Defects and limitation periods

While the tragedy at Grenfell Tower and the subsequent inquiry have focused attention on issues related to defective and unsafe buildings, in particular problems with cladding, such cases are by no means unknown. Indeed, they have been the subject of court decisions for many years. There is now a renewed focus, however, and recently a number of cases have come before the courts that have been prompted or influenced by the Grenfell tragedy. Such cases will no doubt be a feature of court business for years to come. It is instructive to review some of the more recent ones to note what issues commonly arise and how the courts have been dealing with them. 

The nature of such cases, relating as they often do to defects discovered many years after the building was constructed and sometimes after the original owners or developers have departed, often cause difficulties for claimants. Such difficulties often focus upon issues in relation to limitation if the claims are started close to or beyond the expiry of the relevant limitation period.    

This is an important issue because, broadly, the expiry of a limitation period within which claims can be started in the court is an absolute defence to any such claim. This defence can, however, be overcome if it can be shown that the defendant has deliberately concealed facts that were relevant to the claimant’s cause of action.

This is an important issue because, broadly, the expiry of a limitation period within which claims can be started in the court is an absolute defence to any such claim

Importantly, this will be the case even if the defendant had already acquired a limitation defence before the concealment took place. This principle was reiterated in the decision in RG Securities (No. 2) Ltd vs Allianz Global Corporate and Specialty CE [2020] EHWC 1646 (TCC). If deliberate concealment can be proven, the limitation period will be taken to run from the date when the concealment was discovered. 

Perhaps the most interesting recent decision in relation to limitation issues, again arising out of cladding defects, was Martlet Homes Ltd vs Mullaley & Co Ltd [2021] EWHC 296 (TCC). In this case, the claimant brought a claim against the defendant contractor for breach of contract and negligence in respect of certain tower block refurbishment works.

The claim was issued by the claimant a matter of days before the 12-year limitation period expired in relation to two out of the five tower blocks concerned, and less than four months before expiry for two other towers. The claim form and particulars of claim were served just before the claim form expired. As a consequence, any fresh action in respect of any of the towers would be out of time.

This defence can, however, be overcome if it can be shown that the defendant has deliberately concealed facts that were relevant

In its defence the defendant admitted a number of breaches of contract but denied the alleged breaches had caused any loss on the basis that, following the Grenfell Tower fire in June 2017, it was in any event required to replace the combustible expanded polystyrene (EPS) cladding fitted to the towers. In its reply the claimant responded specifically to the EPS issue, effectively saying that even if its other claims failed the claim in relation to the EPS cladding would still stand.  The question was therefore whether this amounted to a new claim rather than simply a response to the defence. It is well established that a claimant cannot raise a new claim or cause of action in its reply.  

The arguments around the application of the Limitation Act and the technicalities of pleading are too lengthy to go into here, but in short the court decided that the relevant paragraphs of the reply had to be struck out because they were indeed a new cause of action. The court, however, granted the claimant permission to amend its particulars of claim to introduce the EPS issue.

The case is well worth reading for its clear and helpful judgment concerning what can and cannot go into a reply and also the interaction between section 35 of the Limitation Act and Civil Procedure Rule 17.4, which permits the court to allow an amendment to add a new claim after the expiry of the limitation period provided it arises out of the same facts or substantially the same facts as “are already in issue” in an existing claim, as was the case here.  

The cladding and defective buildings cases currently before the courts will undoubtedly raise further issues in relation to limitation, as well as other matters such as recovery of claims in tort, health and safety legislation and the application of the Defective Premises Act 1972. In this regard it is also interesting to see the recent decision in Naylor and Others vs Roamquest Ltd and Another [2021] EWHC 567 (TCC), where the court adjourned a strikeout and summary judgment application by the defendants to give the claimants (tenants of a high-rise residential block with defective cladding) the opportunity to amend their pleadings. This is one of a number of cases that no doubt will be followed closely, particularly if it proceeds to trial.

Simon Lewis is a partner in the construction and engineering team at Womble Bond Dickinson