Defective Property
Cases
Ward v. McMaster
[1985] IR 29 Costello J.
H.C.
Introduction
In the summer of 1980 life must have seemed good and full of promise for Mr. Ward, the first named plaintiff herein. He was planning to get married, had the prospect of new employment with a large super-market chain, and had found what he thought was an ideally suitable bungalow on the outskirts of Dundalk in which to live. He paid a £3,000 deposit on it (out of an orally agreed purchase price in July of £24,000) and obtained sanction from the Louth County Council for a loan of £12,000. His troubles then began. Difficulties in regard to the title held up the execution of a formal contract for sale until 30th March, 1981, and a conveyance was not effected until some time later. But he obtained his new job, got married on the 28th November, 1981, and moved into his new bungalow early in December. Then his troubles multiplied. A very serious level of dampness and a smoking chimney first drew the plaintiffs’ attention to the possibility that there were defects in their new house. In August of 1982 their true extent was ascertained. As a result of an inspection carried out by an experienced engineer the plaintiffs then were told that the house was grossly sub-standard, structurally unsound, a source of danger and a risk to health and were advised to leave it. This they did the following October, and thereafter these proceedings were instituted.
The first named defendant built the bungalow and sold it to the plaintiff and the claim which I will firstly examine is that in addition or in the alternative to damages for breach of contract the plaintiff is entitled to damages for breach of a common law duty of care which the defendant owed to him as builder and vendor (arising it is claimed from the neighbour principle established in Donoghue v. Stevenson [1932] A.C. 562). The second named defendant is the local authority which advanced £12,000 to the plaintiff to facilitate the bungalow’s purchase and I will then consider the plaintiff’s claim that this defendant owed a common law duty of care (similarly arising and which they breached) to the plaintiff when exercising their statutory functions when granting the loan. Thirdly, I will examine the claim that the third named defendant, a firm of auctioneers, instructed by the local authority to value the premises before loan sanction was granted, owed a common law duty of care (similarly arising and which they breached) to the plaintiff when carrying out the valuation. Whilst denying liability all defendants have claimed against each other for contribution or indemnity under the provisions of the Civil Liability Act, 1961, claims which I will consider in Part IV of this judgment. By agreement, I will defer to a later date giving any conclusion on the quantum of damages.
Claim against the defendant/builder
(a) The facts
I will here summarise my conclusions on the facts relevant to the plaintiffs’ claim against the first named defendant, then give my view on the legal principles applicable, and finally my conclusions on his liability to pay damages.
The defendant was described in the statement of claim as a builder. In fact, although he built the bungalow which he subsequently sold to the plaintiff, this description of him is inaccurate in so far as it may imply any professional qualifications or experience in the building trade. He had neither. In 1974 he bought the site and when he set about building a bungalow on it with the aid of his father (who he described as a “handyman”) and a brother whose occupation was that of a driver of mechanical equipment. He is now a taxi driver. He sought planning permission for its erection and obtained it on the 25th March, 1975. This contained a condition that the “standard of material, workmanship and building practice is at least equal to that specified in Local Government Department’s Outline Specification for Houses.” This condition was, as I will show, breached by the defendant. Building began in the summer of 1975, and the defendant moved into occupation of the bungalow when he got married in the month of May, 1977. (It has not been necessary to determine the exact date of completion as no point under the Statute of Limitations arises).
An oral agreement for sale was entered into in July, 1980, between the parties. No verbal warranties express or implied were contained in this agreement, and no representations as to the fitness of the premises were made prior to it. The written contract of the 30th March, 1981, had made provision for the sale of a parcel of land, with no mention of the house erected on it. It contained no warranties relating to the building. It follows therefore that the plaintiffs’ claim against this defendant will fail if no liability in tort exists.
Before the verbal agreement (and a few times after it) Mr. Ward and his fiancée inspected the house. It contained no defects as far as they could see. He did not have it professionally examined.
Mr. and Mrs. Ward did not go into occupation until December, 1981. They then discovered that there was no proper flue in the chimney and they had to pay £308 to a builder to put in a proper one. They also discovered that the house was excessively damp, and water percolated into it. In July, 1982, they decided to put in a central heating system. When their contractor opened up the floor he declined to do any further work in the premises. Between the 19th and 23rd July, a survey by a consultant engineer (Mr. Osborne) was carried out. As a result of his report and advice the plaintiffs left the house (which hassince remained abandoned) and have lived since in rented accommodation costing £160 per month.
There has been a conflict of evidence between on the one hand the professional witnesses called on behalf of the plaintiffs and on the other the professional witnesses called on behalf of the second named defendant and the first named defendant himself. I have found the testimony of the plaintiffs’ witnesses more persuasive and I base my findings on the report of the 26th August, 1982, and the oral testimony of Mr. Osborne and the report of December, 1984, and oral testimony of Mr. McLoughlin (another experienced engineer) as well as on the photographic evidence to which they referred.
I summarise my findings as follows:
The roof – This consisted of asbestos cement slabs. The roof timbers were incorrectly constructed, rafters having been strutted from the ceiling joists resulting in extensive cracking of the ceiling plaster. This construction error is, however, not the major one in the building and is not a source of possible injury to occupiers.
The floors – All items of floor construction were sub-standard. The main item required in a floor for structural safety, namely a 4 inch or 6 inch structural concrete slab was omitted, as was a vapour barrier of a continuous P.V.C. The sub-floor filling was unacceptable, comprising uncompacted dirt, sand, decayed timber and rubble. Extensive cracking, settlement and failure of the floors throughout the house had occurred by July, 1982. The only way to remedy the defective floors would be to remove them, and the deep dirt filling underneath and reconstruct entirely to proper standards.
Walls and foundation – Extensive cracking had occurred in the walls by July of 1982, being particularly severe in the south gable and back wall. It was possible to see through the cracks in the wall in the south gable. Excessive settlement had occurred and the foundations had failed. Trial holes showed that the foundation of this wall had also rested on the dirt filling which contained large pieces of rotted timber and that such a foundation was structurally unsound and unsafe. Extensive ingress of water and dampness through external walls had occurred by this date. Remedial work would involve the entire re-construction of the walls and defective foundations, and underpinning of defective foundations, reconstruction of defective sills, heads and sides and the taking down of defective portions of walls was required.
Finishes – The finishes to the house were defective. There were noticeable slopes in floors and ceilings and poor timber work. The front door had large see-through cracks. Plasterwork was of incorrect thickness and outside paths were constructed at incorrect height.
The defects to the roof, floors, walls and foundations which I have just outlined were “hidden” defects, in the sense that they were not discoverable by the sort of examination which a lay person with no professional qualifications would be expected to carry out. But I accept the evidence (and this is ofparticular importance when considering the claim against the defendant Council) that these defects were discoverable by a reasonably careful inspection carried out by a person with ordinary professional qualifications in house construction such as those that an architect or engineer would have obtained. The water supply to the house had been obtained by means of a temporary (and wholly unauthorised) connection from a water pipe beside the nearby railway line; the septic tank was located within a mere 15 metres of the house; the drainage at the south gable was improper; improper heads had been inserted in some of the windows, there was a bulge in the roof; the floors sounded hollow when tapped; there were gaps between walls and floors; and the ground at the back of the house was level with the kitchen floor. These would have alerted a qualified observer to the sub-standard design and construction of the house and would have caused him to investigate it further with the result that the hidden defects would have been discovered.
Because of recent developments in the law to which I will refer in a moment it is not now necessary to differentiate between “dangerous” defects and “defects of quality.” Nonetheless I think I should indicate that the most serious defects in the house related to the floors, walls and foundations and these constituted defects dangerous for the health and safety of the occupiers.
I am satisfied that the plaintiffs acted reasonably in taking the advice they were given and in leaving the bungalow in October, 1982, because it constituted a danger to health and safety. I accept the evidence that it would be reasonable to demolish the house rather than attempt to repair the floors, the foundations and the walls. This means that in assessing damages it is unnecessary to consider the cost of making good the numerous other defects in the workmanship and design.
The existence of a duty of care
The defendant built the bungalow and having lived in it for about three and a half years after completing the work agreed to convey the land on which it stood to the first named plaintiff. The first point of law which calls for examination is whether a builder who is also a vendor of the land on which the house is built is liable in negligence to his purchaser for defects in his workmanship or design. If a duty of care is shown to exist it would then be necessary to examine its scope and extent. I propose on the first issue initially to examine developments in the law in England and Northern Ireland and then consider the recent case law on this subject in this jurisdiction. Whilst these decisions have been reached in the context of (a) personal injuries caused by defective premises, (b) pecuniary loss sustained in making good defective premises and (c) claims brought by purchasers or lessees, by subsequent purchasers, or by persons lawfully on premises, they all have involved the question whether the duty of care enunciated in Donoghue v. Stevenson [1932]
A.C. 562 applied. What emerges from the case law in England is a development which firstly qualified the builder’s immunity from tortious liability by imposing a duty of care on a builder who constructed the building but did not convey or lease it, and later which imposed it on all builders whether owners of the realty or not.
This development is of recent origin. It had long been accepted that a builder who sells or lets a house is not liable, apart from contract, to anyone who suffers injury or damage from defects in it. This principle was well illustrated in Bottomley v. Bannister [1932] I.K.B. 458 a case in which a death occurred due, it was alleged, to defects in a dwelling house erected by the defendant. A claim under Lord Campbell’s Act failed, the Court of Appeal discharging the verdict of a jury in favour of the plaintiffs. “The important question”, Greer L.J. at p. 476 pointed out, “for determination is whether it was established that there was any breach of duty by the defendants towards the plaintiffs. Does the vendor or lessor of a house owe any duty, independently of contract, to persons who may happen to come to live in the house either by purchase from him, or as his tenants, to exercise reasonable care to see that the house is fit for occupation?” Having reviewed the authorities he answered this question in the negative pointing out (p. 477) “no case was cited to us in which a tenant or purchaser has ever recovered against a lessor or vendor, either by implied contract or in tort, by establishing the liability of the vendor or landlord for injuries sustained through the house or its fixtures being unsafe at the date of the sale or of the lease.”
This case was heard before Donoghue v. Stevenson [1932] A.C. 562 was decided, but in a subsequent case the continued immunity of the builder was confirmed.
In Otto v. Bolton and Norris [1936] 2 K.B. 46 a claim was brought by the purchaser of a house built by the defendants who were also the owners of the land on which the house was erected. Miss Otto’s claim that there had been a breach of a contractural promise in relation to the fitness of the premises collateral to the contract of purchase succeeded and she was awarded damages for defects in the premises. But her mother’s claim for damages for personal injuries caused by a fall of a ceiling failed. Atkinson J. in dismissing the claim pointed out that “I can find in no case any suggestion that a builder selling a house after completion is, in his capacity of builder, under any obligation to take care towards a future purchaser, let alone other persons who may come to live in it” (p. 52). And he expressly adopted the statement of Greer, L.J. in Bottomley v. Bannister [1932] 1 K.B. 458 and expressly rejected an argument that the law on the subject had been altered by Donoghue v. Stevenson [1932] A.C. 562.
A significant development in extending liability in tort occurred as a result of the decision of the Court of Appeal in Northern Ireland in Gallagher v. N. McDowell Ltd. [1961] N.I. 26, a case in which the defendant had built a house, under contract, for the Northern Ireland Housing Trust, which in turn let it to the plaintiff’s husband, its first tenant. The plaintiff was injured due to a defect in the floor and her claim against the builder was successful, the Court of Appeal holding that the builders were under a duty to the plaintiff as a lawful user of the house to take reasonable care for her safety. Expressly, however, the court confirmed that the immunity of a builder who builds on his own land and sells or lets the completed house remained, and thus a distinction arose in the law between such a builder and one who builds under contract on the land of another.
