neither the performance of remedial work nor the failure to perform any such work operates to extend the limitation period in respect of the original defective construction work.

Background

The claim arose in relation to seven apartment blocks in the SportCity development in Manchester, which were constructed by the Defendant in around 2002. The freeholder of the development, Manchester City Council, demised the land by three 250-year leases to AMEC Developments Ltd. AMEC then granted occupational leases of the apartments to individual leaseholders. The Defendant and the relevant management company were both parties to the leases. In October 2008 AMEC assigned each of the head leases to the relevant management companies.

The claim alleged that there were various defects in the blocks, including inadequate internal fire stopping measures and problems with the external cladding. The Claimants sought £15M damages for negligence, breach of covenants in the occupational leases and breach of section 1 of the Defective Premises Act 1972 (“DPA 1972”).  The Defendant defended the claim on the basis any negligence claim was a claim for pure economic loss; it was not the party which had given the relevant covenants (which was the landlord under each of the leases), and that any claim under s. 1 was barred by limitation.

In their Reply the Claimants sought to rely upon the works undertaken in 2014 and the visit in 2017 (in which no works were undertaken).  The Claimants alleged that in late 2013 the managing agents raised unrelated concerns about cladding on the blocks.  The Defendants did not accept that there were issues with the cladding, but had attended the development in March and April 2014 to re-fix some roof cappings which had been dislodged in a storm.  In August 2017 the Defendants had attended an inspection of the cladding at one of the buildings, but had done no work.

The defendant applied for summary judgment and/or for the claim to be struck out.

High Court Judgment

Construction of the leases

The Claimants’ argument that the Defendant was the landlord under the leases was untenable and had no real prospect of success. Simply because the leases gave the Defendant rights that would typically be exercised by a landlord did not, without more, mean that the Defendant was to be treated as the landlord under the leases. The Defendant was a party to the leases but not a party to, nor liable for, the landlord covenants.

Limitation and s.1(5), DPA 1972

The pleaded claim under s.1, DPA 1972 asserted a breach of duty in respect of the original construction works that were completed in 2010 or before, much more than 6 years before the issue of the claim. The effect of s.1(5), DPA 1972 was that further remedial works might give rise to a new cause of action.  It did not extend time in respect of the original alleged breach.  Nor did section 1(5) restart the limitation clock so as to restore a cause of action that was already statute-barred. In the present case, the Claimants had not pleaded any cause of action in respect of the 2014 works or the 2017 inspection in their particulars of claim. They could not raise new causes of action in their Reply. The only claim pleaded under s.1, DPA 1972 was therefore statute barred.

Negligence and pure economic loss

The Claimants sought to recover damages for the costs of remedying the buildings which they owned and were said to be defectively constructed. These were claims for pure economic loss, and the Defendant owed no duty of care to protect the Claimants from pure economic loss.

The Defendant was therefore entitled to summary judgment in respect of all the claims, which were dismissed.

Toby Watkin represented the successful Defendant.

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