It was not until 1971 that this distinction was abolished in England. In Dutton v. Bognor Regis Urban District Council [1972] I Q.B. 373 a builder developing a housing estate applied to the local council for permission to build a house and for approval under the council’s building bye-laws. In 1959 one of the council’s inspectors inspected the foundations and approved them. The foundations were covered up and the house completed. The house was sold to a purchaser who shortly afterwards sold it to the plaintiff. Soon after she moved in serious defects developed. Expert investigation found that the internal foundations were unsound because they were built on an old rubbish tip and that if the council’s inspector had made a careful inspection, this fact could and should have been detected. The plaintiff began proceedings against the builder and the council, alleging against the council that she had suffered damage because of the negligent inspection. She compromised her claim against the builder but went on against the council and succeeded in the High Court. In the Court of Appeal it was argued that, on the authorities, the builder owed no duty of care to the plaintiff purchaser and as the builder could not be liable for his negligence in constructing the house also the Council’s inspector should not be liable for passing the bad work. Denning M.R. agreed that this was so, but then went on to consider whether or not the builder was liable. The defendant relied on Bottomley v. Bannister [1932] 1 K.B. 458, but Lord Denning M.R. declared categorically that that case was no longer good law. Having referred to the authorities before Donoghue v. Stevenson [1932] A.C. 562 he then went on to consider its effect. He said this:
“But that case dealt only with the manufacturer of an article. Cavalier v. Pope (on landlords) and Bottomley v. Bannister (on builders) were considered by the House in Donoghue v. Stevenson [1932] A.C. 562, but they were not overruled. It was suggested that they were distinguishable on the ground that they did not deal with chattels but with real property; see Lord Atkin at p. 598 and by Lord MacMillan at p. 609. Hence they were treated by the courts as being still cases of authority. So much so that in 1936 a judge at first instance held that a builder who builds a house for sale is under no duty to build it carefully. If a person was injured by his negligence, he could not recover; see Otto v. Bolton and Norris [1936] 2 K.B. 46.
The distinction between chattels and real property is quite unsustainable. If the manufacturer of an article is liable to a person injured by his negligence, so should the builder of a house be liable. After the lapse of 30 years this was recognised. In Gallagher v. N. McDowell Ltd. [1961] N.I. 26, Lord MacDermott C.J. and his colleagues in the Northern Ireland Court of Appeal held that a contractor who built a house negligently was liable to a person injured by his negligence. This was followed by Nield J. in Sharpe v. E.T. Sweeting & Son Ltd. [1963] 1 W.L.R. 665. But the judges in those cases confined themselves to cases in which the builder was only a contractor and was not the owner of the house itself. When the builder is himself the owner, they assumed that Bottomley v.Bannister [1932] 1 K.B. 458 was still authority for exempting him from liability for negligence.
There is no sense in maintaining this distinction. It would mean that a contractor who builds a house on another’s land is liable for negligence in constructing it, but that a speculative builder, who buys land and himself builds houses on it for sale, and is just as negligent as the contractor, is not liable. That cannot be right. Each must be under the same duty of care and to the same persons . . . I hold, therefore, that a builder is liable for negligence in constructing a house – whereby a visitor is injured – and it is no excuse for him to say that he was the owner of it. In my opinion Bottomley v.Bannister [1932] I K.B. 458 is no longer good authority. Nor is Otto v.Bolton and Norris [1936] 2 K.B. 46. They are both overruled.” (pp. 393-394).
The judgment of Sachs, L.J. was to the same effect. He decided that it was wrong to suggest that the principle in Donoghue v. Stevenson [1932] A.C. 562 had no application to realty, pointing out:
“It is obvious that a builder who by his negligence creates a hidden defect is liable to anyone suffering damage from it just as a manufacturer is liable when a hidden defect in the goods he makes injures a workman using it and as a producer of consumable goods is liable when a hidden defect injures a consumer. I can find nothing in principle which absolves from liability a builder who creates a hidden defect because he happens to be or to become the owner of the premises built . . . in my judgment there is no exception behind which landowners as such can shelter.” (p. 402).
The abolition of the immunity of a builder/vendor in England was copperfastened by Anns v. Merton London Borough [1978] A.C. 728, in which agreement on this point with the views of the Court of Appeal in Dutton’s Case [1972] 1 Q.B. 373 was expressed in the House of Lords by Lord Wilberforce when concurring that it would be unreasonable to impose a liability in respect of defective foundations on the council if the builder whose primary fault it was should be immune from liability. He rejected the argument that Donoghue v.Stevenson [1932] A.C. 562 did not apply to realty and the suggestion that the immunity established by the older authorities still survived.
“That immunity, as I understand it, rests partly upon a distinction being made between chattels and real property, partly upon the principle of ‘caveat emptor’, or, in the case where the owner leases the property, on the proposition ‘for, fraud apart, there is no law against letting a tumbledown house’: see Robbins v. Jones (1863) 15 C.B.N.S. 221, 240, per Erle C.J. But leaving aside such cases as arise between contracting parties, when the terms of the contract have to be considered ( Voli v. Inglewood Shire Council (1963) 110 C.L.R. 74, 85 per Windeyer J.), I am unable to understand why this principle or proposition should prevent recovery in a suitable case by a person, who has subsequently acquired the house, upon the principle of Donoghue v. Stevenson ; the same rule should apply to all careless acts of a builder; whether he happens also to own the land or not.” (p. 759).
Turning, now, to the authorities in this country it will be seen that up until recently it was accepted that Donoghue v. Stevenson [1932] A.C. 562 did not assist either the purchaser/lessee of a defective house, or a person injured due to defects in a building in a claim brought against the builder. McGowan v.Harrison [1941] I.R. 331 was an action arising from a contract for the sale of a house which had been built by the defendant on land owned by him. The sale was completed by way of sub-lease. The court found that within a comparatively short time after it was built it was unfit for human habitation. Notwithstanding this fact the plaintiff’s claim failed. It had been urged on his behalf that there was an implied warranty that the house would be reasonably fit for habitation but this claim was rejected in the High Court on the authority of a passage of the judgment in Otto v. Bolton and Norris [1936] 2 K.B. 46 (to which I have already referred). The alternative claim that an implied condition of fitness existed by virtue of the Housing (Miscellaneous Provisions) Act, 1931, also failed. The plaintiff appealed to the Supreme Court, but only on the 1931 Act point, accepting apparently the hopelessness of establishing a breach of a contractual warranty. But the appeal failed, the Supreme Court holding that the 1931 Act did not apply to the sub-lease in question.
No claim based on liability in tort was brought in that case, and in a later case ( Chambers v. Lord Mayor of Cork (1959) 93 I.L.T.R. 45) such a claim failed. In that case the Cork Corporation had built a house by direct labour and let it to the plaintiff’s husband. She was injured, she said, as a result of defective workmanship but the case was withdrawn from the jury by Dixon J. who held that “it was well settled law that in circumstances such as those present here a landlord owes no duty to the wife of a tenant.”
But in Siney v. Corporation of Dublin [1980] I.R. 400 the Supreme Court significantly developed the law in this country relating to liability in tort for defective premises. The defendant corporation had not themselves built the flat the subject matter of the proceedings, but had caused it to be built and then let it to the plaintiff under statutory powers conferred by the Housing Act, 1966. The court held firstly that there was an implied warranty in the letting contract that the flat should be habitable. But the court also considered whether the Corporation owed a duty of care to the plaintiff apart from contract. In holding that an action for damages for negligence lay, the Chief Justice, having referred to the decision of Court of Appeal in Northern Ireland in the Gallagher Case [1961] N.I. 26 and a passage from Lord MacDermott’s judgment referring to the continued immunity in tort of land-owners, commented (p. 413):
“In that passage in his judgment, Lord MacDermott seems to assume a continuing immunity for land-owners, as such, from the rule in Donoghue v. Stevenson in respect of defects or dangers on their land. Such a view of the law is not consistent with the decision of this court in Purtill v. Athlone U.D.C. and McNamara v. Electricity Supply Board . In relation to their particular facts, those cases regarded the liability of the occupier of land (whether as owner or otherwise) in respect of defects or dangers found on the land as proper to be treated under the principles of Donoghue v. Stevenson .”
He held, then, that the Corporation could not claim immunity on the ground that it had provided a house on its own land, and found that the principles of Donoghue v. Stevenson [1932] A.C. 562 applied in the context of the exercise of the powers of inspection carried out by the defendants under the 1965 Act. Mr. Justice Henchy also held that the Corporation was liable in negligence to the plaintiff, holding that it owed a duty to the plaintiff to see that the flat he was getting was fit for habitation and that it was negligent in failing to observe that duty (p. 421). However, he expressly pointed out that “it would be beyond the true scope of the essential circumstances of this case to decide whether there would be liability in negligence if the flat had not been provided under the Act.” (p. 421).
The liability in negligence of a builder of a house to a subsequent purchaserwas considered by Mr. Justice McMahon in Colgan v. Connolly Construction Co. (Ireland) Ltd. (unrep. High Court 29th February, 1980). In that case the plaintiff claimed damages for financial loss in making good defects in the construction of the house. His claim succeeded:
“I am satisfied”, Mr. Justice McMahon said at page 7, “by the reasoning of Lord MacDermott L.C.J. in Gallagher v. N. McDowell Ltd. and the decisions referred to by Mr. Justice Henchy that the principle of Donoghue v. Stevenson applies to the relationship between the builder of a house and a subsequent occupier so as to entitle the occupier to recover damages against the builder for personal injuries caused by defects in the house which were attributable to the negligence of the builder and which are not discoverable by the kind of examination which the builder could reasonably expect the occupier to make before occupying the house.”
Although Siney v. Corporation of Dublin [1980] I.R. 400 was a case in which a duty of care relating to inspection under statutory powers was recognised and was not directly concerned with the common law duty of care of a builder nonetheless it provides very strong support for the English authorities to which I have referred. These developments justify me in holding that in this country, as in England, the immunity in tort of a builder who owns the land on which the house is built and who subsequently sells it to a purchaser (or who lets it to a lessee) no longer exists. And I am satisfied both in principle and on authority that in this case the first named defendant when building the bungalow owed a duty of care to the person to whom he might subsequently sell it, based on the neighbour principle established in Donoghue v. Stevenson [1932] 1 A.C. 562. There are no facts here arising under contract or otherwise that require that that duty should be restricted or limited in any way; in particular, I do not consider that the duty is in any way affected by the fact that instead of selling it immediately after its completion the defendant resided in it himself for a number of years.
The scope and extent of the duty of care I will now turn to consider.
The scope of the duty of care
In Colgan’s Case (unreported High Court 29th February, 1980) to which I have already referred Mr. Justice McMahon stated that the builder was liable for personal injuries caused by defects in the house attributable to his negligence and which could not be discovered by the kind of examination which the builder could reasonably expect the occupier to make before occupying it, and he awarded damages based on the cost of making good defects which threatened the health or safety of the occupier, but did not award damages for defects in the quality of workmanship which did not threaten health or safety. In other words he treated the duty of care as one limited to avoiding dangerous defects. But this decision was based on the state of the law as it stood before the decision of the House of Lords in Junior Books Ltd. v. Veitchi [1982] 3 W.L.R. 477. In that case the court considered a claim against specialist flooring contractors who were engaged as sub-contractors to lay a floor in a factory being erected for the pursuers (the claim arose in Scotland) by a building company. There was no contractual relationship between the pursuers and the defendants. Cracks appeared in the floor and the pursuers averred that as a result they had suffered loss and damage and claimed for the estimated cost of relaying the floor and various items of economic and financial loss consequential on replacement, such as the cost of removal of machinery and loss of profits while the floor was being relaid. It was not alleged that the floor was likely to cause any personal injury or injury to property. The question at issue was whether the scope of the (admitted) duty of care was limited to a duty to avoid causing foreseeable harm to persons or property (other than the subject matter of the work) by negligent acts or omissions or whether it extended to a duty to avoid causing pure economic loss consequential on defects in the work and to avoid defects in the work itself. The decision of the majority held that the duty of care was the wider of the two alternatives. The leading judgment was given by Lord Roskill. Having quoted (see page 490) with approval Lord Reid’s words in Dorset Yacht Co. Ltd. v. Home Office [1970] A.C. 1004 (“In later years there has been a steady trend towards regarding the law of negligence as depending on principle so that, when a new point emerges, one should not ask whether it is covered by authority but whether recognised principles apply to it.”) he then quoted with approval the reformulation of the Donoghue v. Stevenson [1932] A.C. 562 principle by Lord Wilberforce in Anns v. Merton London Borough [1978] A.C. 728 as follows:
“The position has now been reached that in order to establish that a duty of care arises in a particular situation, it is not necessary to bring the facts of that situation within those of previous situations in which a duty of care has been held to exist. Rather the question has to be approached in two stages. First one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the latter – in which case a prima facie duty of care exists. Secondly, if the first question is answered affirmatively, it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty or the class of persons to whom it is owed or the damages to which a breach of it may give rise.”
The subcontractors contended that the scope of duty they owed was not to construct the flooring so that others were in peril of suffering loss or damage to their persons or their property, but no more. Lord Roskill rejected this submission pointing out: “It seems curious that, if the appellants’ work had been so bad that to avoid imminent danger expenditure had been incurred, the respondents could recover that expenditure, but if the work was less badly done so that remedial work could be postponed they cannot do so.”
Applying the two principles he had quoted from Lord Wilberforce’s judgment he concluded that the defendants must be taken to have known that if they did the work negligently the resulting defects would at some time require remedying by the respondents expending money upon the remedial measures as a consequence of which they would suffer financial or economic loss (p. 494).
There is no doubt that this case has extended the liability of a builder for loss sustained by defective workmanship. I find its reasoning persuasive and I have no difficulty in applying it. It follows from it that the concept of reasonable foresight is one to be employed not only in deciding in a given case whether a duty of care exists, but also can be employed in determining its scope. Applying this concept to the present case it seems to me that the duty of care which the defendant owed to a purchaser of the bungalow which he built was one relating to hidden defects not discoverable by the kind of examination which he could reasonably expect his purchaser to make before occupying the house. But the duty was not limited to avoiding foreseeable harm to persons or property other than the bungalow itself (that is a duty to avoid dangerous hidden defects in the bungalow) but extended to a duty to avoid causing the purchaser consequential financial loss arising from hidden defects in the bungalow itself, (that is a duty to avoid defects in the quality of the work). It also seems to me that the defendant should have foreseen that if he caused the bungalow to be so badly constructed as to force the plaintiffs to leave it that this would cause them both inconvenience and discomfort, and so he owed a duty to the plaintiffs not to cause hidden defects which would result in such inconvenience. This conclusion is consistent with the decision of the Supreme Court in Siney v.Corporation of Dublin [1980] I.R. 400 in which the Court upheld an award of damages in negligence to the plaintiff and his family for the inconvenience they each suffered (p. 415).
The defendant’s breach of duty
I conclude therefore (there being no factor limiting or restricting the prima facie duty which is shown to exist) that the defendant was in breach of duty in:
(a) causing defects which resulted in danger to the health and safety of the first named plaintiff. This means that the plaintiff is entitled under this heading to damages for making good the defective floors, foundations and walls, all of which constituted a danger. To make good these defects involves the demolition and rebuilding of the bungalow;
(b) causing defects in the workmanship which required to be remedied. Most of the serious defects in the bungalow under this heading would be embraced under (a) also. Others are irrelevant because the house will require to be demolished. But the cost of making good the defective flue can properly be claimed under this separate heading;
(c) causing defects which resulted in inconvenience and discomfort to the plaintiff and his wife. This means that both are entitled to damages for the inconvenience they suffered in having to leave their home and find a new one.
I will assess their damages at a later date.
The claim against the defendant local authority
In the month of August, 1980, (in circumstances I will outline in greater detail later) the first named plaintiff applied to the Louth County Council for a loan under the provisions of the Housing Act, 1966, to enable him to purchase the bungalow. The Council sent a valuer (a Mr. McLoughlin a representative of the third-named defendant firm). He found no defects in the premises and reported that it was in good repair and put its market value at £25,000. The case against the Council is firstly that this valuation was negligently carried out and that the Council is vicariously liable for Mr. McLoughlin’s carelessness. For reasons given later I do not think that Mr. McLoughlin was negligent and so this claim fails. But there is a second string to the plaintiff’s bow.
It is urged that in carrying out their statutory functions, the Council owed a common law duty of care to the plaintiffs which they breached. The Council had a statutory power under the Housing Act, 1966, to grant a loan to the plaintiff and a statutory duty under the Housing Authorities (Loans for Acquisition or Construction of Houses) Regulations, 1972, to inspect the bungalow to ascertain its market value before granting a loan. In carrying out the inspection and valuation a duty to act with care it is said arose, a duty which was breached by authorising an inspection by someone who lacked the necessary qualifications to ascertain reasonably discoverable defects.
I will first consider the legal principles applicable to this claim.
The law
That a common law duty of care based on the principle established in Donoghue v. Stevenson [1932] A.C. 562 may exist when statutory functions are being performed was made clear in Dorset Yacht Co. Ltd. v. Home Office [1970] A.C. 1004. In that case Borstal officers were acting under statutory powers when controlling a number of boys, but it was held that they were also under a duty of care as regards persons who might suffer damage as a result of their carelessness, Lord Pearson pointing out (p. 1055) “the existence of the statutory duties does not exclude liability at common law for negligence in the performance of the statutory duties.”
This principle was confirmed and extended in the case of a local authority exercising powers of inspection under a Housing Act, – a case which Lord Denning, writing extra-curially, has described as “one of the most important cases of modern times.” Dutton v. Bognor Regis Urban District Council [1972] I Q.B. 373, was a case as I have already pointed out in which a builder had built a house, having first obtained approval for his work (including the foundations) from an inspector of the defendant Council under bye-laws made under the Public Health Act, 1936. The builder sold the house to a purchaser who shortly afterwards sold it to the plaintiff. Serious defects developed in it due, expert examination established, to its unsound foundations. Had the Council’s inspector carried out his duties carefully he would have found that the house was built on an old rubbish tip and should not have given bye-law approval. The plaintiff sued the builder and the Council. Having compromised her claim against the builder she obtained a favourable finding from the trial judge on her claim that the Council had owed her a duty of care in accordance with the principle established in Donoghue v. Stevenson [1932] A.C. 562 which they had breached. The Court of Appeal upheld this decision, holding (a) that a duty situation existed between the Council and the plaintiff as a subsequent purchaser of the house, as the 1936 Act had been passed “to protect those who might come to own or occupy the relevant houses against jerry-building and similar faults and was intended to benefit such persons” (p. 406) and (b) there had been a breach of the duty of care which the Council owed the plaintiff as the Council was vicariously responsible for the negligence of their inspector.
The principle established in Dutton v. Bognor Regis Urban District Council [1972] 1 Q.B. 373 was confirmed later in the House of Lords (although with some qualifications). In Anns v. Merton London Borough [1978] A.C. 728 the facts were as follows. The Public Health Act, 1936, had imposed certain duties and conferred certain powers on local authorities, including the appellants. Bye-law 18 (1) (b) made under its provisions provided that the foundation of every building should be taken down to such a depth as to safeguard the building in the way prescribed. The appellant council had approved plans for the creation of a two-storied block of maisonettes, and in doing so drew attention to the requirement of the bye-law that notice be given to the council surveyor when the foundations were ready to be covered. The block was completed and let under lease. Subsequently cracks appeared in the wall and the floors began to slope. The plaintiffs claimed that the cracks had resulted from the negligence of the council surveyor in approving foundations which were inadequate. On a preliminary issue the High Court held that the claims were statute barred, but this decision was reversed on appeal. Before the House of Lords the appellants were given leave to argue the question whether in the circumstances the appellants were under any duty of care to the respondents (two of whom being the original lessees, and the remainder having obtained their interest by assignment from the original lessees).
The leading judgment in the House of Lords was delivered by Lord Wilberforce. Having outlined the two-stage approach to ascertaining the existence of a duty of care and having considered the relevant provisions of the 1936 Act and the bye-laws made under it he pointed out that it must have been in the reasonable contemplation of the local authority (as well, of course, as of, the builder) that failure to comply with the bye-law requirements as to foundations might give rise to hidden defects which in the future might cause damage affecting the safety and health of owners and occupiers, and that as the building is intended to last the class of owners and occupiers likely to be affected could not be limited to those who go in immediately after construction (p. 753). He then went on:
“What then is the extent of the local authority’s duty towards these persons? Although, as I have suggested, a situation of ‘proximity’ existed between the council and the owners and occupiers of the houses, I do not think that a description of the council’s duty can be based upon the ‘neighbourhood’ principle alone or upon merely any such factual relationship as ‘control’ as suggested by the Court of Appeal. So to base it would be to neglect an essential factor which is that the local authority is a public body, discharging functions under statute: its powers and duties are definable in terms of public not private law. The problem which this type of action creates, is to define the circumstances in which the law should impose, over and above, or perhaps alongside, these public law powers and duties, a duty in private law towards individuals such that they may sue for damages in a civil court.” (pp. 753, 754).
In the course of counsel’s submissions it had been argued that a distinction should be made between statutory powers and statutory duties and it was urged that a common law duty of care could never arise in cases where the court was concerned with a mere statutory power. This submission was rejected (see p. 755). But in the course of his judgment Lord Wilberforce referred to the fact that statutes relating to public authorities contain in them a large area of policy. The courts, he pointed out, call this “discretion”, meaning that the decision is one for the authority to make and not for the courts. But statutes also presuppose the practical execution of policy decisions which he described as an”operational” area, pointing out that the more “operational” a power or duty may be, the easier it is to superimpose upon it a common law duty of care (p. 754). Having concluded that a common law duty of care may have existed the issue raised was decided against the submissions of the local authority.
The distinction between the acts of a public authority in the area of the authority’s “discretion” and acts falling within its “operational” area is one which Lord Wilberforce acknowledged (p. 754) may well be a matter of degree and is certainly one which may be difficult to make with precision in many cases (including the present one). But Anns v. Merton London Borough [1978] A.C. 728 did not lay down rules or tests of general application for all cases, as the House of Lords has recently made clear in Peabody Fund v. Sir Lindsay Parkinson Ltd. [1984] 3 W.L.R. 953. The facts were as follows. Plans submitted by architects acting for the plaintiffs were approved by the local authority, the defendants in the action. These provided for the construction of
a flexible system of drainage for a proposed housing development. The drainage system actually installed by the plaintiffs on advice given by the architects departed from the plans and were of a different and rigid design. This departure came to the knowledge of the drainage inspector of the defendant local authority whilst the installation was progressing, but he took no action in relation to it. Later the drains were found to be defective and they had to be reconstructed, causing the plaintiffs substantial loss. In proceedings brought,inter alia, against the local authority alleging negligence in the discharge of statutory functions under the Local Government Act, 1963, the plaintiffs at first instance succeeded. On appeal to the Court of Appeal and subsequently to the House of Lords, this decision was reversed.
The decision of the House of Lords was delivered by Lord Keith of Kinkel. He summarised the plaintiffs’ case as follows. The local authority ought to have forseen that, if they did not step in to stop the installation of drains with rigid joints that severe economic loss would ensue to the plaintiffs through the necessity at some future date of taking them up and replacing them with others of the approved design. The issue was whether the local authority owed a duty to the plaintiffs to warn them that they were heading for financial disaster.
Having quoted Lord Reid in Dorset Yacht Co. Ltd. v. Home Office [1970] A.C. 1004 and Lord Wilberforce in Anns v. Merton London Borough [1978] A.C. 728 he went on:
“There has been a tendency in some recent cases to treat these passages as being themselves of a definitive character. This is a temptation which should be resisted. The true question in each case is whether the particular defendant owed to the particular plaintiff a duty of care having the scope which is contended for, and whether he was in breach of that duty with consequent loss to the plaintiff. A relationship of proximity in Lord Atkin’s sense must exist before any duty of care can arise, but the scope of the duty must depend on all the circumstances of the case. In Dorset Yacht Co. v. Home Office [1970] A.C. 1004, 1038, Lord Morris of Borth-y-Gest, after observing that at the conclusion of his speech in Donoghue v. Stevenson [1932] A.C. 562, Lord Atkin said that it was advantageous if the law ‘is in accordance with sound common sense’ and expressing the view that a special relation existed between the prison officers and the yacht company which gave rise to a duty on the former to control their charges so as to prevent them doing damage, continued, at p. 1039.
Apart from this I would conclude that, in the situation stipulated in the present case, it would not only be fair and reasonable that a duty of care should exist but that it would be contrary to the fitness of things were it not so. I doubt whether it is necessary to say, in cases where the court is asked whether in a particular situation a duty existed, that the court is called upon to make a decision as to policy.
Policy need not be invoked where reason and good sense will at once point the way. If the test as to whether in some particular situation a duty of care arises may in some case have to be whether it is fair and reasonable that it should so arise, the court must not shrink from being the arbiter. As Lord Radcliffe said in his speech in Davis Contractors Ltd. v. Fareham Urban District Council [1956] A.C. 696, 728, the court is ‘the spokesman of the fair and reasonable man.’
So in determining whether or not a duty of care of particular scope was incumbent upon a defendant it is material to take into consideration whether it is just and reasonable that it should be so.”(page 960).
Lord Keith decided that the local authority owed no duty at common law to the plaintiffs. He pointed out firstly, that they had relied on the advice of their own architects and engineers and contractors who in the event had let them down and that it would be neither reasonable nor just to impose upon the local authority a liability to indemnify them against loss resulting from “such disastrous reliance.” But in addition he concluded that no duty of care existed in the light of the purpose of the statutory powers which the local authority was operating even though damage was forseeable. “Lambeth” (the local authority involved) “owed no duty to Peabody to activate their paragraph 15 powers, notwithstanding that they might reasonably have foreseen that failure to do so would result in economic loss to Peabody because the purpose of avoiding such loss was not one of the purposes for which these powers were vested in them”(p. 961).
I have already referred to the Supreme Court decision in Siney v.Corporation of Dublin [1980] I.R. 400, a case decided after Anns v. Merton London Borough [1978] A.C. 728, and before Peabody Fund v. Sir Lindsay Parkinson Ltd. [1985] H.C. 210. In both the judgments delivered in that case the common law duty of the Corporation to the incoming tenant was established by reference to the statute under which the statutory functions were being performed. And it is clear from both judgments that the purpose for which those functions had been imposed was an influential consideration (see pp. 414 and 421).
Whilst not attempting in any way to summarise all the conclusions which are to be derived from the authorities which I have just quoted, it seems to me that for the purposes of this case I can apply the following principles:
(a) When deciding whether a local authority exercising statutory functions is under a common law duty of care the court must firstly ascertain whether a relationship of proximity existed between the parties such that in the reasonable contemplation of the authority carelessness on their part might cause loss. But all the circumstances of the case must in addition be considered, including the statutory provisions under which the authority is acting. Of
particular significance in this connection is the purpose for which the statutory powers were conferred and whether or not the plaintiff is in the class of persons which the statute was designed to assist.
(b) It is material in all cases for the court in reaching its decision on the existence and scope of the alleged duty to consider whether it is just and reasonable that a common law duty of care as alleged should in all the circumstances exist.
The statutory functions of the defendant local authority
The factual relationship in this case should be ascertained firstly by considering the statutory framework in which the local authority was operating. Section 39 of the Housing Act, 1966, provides that a housing authority may, subject to regulations made by the Minister for the Environment, lend money to a person for the purpose of acquiring or constructing a house. Regulations made from time to time imposed a limit on the amount of each loan and at the time of the first named plaintiff’s application this stood at £12,000. The amount of the loan was based on the market value of the house and article 12 paragraph (b) of the Housing Authorities (Loans for Acquisition or Construction of Houses) Regulations, 1972, (S.I. No. 29 of 1972), expressly imposed an obligation on every housing authority to satisfy itself that the value of the ownership of the house was sufficient to provide adequate security for the loan. In order to carry out its statutory powers the defendant council prepared a scheme for the making of loans under the Act and the Regulations. They sent copies of this scheme to applicants for loans, together with a form entitled “Housing Loan – Previously Occupied House”,and the evidence in this case shows that the first named plaintiff got both. Paragraph 6 of the scheme is important for it expressly brings to the notice of applicants the fact that a valuation will be carried out. It reads:
“No advance shall be made by the Council until the Council is satisfied, as a result of a report by the Council’s Valuer, as to the actual value of an existing house . . . and that house, or site, as the case may be, is so situated as to be readily saleable, in the event of a sale by the Council becoming necessary, due to default by the borrower.”
Thus, an applicant whose application for a loan had been approved would be entitled to conclude (a) that the Council had obtained a report from the valuer on the actual value of the house and (b) that as a result of that report the Council was satisfied that the house was readily saleable. The scheme provided that there would be no binding contract until a deed of mortgage had been entered into, and contained details of the borrower’s obligations in relation to repaying the loan and insuring the premises.
Of relevance to the issues in this case is the class of persons to whom the Council at the time of the first named plaintiff’s application were making loans under the 1966 Act. In the form forwarded to him it was stated in paragraph 2 that – “Applications shall be considered only from persons who are unable to obtain loans for the purpose from commercial agencies, e.g. Building Societies or Banks, and whose circumstances would otherwise necessitate their being re-housed by the Council”, and in paragraph (5) that – “The gross income of the applicant and the applicant’s spouse shall not exceed £5,500 in the income tax year preceding the date of the loan application.”
It is clear, therefore, that in the summer of 1980 the defendant Council were operating their lending powers under the Act to assist persons on low income to purchase their own homes, and in particular those who would have been unable to do so but for the Council’s help.
The facts of the relationship between the first named plaintiff and the Council
The first named plaintiff was aware that he might be entitled to obtain a loan from the Council and having orally agreed a price with the first-named defendant visited their offices and obtained from them the form to which I have referred, and a copy of their scheme and he applied by two documents which he signed on the 31st July, 1980, and sent an application fee of £10 as requested by the Council. The first-named plaintiff stated, and his evidence has not been challenged, that he thought that the Council would carry out what he termed an inspection of the house before approving his application for a loan, and that for this reason he did not himself go to the expense of employing an engineer or architect to examine the house on his behalf. He thought that the sum of £10 he had paid was to cover the cost of the inspection and he took the view that if the house was passed by the Council then it must be all night.
Although the first-named plaintiff did not expressly inform any member of the staff of the Council that he was relying on their valuation, and although the Council carried it out for their own purposes and to comply with obligations imposed on them by the statutory regulations to which I have referred, I am satisfied that they ought to have been aware that it was probable that the plaintiff would not have gone to the expense of having the house examined by a professionally qualified person and that he would have relied on the inspection which their scheme indicated would be carried out.
The Council contacted Mr. McLoughlin, a member of the firm of Nicholas Hardy and Co. Ltd., the third named defendants herein. Mr. McLoughlin had no professional qualifications relating to house construction, but was experienced in market conditions in the Dundalk area. He regarded his functions as requiring him to consider merely the visual appearance of the house and then inform the Council of its market value. He inspected the bungalow and reported to the Council on the 12th August, 1980. The document was headed “Valuer’s Certificate” and was in the form of a questionnaire and in
answer to the question “Is the house in good sanitary condition and repair” he answered “Yes” and placed the value of the house at “approximately £25,000.”The plaintiff was told on the 29th August that his loan was granted. The plaintiff was unaware who had carried out the inspection on the Council’s behalf.
The evidence adduced on the Council’s behalf establishes that the fee paid by an applicant is not one required for the purposes of having a valuation carried out (although this was not made clear to the first-named plaintiff or other applicants) but was to discourage frivolous applications. It also established that the practice relating to inspection varied; when the application related to a house in the course of construction a member of the Council’s engineering staff would inspect it, but when it related to a loan for a previously occupied house an auctioneer’s services (usually Mr. McLoughlin’s) were obtained. It would seem that the Council concluded that the 1972 Regulations required them to ascertain the house’s market value (see Regulation 12 (b)) before granting a loan, and this was the reason which prompted the difference in practice. Had a structural engineer rather than an estate agent been employed by the Council his fees undoubtedly would have been higher, but there is no evidence to suggest that this was a factor which determined the choice of valuer.
The existence and scope of the Council’s duty of care
In the light of the facts to which I have referred it seems to me that there was a sufficient relationship of proximity or neighbourhood between the plaintiff and the Council such that in the reasonable contemplation of the Council carelessness on their part in the carrying out of the valuation of the bungalow the plaintiff was going to purchase might be likely to cause him damage. They should have been aware that it was unlikely that the plaintiff (in view of his knowledge that they were going to value the premises and his very limited means) would not himself employ a professional person to examine it and so they should have known that if the valuation was carelessly done it might not disclose defects in the premises and as a result the plaintiff might suffer loss and damage. So it seems to me that a prima facie duty of care existed and there is nothing in the dealings between the parties which should restrict or limit that duty in any way. In particular no warning against reliance on the proposed valuation was given.
But before concluding that a common law duty of care existed it is necessary to consider all the circumstances of the case, and in particular the statutory framework in which the relationship between the parties existed. The scheme which the Council had adopted for giving effect to the powers conferred on it by s. 39 of the 1966 Act was one designed to help persons of limited means to buy their own houses, and in order to permit this to be done a valuation of the house had to be carried out. As the purpose for which the,statutory powers were being exercised was to help persons like the first-named plaintiff it seems to me to be consistent with the Council’s public law powers that they should be accompanied by a private law duty of care in his favour.
For similar reasons it seems to me just and reasonable that the court should hold that a duty of care arose in this case. The first-named plaintiff was relying on the Council’s valuation and they should have been aware that he was doing so. In such circumstances it would not be just to hold that no duty of care was imposed on the Council and it seems to me to be perfectly reasonable that it should be.
As to the scope of the duty of care, the test is again one of forseeability and reasonableness. The Council had a duty to see that the valuation was carried out with reasonable care, and that implied not only that the person who carried out the inspection would not act carelessly, but that the Council would ensure that the person carrying out the valuation would be competent to discover reasonably ascertainable defects which would materially affect its market value.
The Council’s breach of duty
The Council were, in my opinion, in breach of the duty which I have just described. As I have already pointed out, the defects in the premises were reasonably ascertainable by someone with ordinary professional qualifications relating to the construction of buildings. Had such a person been employed to inspect it, it is reasonably probable that the bungalow’s seriously defective condition (which obviously affected most adversely its market value) would have been ascertained. The Council would not have approved the loan and the first-named plaintiff would no doubt have learnt the reason and not bought the bungalow. The damages which were reasonably forseeable were those which I have described in the claim against the builder and so both these defendants are concurrent wrongdoers.
I do not think that the Council owed any common law duty of care to the first-named plaintiff’s wife in carrying out the inspection and valuation and so no damages are payable by these defendants to her. They owed a duty only to the person to whom they were lending the money and who had placed reliance on the Council.
Claim against the third-named defendants
The claim against these defendants is that they owed a duty of care to the plaintiffs and their representative Mr. McLoughlin breached it in failing to discover the serious defects which undoubtedly were in the bungalow at the
time of his inspection. I will assume (without deciding) that Mr. McLoughlin owed a duty of care to the first-named plaintiff on the basis not that his whole report would be sent to the first-named plaintiff (as was the position of the defendant surveyor in Yianni v. Edwin Evans & Sons [1982] Q.B. 373) but that its effect would, by implication, be made known to him in circumstances which, if the inspection was carried out carelessly, would cause him damage. But this does not mean that this claim succeeds because the plaintiffs must establish that the inspection was carried out carelessly. Mr. McLoughlin had no professional qualifications relating to building construction and he was employed in his capacity as auctioneer to place a market value on the property. The standard of care required of him was that of an ordinary skilled auctioneer.
As stated by McNair J. in Bolam v. Friern Hospital Management Committee [1957] 1 W.L.R. 582 (approved by the Court of Appeal in Greaves & Co. v. Baynham Meikle [1975] 1 W.L.R. 1095 at p. 1101):
“. . . where you get a situation which involves the use of some special skill or competence, then the test as to whether there has been negligence or not is not the test of the man on the top of a Clapham omnibus, because he has not got this special skill. The test is the standard of the ordinary skilled man exercising and professing to have that special skill. A man need not possess the highest expert skill; it is well established law that it is sufficient if he exercises the ordinary skill of an ordinary competent man exercising that particular art.”
The plaintiffs here have failed to establish that an auctioneer in this case of ordinary skill and competence would have discovered the hidden defects of the type which existed in the bungalow in the month of August, 1980. Mr. McLoughlin did the job he was required to do and is not to be blamed for the absence of qualifications which he did not hold himself out as having. The claim against these defendants therefore fails.
IV
Claim for contribution or indemnity under s. 21 of the Civil Liability Act, 1961
The defendants have served notices inter se under the provisions of the 1961 Act claiming to be entitled to a contribution or indemnity from each other in respect of any damages and costs payable to the plaintiff. By virtue of s. 21, sub-s. 2, the amount payable by a contributor is to be “such as may be found by the court to be just and equitable having regard to the degree of that contributor’s fault”, a provision very similar to the apportionment provisions in contributory negligence cases (s. 34) where the reduction for such negligence is, as the Supreme Court has established, to be made according to the blameworthiness of the causative contributions to the accident, as measured by the standards of care to be expected from a reasonable person in all the circumstances (see: O’Sullivan v. Dwyer [1971] I.R. 275 and Carroll v. Clare County Council [1975] I.R. 221). It seems to me that a builder who builds a grossly sub-standard house which contains serious hidden defects is much more blameworthy than a public authority whose fault lies in the choice it made in the professional qualifications necessary to inspect adequately the house and I think it would be just and equitable in this case that the defendant local authority should recover from the defendant builder ninety per cent of any damages and costs which may be paid by them to the plaintiffs under the judgment in this case and I will so order.
Ward v. McMaster (SC)
[1988] IESC 3
Finlay C.J.
1. I have read in draft the judgments which have been prepared by Henchy J. and McCarthy J. and I agree with them.
Walsh J.
2. I agree with the judgment of McCarthy J.
Henchy J.
3. Louth County Council (‘the Council’) are a housing authority for the purposes of the Housing Act, 1966. By virtue of s. 39 of that Act they were empowered, subject to regulations made under the Act, to make a loan for the acquisition of a house. The first plaintiff (‘the plaintiff’) having agreed to buy a house on the outskirts of Dundalk, Co. Louth, for £24,000, applied to the Council for a loan of £12,000. Under the relevant regulations made under the Act, and under the terms of the written scheme prepared and issued by the Council for the making of such a loan, the Council were bound, before making any advance, to satisfy themselves, by means of a report by their valuer, as to the actual value of the house and that the house provided adequate security for the loan.
4. For the purpose of satisfying those requirements the Council sent out a local auctioneer and valuer to make a report on the house in question. His report consisted of the replies he gave to a series of questions set out in a typed form furnished to him by the Council. Amongst the replies given by him was one saying that in his opinion the house was a reasonable risk for a loan over 30 years and one giving his valuation of the house as approximately £25,000.
5. It turned out that those opinions were wildly incorrect. The house was not a reasonable security for the loan and it was grossly overvalued at £25,000. Although, as events proved, it was not a good security for the loan of £12,000 applied for, the loan was granted. With the aid of the loan the plaintiff bought the house from the man who a few years earlier had built it, but when the plaintiff and his wife went into occupation they found that it was riddled with defects, most of them concealed structural defects. So fundamental and widespread were those defects that the plaintiff and his wife had to abandon the house. They moved into rented premises. Apparently the house still remains unoccupied. It seems to have been written off as a habitable dwellinghouse.
6. In the proceedings which the plaintiff and his wife brought in the High Court, Costello J. found in favour of the plaintiff in his claim in negligence against the first defendant (the vendor); and also against the Council, based on an allegation that they were negligent in not having a proper valuation carried out, so that, to his detriment, he was induced to rely on the adequacy of their valuation. The issue in this appeal by the Council is (apart from the question of the amount of the damages awarded) whether that finding of negligence should be upheld.
7. It was held by Costello J. in the High Court that the auctioneer who carried out the valuation for the Council was not negligent, and there is no appeal against that finding. The auctioneer was absolved on the ground that he was only an auctioneer and estate agent and, as such, is not to he blamed for not having the skill and competence necessary for the discovery of the hidden defects in the house. That unappealed finding must be accepted in this appeal as being correct.
8. As to the Council, the allegation of negligence against them does not necessarily fail because the valuer engaged by them was acquitted of negligence. What is relied on as negligence on their part is their failure to engage as a valuer a person who was competent to value the house in the light of (amongst other things) its structural condition. This, it is said, could have been done by engaging a person who was both an auctioneer and a surveyor, or, alternatively, by engaging as well as an auctioneer or valuer a person qualified to investigate the structural condition of the house. As I understand the submissions made in this Court on behalf of the Council, they do not deny that they were wanting in care in employing as a valuer a person who was lacking in the skill necessary to appraise the structural condition of the house. In effect they concede a want of due care on their part, but they say that the care in which they were wanting arose, not out of any duty of care owed to the plaintiff but as part of the duty of care owed by them to the public, or more specifically, to that section of the public who by paying rates or taxes funded the Council as a housing authority.
9. For my part I gratefully acknowledge the assistance given by counsel on both sides in presenting an extensive array of decided cases relevant to the liability of public authorities in circumstances similar to those in this case. I do not propose to analyse or assess the different and not always reconcilable approaches adopted in those cases, because I consider that the salient features of this case are sufficiently clear and distinctive to enable the point at issue to be decided on well-established principles.
10. The Council were plainly in breach of their public duty, imposed by the Regulations made under s. 39 of the Act, to ensure by a proper valuation that the house was worth £24,000 and that it was a good security for a loan of £l2,000 repayable over a period of 30 years. However, the breach of such a public duty would not in itself give a cause of action in negligence to the plaintiff: see Siney v. Corporation of Dublin [1980] I.R. 400. It is necessary for him to show that the relationship between him and the Council was one of proximity or neighbourhood which cast a duty on the Council to ensure that, regardless of anything left undone by the plaintiff, he would not end up as the mortgagor of a house which was not a good security for the amount of the loan. A paternalist or protective duty of that kind would not normally be imposed on a mortgagee in favour of a mortgagor, but the plaintiff was in a special position.
11. It has to be remembered that one of the primary duties imposed on the Council by the Act was the elimination of all uninhabitable dwellings in their area. It follows that they should have realised that it would be in breach of their statutory functions if they granted a loan for the purchase of a house which turned out to be uninhabitable. The consequences to the plaintiff of a failure on their part to value the house properly should have been anticipated by the Council in view of factors such as that, in order to qualify for the loan, the plaintiff had to show that he was unable to obtain the loan from a commercial agency such as a bank or a building society and that his circumstances were such that he would otherwise need to be re-housed by the Council. A borrower of that degree of indigency could not have been reasonably expected to incur the further expense of getting a structural survey of the house done. The plaintiff, like the Council, relied on the opinion of a man who was only an auctioneer. He considered that the Council would have the house approved by a surveyor and that it would be superfluous for him to engage a surveyor. That was an understandable attitude and one that ought to have been foreseen by the Council, particularly when regard is had to the fact that one of the preconditions of the loan required the plaintiff to insure the house against fire for at least its full value. The Council must be taken to have impliedly assured the plaintiff that the house would be a good security for the loan.
12. In the light of the special relations between the plaintiff and the Council I consider that, apart from their public duty in the matter, the Council owed a duty to the plaintiff to ensure by a proper valuation that the house would be a good security for the loan. It would be unconscionable and unfair if they were to be allowed to escape liability in negligence on the ground that the plaintiff himself should have taken the necessary steps to ascertain that the house was sound. In the light of the statutory rights and duties of the Council it must, in my view, be held that they owed a duty to the plaintiff to observe due care in the valuation of the house and that they failed to carry out that duty. If they wished to avoid the incidence of that duty they could have so provided in one of the pre-conditions of the loan.
13. I would dismiss this appeal by the Council against the finding of liability in negligence made against them.
Griffin J.
14. I agree with the judgments of Henchy J. and McCarthy J.
McCarthy J.
15. The County Council appeals against so much of the order of the High Court (Costello J.) as held it liable to compensate the first plaintiff, the husband of the second plaintiff, for damage suffered because of the breach by the Council of its common law duty of care to the husband who was the purchaser for £24,000 of part of the lands described in folio 3708 County Louth being site 13 on a map attached to the contract and situated at Faughart, Dundalk, Co. Louth. He sought and obtained from the County Council a loan of £12,000 to enable him to purchase “a dwellinghouse at Lower Faughart, Dundalk.” The house turned out to be unfit for human habitation, although, before the loan was sanctioned, the County Council had obtained a “valuer’s certificate” that the house was in good sanitary condition and repair, and if necessary, readily saleable. The plaintiffs left their home and sued the vendor, who was also the builder and, clearly, at the time no mark for damages, the County Council and the firm engaged by the County Council as “valuer”. The vendor/builder had no answer, was decreed and has not appealed; the “valuer” was held by the trial judge not to have fallen short of the standard of care required of him; the County Council was decreed with a right of contribution of 90 per cent from the vendor/builder (a right which is worthless) and it appeals against the award made to the first plaintiff. The second plaintiff succeeded against the vendor/builder and no appeal has been pursued in that respect. In my judgment, the appeal by the County Council fails.
1. The Loan Scheme
Section 39 of the Housing Act, 1966, made provision for loans by housing authorities for acquisition or construction of houses and for the making of regulations for that purpose, at the same time repealing a great body of legislation going back to 1878 and set out in the first schedule to the Act. The Minister made the Housing Authorities (Loans for Acquisition or Construction of Houses) Regulations, 1972. He prescribed that the amount of the loan should not, so far as relevant, exceed £3,000 or 95 per cent of the value of the house. The expressed limitation was, subsequently, raised. Regulation 4 (1) provided that the value of a house, germane to this case, should be “the amount which, in the opinion of the housing authority, the house, if sold on the open market, might reasonably be expected to realise together with so much, if any, of the legal and other expenses incidental to the acquisition of the ownership of the house as the housing authority may consider proper”. Regulation 5 provided for a form of appeal from the determination as to value from the housing authority to the Commissioner of Valuation.
16. Regulation 12 provided:-
“Before making a loan a housing authority shall satisfy themselves –
(a) that the borrower occupies or intends to occupy the house as his normal place of residence;
(b) that the value of the ownership of the house is sufficient to provide adequate security for the loan;
(c) that the title to the ownership is one which an ordinary mortgagee would be willing to accept;
(d) that the borrower is not a borrower in respect of any other loan made by them under the Act or is not the proprietor of a house in respect of which an advance, or any part of an advance, made by them under the Small Dwellings Acquisition Acts, 1899 to 1962, remains unpaid;
(e) that the repayment of the loan to the housing authority is secured either by
(i) an instrument vesting the ownership (including any interest already held by the borrower) in the housing authority subject to the right of redemption by the borrower, or
(ii) in a case where the ownership of the borrower consists of a leasehold interest, by an instrument of mortgage by subdemise subject to a nominal reversion, vesting the term of the subdemise in the housing authority subject to the right of redemption by the borrower, or
(iii) where the title to the ownership is registered under the provisions of the Registration of Title Act, 1964 by an instrument charging the ownership with payment to the housing authority of the amount of the loan together with the interest thereon.”
17. Louth County Council, in carrying out its statutory duty, published a scheme for the making of loans by the Council under s. 39 of the Act of 1966 and the Regulations of 1972, as amended. I quote the following:-
“6. No advance shall be made by the Council until the Council is satisfied, as a result of a report by the Council’s valuer, as to the actual value of an existing house . . . and that . . . is so situated as to be readily saleable, in the event of a sale by the Council becoming necessary, due to default by the borrower.”
“16. (a) Every house in respect of which an advance is made must be insured against fire by the borrower for at least the full value of the house.”
18. As part of the scheme the Council further published an application form, which contained the following provision:-
“2. Applications shall be considered only from persons who are unable to obtain loans from commercial agencies, e.g. Building Societies, Banks and whose circumstances would otherwise necessitate their being re-housed by the Council.”
2. The application
19. The first plaintiff duly applied for a loan of £12,000; the County Council retained the third defendant acting through Pascal McLoughlin, who had 25 years experience of this kind of work, to prepare a valuer’s certificate. Mr. McLoughlin did so in the form (dated 12th August, 1980) appended to this judgment, valuing the house at approximately £25,000. On foot of that valuer’s certificate, the Council allocated a loan of £12,000 to the first plaintiff and by letter of the 29th August, 1980, duly notified him with the requirement that the house should be insured against fire for the sum of £26,000 at least.
20. The plaintiffs, who lived in Newry, were moving to Dundalk in 1980 and had asked Mr. Matthews, an auctioneer, to be on the look out for a house, resulting in the house at Lower Faughart. They visited the house with Mr. Matthews in the summer of 1980 and could see nothing wrong with it; Mr. Matthews told them that it was a good buy. The first plaintiff applied for the loan and paid what he described as “a surveyor’s fee” thinking that “if the surveyor passed the house then the house was okay, the County Council would not have given me the loan if the house was not alright.” When asked that maybe he should have got an engineer or surveyor on his own behalf he replied:-
“I thought that when the Council went out and they passed it, their surveyor was out, if the Council were putting half the money into it, their word was as good as anybody’s, you know, because half their money was in it too.”
21. Finally, the trial judge put to him:-
“It seems to me that the effect of his evidence seems to be that it was his experience in Northern Ireland which lead him to believe somebody would go out – is that right?”, and the first plaintiff agreed.
3. The condition of the house
The learned trial judge in findings now unchallenged held that all items of floor construction were sub-standard; that the foundation was structurally unsound and unsafe; that there were noticeable slopes in floors and ceilings and poor timber-work; all being “hidden” defects, in the sense that they were not discoverable by the sort of examination which a lay person with no professional qualifications would be expected to carry out:- “But I accept the evidence (and this is of particular importance when considering the claim against the defendant Council) that these defects were discoverable by a reasonably careful inspection carried out by a person with ordinary professional qualifications in house construction such as those that an architect or an engineer would have obtained.” [1985] I.R. 29 at pages 35 and 36.
Further defects of a similar kind were then identified. Pascal McLoughlin regarded his functions as requiring him to consider merely the visual appearance of the house and then informed the Council of its market value. This he did on the 12th August, 1980, in the “valuer’s certificate”.
4. The legal relationship
22. Costello J. held [1985] I.R. 29 at p. 52:-
“In the light of the facts to which I have referred it seems to me that there was a sufficient relationship of proximity or neighbourhood between the plaintiff and the Council such that in the reasonable contemplation of the Council carelessness on their part in the carrying out of the valuation of the bungalow the plaintiff was going to purchase might be likely to cause him damage. They should have been aware that it was unlikely that the plaintiff (in view of his knowledge that they were going to value the premises and his very limited means) would himself employ a professional person to examine it and so they should have known that if the valuation was carelessly done it might not disclose defects in the premises and as a result the plaintiff might suffer loss and damage. So it seems to me that a prima facie duty of care existed and there is nothing in the dealing between the parties which should restrict or limit that duty in any way. In particular no warning against reliance on the proposed valuation was given.”
23. Depending his view on s. 39 of the Act of 1966, the learned trial judge held that there was a private law duty of care in favour of the first plaintiff it being “just and reasonable” that the Court should so hold.
24. Mr. O’Flaherty S.C., on behalf of the second defendant, has rested his appeal upon three main propositions:-
(1) That since each party (the plaintiffs and the County Council) had to look to themselves to safeguard their situation, there was no duty of care cast upon the Council in respect of the first plaintiff. None such arose from their established proximity.
(2) Even if there was such a duty, that there was no risk of damage reasonably foreseeable to the County Council and, consequently, no breach of duty.
(3) That the omission held to be culpable arose from a decision of policy or discretion which was not open to question by the courts in an action such as this. It was, it is said, a policy decision within the discretion of the County Council not to have any inspection other than that which produced a valuer’s certificate: to carry out such inspections in every instance through an engineer or like qualified person would greatly reduce the amount of money available in loans with consequent damage to the true purpose of the relevant part of the Housing Act.
25. It is convenient first to deal with the third proposition. The monetary argument does not bear critical examination. The County Council would not require to have an engineering inspection in any case in which the relevant house is newly built since procedures for grants involve inspections at the material times with regard to such things as foundations etc., whilst the house is being built. Likewise, houses of significant age would not require such inspections to deal with defects arising from subsidence; visual inspection by a relatively unqualified person would be quite adequate to disclose such defects. In any event, I see no bar to the County Council expressly excluding any representation to be inferred from the fact that it sanctions a particular loan.
26. Since preparing the draft of this judgment my attention has been drawn to the decision of the Court of Appeal in England in Harris v. Wyre Forest D.C. [1988] 1 All E.R. 691 where, in a somewhat analogous case, a local authority was relieved of liability in negligence because of such an exclusion clause.
27. Having regard to this conclusion, it is not necessary for me to express an opinion as to whether or not what so-called policy considerations are, in that context, free from review in the courts in an action of this kind. The argument traversed a wide field of authority all but four of which were cited to Costello J. Curran v. Northern Ireland Co-Ownership Housing Association Ltd. (1985) 8 N.I.L.R. Bulletin 22 was decided by Carswell J. in the Northern Ireland High Court after the High Court hearing in the instant appeal although before judgment was delivered. With the able assistance of counsel, we have travelled well charted legal seas seeking, for my part, to find a well marked haven, whether it be in Australia, Canada, Northern Ireland or England. Certainly, the judicial complements manning the several ports are not marked by unanimity. The Canadian Supreme Court divided three to two, the High Court of Australia similarly, and whilst the House of Lords in Curran [1987] A.C. 718 was unanimous it did not deal with a case like to the present one, the point in which it was dealt with in the Court of Appeal in Northern Ireland (1986) N.I.L.R. Bulletin 1 was not the subject of an appeal itself. Much judicial eloquence and invention has been spent on examining and analysing the observations of Lord Atkin in Donoghue v. Stevenson [1932] AC 562. Anns v. Merton London Borough [1978] AC 728 was described by Lord Bridge in Curran as being the high water mark of the application of Donoghue with particular reference to the words of Lord Wilberforce identifying two stages of establishing liability for breach of duty to take care. The elaborate analysis of Brennan J. in the High Court of Australia in Sutherland Shire Council v. Heyman (1985) 59 A.L.J.R. 564 led to the verbally attractive proposition of incremental growth in this branch of the law; such a proposition, however, suffers from a temporal defect – that rights should be determined by the accident of birth. Albeit that Anns v. Merton London Borough [1978] AC 728 is the high-water mark, I would not seek to dilute the words of Lord Wilberforce at pp. 751 and 752 :-
“[T]he position has now been reached that in order to establish that a duty of care arises in a particular situation, it is not necessary to bring the facts of that situation within those of previous situations where a duty of care has been held to exist. Rather the question has to be approached in two stages. First one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the latter – in which case a prima facie duty of care arises. Secondly, if the first question is answered affirmatively, it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed or the damages to which a breach of it may give rise . . .”
In Curran (1985) N.I.L.R. Bulletin 22 after an exhaustive review of authority, Carswell J. accepted the proposition from Charlesworth and Percy on Negligence that “it will be an essential fact to he proved, in any case, that the defendant has assumed responsibility for giving his opinion, advice or even information” and that the voluntary assumption of responsibility for the accuracy of the statement in question is the basis of the doctrine. Carswell J. later examined the proposition that it follows from the fact that a public body is under a statutory power or duty that it owes a duty of care at common law with particular emphasis on Peabody Fund v. Sir Lindsay Parkinson Ltd. [1985] AC 210, a case cited by the learned trial judge in the instant appeal. As Carswell J. pointed out in Curran, Peabody Fund v. Sir Lindsay Parkinson Ltd. [1985] AC 210, in the jurisdiction where it would be binding, is not a conclusive authority on the ambit of the duty of care although affording a valuable amount of guidance. Carswell J. rested his judgment finally upon the view that the obligation resting upon the Housing Executive was to see to the proper application of public money in improvement grants, the latter limb of the claim in Curran.
28. In the Court of Appeal in Northern Ireland (1986) 8 N.LL.R. Bulletin 1, Gibson L.J. delivering the judgment of the Court, carried out a like exercise in the review of authority, identifying s. 30 of the Building Society Act (Northern Ireland), 1967, and s. 30 of the English Building Society Act, 1962, as creating a statutory warranty by a Building Society to a member that the purchase price is reasonable in the event of it making an advance to the member to defray the purchase price. Again, the conclusion (p. 17) was that:
“. . . though the Executive must be taken to have known when it offered the mortgage that the plaintiffs would rely upon it to the extent of deducing that an appropriate valuation had been given to the Executive, there were no facts upon which one could assume that the Executive was accepting responsibility for the careful preparation of the valuation which preceded the offer.”
Again, at p. 20:-
“I am unable to accept that the Executive by informing the plaintiffs of the amount which it was willing to advance on the security of the house, though it was a mistaken figure negligently arrived at, can be taken impliedly as undertaking to be responsible for any loss suffered as a result of negligence in the appointment of the valuer at the suit of the plaintiff, who without any inducement by or representation on behalf of the Executive voluntarily elected not to be advised in the matter but to accept the figure proposed by the Executive as the amount of the advance to him. In reaching that conclusion, I am conscious of the caveat issued by Lord Reid in Mutual Life and Citizens Assurance Co. Ltd. v. Evatt [1971] AC 793 at p.813 of the report with reference to the terms of the speeches in Hedley Byrne, namely ‘we do not think it would be useful to quote expressions from speeches used without having in mind circumstances such as we have here’. But insofar as the facts of this case are clearly within the area of contemplation in the Hedley Byrne case, I have no doubt that a condition precedent to liability is that the Executive should have indicated to the plaintiffs, or so acted as to mislead them into believing, that the Executive was accepting responsibility for its opinion. That condition is not established by the matters set out in the statement of claim or by any of the other matters which we have permitted the plaintiffs to call in aid.”
29. The latter quotation identifies a circumstance that did not help the resolution of the difficult legal issue in Curran that the case was tried and disposed of without evidence upon issues raised by what were clearly defective pleadings.
Yuen Kun Yeu v. A..-G. of Hong Kong [1987] 3 W.L.R. 776 was a decision of the Judicial Committee of the Privy Council in which the judgment of the Committee was delivered by Lord Keith of Kinkel. Having cited the familiar passage from Lord Wilberforce in Anns he pointed to the subsequent judicial resiling from the two-stage test in England and in Australia (by Brennan J. and Gibbs C.J. in Sutherland). Lord Keith disposed of the second stage of the Anns test, the public policy factor, by reference to Rondel v. Worsley [1969] 1 AC 191 dealing with the liability of a barrister for negligence in the conduct of proceedings in court, and Hill v. Chief Constable of West Yorkshire [1987] 2 W.L.R. 1126 the claim by the mother of the last victim of the “Yorkshire Ripper” for damages on the grounds of the negligence of the police in failing to apprehend the murderer before the death of her daughter. Glidewell L.J. as an additional reason for dismissing the action at its preliminary stage, pointed to what might be termed the “floodgates” or “appalling vista” line of argument. Lord Wilberforce, in McLoughlin v. O’Brian [1983] 1 AC 410 had been unimpressed by the floodgates reasoning. Lord Keith concluded at p. 785 that:-
“In view of the direction in which the law has since been developing, their Lordships consider that for the future it should be recognised that the two-stage test in Anns v. Merton London Borough Council [1978] AC 728, 751-752, is not to be regarded as in all circumstances a suitable guide to the existence of a duty of care.”
30. Insofar as it is used to support the appellant’s case, I find the reasoning lacking in force. Whilst Costello J. essentially rested his conclusion on the “fair and reasonable” test, I prefer to express the duty as arising from the proximity of the parties, the foreseeability of the damage, and the absence of any compelling exemption based upon public policy. I do not, in any fashion, seek to exclude the latter consideration, although I confess that such a consideration must be a very powerful one if it is to be used to deny an injured party his right to redress at the expense of the person or body that injured him.
The claim here was for damages for injury caused to the plaintiff’s furniture and clothing and the nature of the plaintiff’s occupation of the flat provided by Dublin Corporation. So far as relevant to the instant appeal, it is apposite to quote the words of O’Higgins C.J. at pp. 408-4 10:-
“To answer this question, [the application of an exclusionary rule] regard must be had to the Housing Act, 1966, under which this letting was made, and to the position, powers and obligations of the defendants under that Act. The Act of 1966 is a major piece of social legislation which is aimed at dealing with the distressing problem of families that are unable to provide for themselves and being either homeless or living in overcrowded, unhealthy and unfit houses. The Act sought to establish administrative machinery under which such conditions could be eliminated gradually throughout the country, and by means of which new and suitable dwellings could be provided for those in need . . . The Act also empowers the Minister for the Environment to provide grants for persons endeavouring to provide their own houses, either by building, or by repairing or reconstructing existing accommodation: see sections 13-23. The Minister was also empowered to give grants to housing authorities in order to promote and finance schemes for the assistance of people seeking to build or otherwise provide their own housing accommodation: see sections 24-43 . . . In short, the aim of the Act of 1966 was to bring into existence decent housing which, in each functional area, would be introduced by the housing authority and the standards of which would be maintained by that authority.”
31. Later at p. 412 he said:-
“I will merely say that the statutory duties imposed by the Housing Act, 1966, are so imposed for the benefit of the public. Under the Act they are enforceable under s. 111 by the Minister. In these circumstances no right of action is given to a private citizen if the complaint is merely that the duties so imposed, or any one of them has or has not been carried out. The mere fact that a housing authority has failed to discharge a duty imposed upon it does not give to a complaining or aggrieved citizen a right of action for damages.”
32. Again, at p. 414, he said:-
“In this case it is sufficient to say that many of these recent decisions recognise a possible liability where the exercise of statutory powers in a negligent manner results in injury to persons occupying houses for whose protection or benefit these powers were intended . . . Obviously, that inspection should have been carried out to ensure what had been built or provided accorded with the statutory requirements as to fitness for human habitation. Had the inspection by the defendants been so carried out, it would have disclosed that the ventilation system in this particular flat was defective and inadequate and that the defect was likely to lead to excessive humidity and to the kind of conditions of which the plaintiff and his family subsequently complained. In the circumstances the undetected defect in the ventilation was a serious concealed danger of which the incoming tenant, the plaintiff, could not have been aware and which he could not reasonably have been expected to discover. In these circumstances I can see no basis for suggesting that the principle of Donoghue v. Stevenson should not apply.”
33. Henchy J., having referred to the Act of 1966, said at p.419:-
“When the defendants, as the housing authority, prepared and adopted a building programme and then exercised their powers under s. 56 , sub-s. 1, to provide these flats for letting, it was a necessary postulate of the statutory scheme of things that the flats would not add to the stock of houses unfit or unsuitable for human habitation. Indeed, it would be positively inconsistent with the powers and the duties of the defendants, as a housing authority under the Act, to provide a flat that was not fit for habitation. The defendants’ powers (set out in ss. 66-69) of getting uninhabitable houses repaired, or closed and demolished if not repairable, are so specific and drastic that it must be deemed a necessary element of the statutory intent that the defendants are to use their powers under the Act in such a way that a dwelling built and let by them is fit for habitation, and that the tenant of the dwelling may act on an unarticulated assurance by them that it is fit for habitation. In other words, the letting agreement in this case should be read as if it contains an express term warranting the flat to be habitable.”
34. Later, at p. 421 he said:-
“Following on Donoghue v. Stevenson it has been established by a line of decisions (such as Dutton v. Bognor Regis U.D.C., Anns v. Merton London Borough and Batty v. Metropolitan Realisations Ltd.) that where a person, including a builder or a local authority, carelessly provides a dwelling in which there is a concealed defect which the occupier could not have discovered by inspection, the person who provided the dwelling may be liable in negligence for personal injury or economic loss suffered as a result of the defect. The precise conditions or limitations of that liability need not now be considered, for I have no doubt that the principle of liability evolved in those cases is applicable to the circumstances of this case.”
In Shelton v. Creane and Arklow U.D.C. (Unreported, High Court, 17th December, 1987) Lardner J. accepted the principle stated by Costello J. in the instant case.
35. I turn then to the two main propositions advanced in support of the appeal:-
1. The duty of care,
2. Reasonable foreseeability.
1. The duty of care
36. The proximity of the parties is clear: They were intended mortgagors and mortgagee. This proximity had its origin in the Housing Act, 1966, and the consequent loan scheme. This Act imposed a statutory duty upon the County Council and it was in the carrying out of that statutory duty that the alleged negligence took place. It is a simple application of the principle in Donoghue v. Stevenson [1932] AC 562 confirmed in Anns v. Merton London Borough [1978] AC 728 and implicit in Siney v. Corporation of Dublin [1980] I.R. 400 that the relationship between the first plaintiff and the County Council created a duty to take reasonable care arising from the public duty of the County Council under the statute. The statute did not create a private duty but such arose from the relationship between the parties.
2. Reasonable Foreseeability
37. In my view, it does not require much imagination for the officers of the Housing Authority to contemplate that a purchaser under the scheme will both lack the personal means of having an expert examination and may well think, as the first plaintiff thought, that the very circumstances of the housing authority investing its money in the house was a badge of quality.
38. These two considerations are both involved in the first leg of the Anns principle. I do not understand it to be argued that there are considerations which ought to negative or to reduce or limit the scope of duty or the class of person to whom it is owed or the damages to which a breach of it may give rise, within the second leg of the observations of Lord Wilberforce. It follows, in my view, without entering into the question of whether or not it is “just and reasonable” to impose the duty, that the duty arose from the proximity of the parties, the injury caused was reasonably foreseeable, the breach was established, and the first plaintiff was entitled to succeed.
39. The appeal on liability should be dismissed.
Siney v. Corporation of Dublin
[1980] I.R. 400. Supreme Court
O’Higgins C.J.
This is a Case which was stated pursuant to the provisions of s. 16 of the Courts of Justice Act, 1947, by His Honour Judge G. A. Clarke of the Circuit Court; he seeks the opinion of the Supreme Court on certain questions of law which arise on the facts as he has found them. It is necessary at the outset to set out these facts very generally.
The plaintiff, being in need of housing accommodation, applied to the defendant corporation for a house. On the 23rd August, 1973, he was allotted by the defendants a flat at No. 56 Avonbeg Gardens, Tallaght. This flat was intended for the accommodation of the plaintiff, his wife and two children. On the same day he signed a form which was stamped “First Letting.” This. form contained the standard letting conditions of the defendants and a description of the flat as “a dwelling provided by the Corporation under the Housing Act, 1966.” The undertaking in the form which was signed by the plaintiff was an undertaking by him to observe these standard letting conditions. The flat in question was one of a number at Avonbeg, Tallaght,
which were built and provided for the defendants through the National Building Agency. The designs for these flats were prepared by the principal architect for the National Building Agency in consultation with the defendants’ engineering and administrative staff. The work of building was carried out by a private contractor under the supervision of the architect of the National Building Agency. Upon completion and handing over to the defendants, the flats were inspected by their officials.
The plaintiff and his family were the first family to live in the flat in question. When they moved in, water appeared under the floor covering in the bedroom. Later, a putty-like fungus appeared on the bedroom wall under the window. This then spread to other walls and to the skirting in the bedroom and later to the sittingroom and kitchen. This fungus was accompanied with a heavy damp smell and a cold feeling to anyone entering the rooms. Efforts to eliminate this problem were made but did not prove successful.
On the evidence he heard, the learned Circuit Court judge found the cause of the problem to be insufficient ventilation. He found this defect to be such that, despite a reasonable and proper use of the heating and ventilation systems by the plaintiff and his family, dampness and humidity in the flat could not be overcome. This defect in the ventilation system could have been discovered prior to the letting to the plaintiff if a relative humidity test had been carried out. Such test was neither carried out by the architect for the National Building Agency nor by anybody else. By reason of the inadequacy of the ventilation system, the learned Circuit Court judge found that the flat was unsuitable to the plaintiff and his family. The judge also found that, as a consequence, the plaintiff had suffered certain damage. On the facts as found by the judge, he has submitted the following questions for determination by this Court.
“(a) Do the facts, as found, constitute a breach by the defendants of their contract with the plaintiff herein? If the answer is Yes, is the plaintiff entitled to damages?
(b) Do the facts as found by me constitute a breach by the defendants of their statutory duty under the Housing Act, 1966, and the regulations made thereunder? If the answer to (b) is Yes, is the plaintiff entitled to damages?
(c) Do the facts as found constitute negligence on the part of the defendants, their servants or agents? If the answer to (c) is Yes, is the plaintiff entitled to damages?
(d) Do the facts as found by me constitute a nuisance created by or maintained by the defendants, their servants or agents? If the answer to (d) is Yes, is the plaintiff entitled to damages?”
Breach of contract
The first question involves a consideration as to whether, in the particular letting of this flat to the plaintiff, a warranty can be implied as to its fitness or suitability for habitation by the plaintiff and his family. This is so because the document which was signed on the 23rd August, 1973, contains 32 conditions which either define the rights of the defendants or specify the obligations of the plaintiff tenant. There is no express warranty on the part of the defendants as to the suitability of the flat for any particular purpose, nor is such a warranty expressly excluded. Therefore, it becomes a question as to whether such a warranty can be implied in this particular letting in the circumstances. The law as to the circumstances under which a warranty may be implied in a contract was stated many years ago by Bowen L.J. in this wellknown passage from p. 68 of his judgment in The Moorcock 20 ;
“Now, an implied warranty, or, as it is called, a covenant in law, as distinguished from an express contract or express warranty, really is in all cases founded on the presumed intention of the parties, and upon reason. The implication which the law draws from what must obviously have been the intention of the parties, the law draws with the object of giving efficacy to the transaction and preventing such a failure of consideration as cannot have been within the contemplation of either side; and I believe if one were to take all the cases, and they are many, of implied warranties or covenants in law, it will be found that in all of them the law is raising an implication from the presumed intention of the parties with the object of giving to the transaction such efficacy as both parties must have intended that at all events it should have.”
At once the question arises as to whether this principle of law has any application or relevance in a case such as the present. Counsel for the defendants submit very strongly that it has not. As this was a letting of an unfurnished flat or dwelling, they assert that no such warranty can be implied. In this respect they rely on a long line of authorities as illustrated by Sutton v.Temple 21 ; Hart v. Windsor 9 ; Brown v. Norton 7 and Chambers v. Cork Corporation. 14 Those authorities established the proposition that the mere
letting of land, with or without an unfurnished dwellinghouse upon it, carried no such implication of a warranty with regard to fitness for any particular purpose. Those cases applied the rule of caveat emptor to all lettings of land, with or without a house thereon, in the same way as it was applied to contracts for the sale of land.
An exception, which is not relevant to this case, was recognised where a furnished house was let for occupation; in such a case a covenant on the part of the landlord that the premises would be fit for such occupation at the commencement of the tenancy is implied: Smith v. Marrable 8 ; Wilson v. Finch Hatton 10 ; Collins v. Hopkins 22 and Brown v. Norton. 7 A further exception was recognised where a lessor sold by way of lease a house under construction; in such circumstances terms could be implied with regard to the completion of the house, the suitability of the materials used, the quality of the workmanship and its fitness for habitation: Norris v. Staps 23 ; Pearce v.Tucker 24 ; G. H. Myers & Co. v. Brent Cross Service Co. 25 ; Hall v. Burke 26 and Brown v. Norton. 7
There can be no doubt that the authorities mentioned (and others which are too numerous to cite) do establish the proposition that a mere letting of land, with or without an unfurnished house thereon, carried with it no implication that either the land or the house would be fit for any particular purpose. This rule probably developed when the main subject of conveyances and leases was land, and when buildings and houses were often of secondary importance in a society that was thinly urbanised. To-day the application of such a rule in a society which is becoming more and more urbanised, and in which the building and sale of houses has become a major industry, may appear somewhat harsh and inappropriate. However, whether the rule has or has not survived changes in society is not in issue in this case. The issue is whether it can be applied, or ought to be applied, in the particular circumstances of this letting by the defendants to the plaintiff.
To answer this question, regard must be had to the Housing Act, 1966, under which this letting was made, and to the position, powers and obligations of the defendants under that Act. The Act of 1966 is a major piece of social legislation which is aimed at dealing with the distressing problem of families that are unable to provide for themselves and being either homeless or living in overcrowded, unhealthy and unfit houses. The Act sought to establish administrative machinery under which such conditions could be eliminated gradually throughout the country, and by means of which new and suitable dwellings could be provided for those in need. Under its
provisions the defendant corporation became a housing authority. As such the defendants were given the statutory duty of inspecting and assessing the adequacy of the supply and the condition of houses in its functional area, having regard to unfitness or unsuitability for human habitation and overcrowding: see section 53. The defendants were also obliged to prepare and to adopt a building programme which would have many objectives, but amongst which were “the repair, closure or demolition of houses which are unfit or unsuitable for human habitation” and “the elimination of overcrowding” and “the provision of adequate and suitable housing accommodation for persons (including elderly or disabled persons) who . . . are in need of and are unable to provide such accommodation from their own resources” see section 55.
The defendants were also obliged to draw up a scheme of priorities for the letting of available housing accommodation, having regard to the primary objectives of “the repair, closure or demolition of houses which are unfit in any respect for human habitation” and “the elimination of overcrowding”and “the provision of adequate and suitable housing accommodation for persons . . . who, in the opinion of the housing authority are in need of and are unable to provide such accommodation from their own resources” and “the provision of adequate and suitable housing accommodation for persons suffering from pulmonary tuberculosis” see section 60. To deal with the problem of overcrowding and unfit houses, the defendant corporation was given specific statutory powers to enforce the repair of such or their closure or demolition: see ss. 63, 65, 66, of the Act of 1966 as extended by s. 5 of the Housing Act, 1969. These various duties and powers were amplified in detail in various other provisions of the Act.
The Act also empowers the Minister for the Environment to provide grants for persons endeavouring to provide their own houses, either by building, or by repairing or reconstructing existing accommodation: see sections 13-23. The Minister was also empowered to give grants to housing authorities in order to promote and finance schemes for the assistance of people seeking to build or otherwise provide their own housing accommodation: see sections 24-43. In considering whether a house was or was not fit for human habitation, the defendant corporation (and every other housing authority) was obliged to have regard to the extent to which the house was deficient as respects each of the matters set out in the second schedule to the Act of 1966: see sub-s. 2 of section 66. Among the matters
mentioned in that second schedule are “resistance to moisture” and “air space and ventilation.”
Generally, it may be said that under the Act of 1966 the defendant corporation, as a housing authority, was charged with the task, in respect of its own functional area, of ending overcrowding and of eliminating substandard and unsuitable housing for poor people. The defendants were also empowered, and obliged, to let such housing accommodation as they were able to provide, on a priority basis, to people released from these conditions. In short, the aim of the Act of 1966 was to bring into existence decent housing which, in each functional area, would be introduced by the housing authority and the standards of which would be maintained by that authority. It is now necessary to consider the particular letting made to the plaintiff.
This letting was expressed to be a letting of a “dwelling provided by the Corporation under the Housing Act, 1966.” Moreover, it was a letting of one of a number of newly-built flats. Therefore, it was a letting made by the defendant corporation of a dwelling provided under its building programme and let by it in accordance with its scheme of priority for, inter alia, the ending of overcrowding and the elimination of houses unfit in any respect for human habitation. Under these circumstances, can it be said that such a letting carried no implication that the accommodation thereby provided for a necessitous family would be fit for habitation by them? It seems to me that to not imply such a condition or warranty would be to assume that the defendant corporation was entitled to disregard, and was disregarding, the responsibilities cast upon it by the very Act which authorised the building and letting of the accommodation in question.
However, counsel for the defendants relied on the provisions of s. 114 of the Act of 1966 and, accordingly, that section requires to be noted. Sub-sections 1, 2 and 5, of s. 114 provide:
“(1) Subject to subsection (2) of this section, in any contract entered into after the commencement of this section for letting for habitation a house at a rent not exceeding one hundred and thirty pounds per annum there shall, notwithstanding any stipulation to the contrary, be implied a condition that the house is at the commencement of the tenancy and an undertaking that the house will be kept by the landlord during the tenancy, in all respects reasonably fit for human habitation but nothing in this section shall affect the liability of the tenant or occupier of any such house for
any wilful act or default of such tenant or occupier whereby the house is rendered other than reasonably fit for human habitation.
(2) The condition and undertaking mentioned in subsection (1) of this section shall not be implied in any case in which
(a) a house is let for a term of not less than three years on the terms that it be put by the lessee into a condition reasonably fit for habitation, and
(b) the tenancy agreement is not determinable at the option of either the landlord or the tenant before the expiration of three years . . .
(5) In this section, ‘landlord’ means any person who lets for habitation to a tenant any house under a contract to which this section applies, and includes his successor in title.”
Because of s. 114, counsel for the defendants contended that, as a special condition as to fitness for human habitation was implied by the section in respect of houses let at a rent not exceeding £130 p.a., no such condition ought to be implied in respect of houses let at a higher rent. Since the letting to the plaintiff was at a higher rent it was said that, on this account, the implication of such a condition in the plaintiff’s letting was not possible. This argument rests on the assumption that the section applies to the defendant corporation, as a housing authority. In my view, this assumption is not well founded. The section refers both to a condition that the house is at the commencement of the tenancy and to an undertaking that it will be kept by the landlord during the tenancy in all respects reasonably fit for human habitation. As the condition and the undertaking are to the same effect and relate to the same tenancy, it seems clear that they are both intended to be binding on the landlord as defined in the section. It would seem improbable that the condition was intended to be binding on a wider category of landlords than the undertaking. Sub-section 2, in excluding the implication of both the condition and the undertaking in the circumstances mentioned at (a)and at (b) where “the tenancy agreement is not determinable at the option of either the landlord or the tenant before the expiration of three years,” again envisages the same type or category of landlord as being bound by, or excluded from, both the condition and the undertaking. By sub-s. 5 of s. 114 the word “landlord” is given the meaning of “any person who lets for habitation to a tenant any house . . .” However, by s. 2, sub-s. 1, of the Act the word “person,” when used in the Act, is given a special meaning. The word is there defined as follows:
“‘person’, except in this section and in sections 15 and 34 of this Act, does not include a housing authority.”
It seems to follow that the “landlord” in s. 114 cannot include a housing authority and that, therefore, the section does not apply to the defendant corporation. If I am right in this view, then this entire argument is without substance. Indeed, it probably follows that the reason why housing authorities were not included in and covered by s. 114 is that they were already burdened with a clear statutory responsibility to provide and to let only dwellings which complied with the terms of the condition and undertaking imposed by the section.
Accordingly, I have come to the conclusion that the letting made to the plaintiff by the defendants did include an implied warranty that the premises let would be reasonably fit for human habitation and, therefore, I would answer affirmatively the first question in the Case Stated. In my view the plaintiff is entitled to damages on this account.
Statutory duty
In my view the second question in the Case Stated should be answered in the negative. I will merely say that the statutory duties imposed by the Housing Act, 1966, are so imposed for the benefit of the public. Under the Act they are enforceable under s. 111 by the Minister. In these circumstances no right of action is given to a private citizen if the complaint is merely that the duties so imposed, or any one of them, have or has not been carried out. The mere fact that a housing authority has failed to discharge a duty imposed upon it does not give to a complaining or aggrieved citizen a right of action for damages.
Negligence
On behalf of the defendants it was submitted that, as the lessors of the flat, they could be under no liability at common law in respect of injury or damage caused by a defect existing in the premises at the time of the letting. If correct, this submission means that what is known as the principle in Donoghue v. Stevenson 27 has no application in the circumstances of this case and that, as landlords, the defendants cannot be made liable in negligence in respect of defects existing in the premises which they have let. This submission is supported by an impressive series of decisions commencing
before Donoghue v. Stevenson 27 but continuing after the date of that decision: see Robbins v. Jones 28 ; Cavalier v. Pope 12 ; Bottomley v. Bannister 29 ; Otto v.Bolton and Norris 30 ; Davis v. Foots 31 ; McGowan v. Harrison 13 and Chambers v.Cork Corporation. 14 The immunity originated as an immunity enjoyed by vendors or lessors of land but seems to have been extended to vendors and lessors of buildings erected upon land and to defects in such buildings. It is not easy to see the basis in logic for the existence of such an immunity, particularly where the defect which causes the damage was known or could have been known to the lessor, were it not for his carelessness, and was not known and could not have been known to the tenant or to those whom he brought into the building or house pursuant to the letting. Because of this difficulty of finding a logical basis to justify a general immunity accorded to all vendors and all lessors in relation to defects in premises sold or let, it is not surprising to find in recent decisions certain clear exceptions being established.
In Gallagher v. N. McDowell Ltd. 32 the Court of Appeal in Northern Ireland refused to regard the immunity as being one which attached to realty. In that case the court held that the builders were liable for injury to the wife of the tenant of a house let by the Northern Ireland Housing Trust; the wife’s injury had been caused by a defect in the house. Lord MacDermott L.C.J. said at p. 38 of the report:
“In my opinion, the cases since Donoghue v. Stevenson 27 show that the land-owner’s immunities, which I have described as settled before that decision, have not been disturbed by it. But the fact that these immunities arise in relation to defects and dangers on land does not mean that the law imposes no neighbourly duty of reasonable care as respects defects and dangers of that kind. The immunities attach to land-owners as such, and I do not think one is at liberty to jump from that to saying that the law of negligence in relation to what is dangerous draws a clear distinction between what are chattels and what, by attachment or otherwise, form part of the realty. Why should it? Such a distinction does not justify itself, and it is not required by the immunities I have mentioned when one is not dealing with land-owners as such.”
In that passage from his judgment, Lord MacDermott seems to assume a continuing immunity for land-owners, as such, from the rule in Donoghue v.Stevenson 27 in respect of defects or dangers on their land. Such a view of the law is not consistent with the decisions of this Court in Purtill v. Athlone
U.D.C. 3 and McNamara v. Electricity Supply Board. 2 In relation to their particular facts, those cases regarded the liability of the occupier of land (whether as owner or otherwise) in respect of defects or dangers found on the land as proper to be treated under the principles of Donoghue v. Stevenson. 27
In Dutton v. Bognor Regis U.D.C. 15 it was held that a local authority could be liable in respect of its building inspector’s negligence in certifying that a building, which was defective, complied with local bye-laws. In Sparham-Souterv. Town Developments 33 the English Court of Appeal confirmed both the developer’s and the local authority’s liability in similar circumstances. In the recent decision of the House of Lords in Anns v. Merton London Borough 16 it was held that a local authority, which was negligent in the exercise of its powers or functions with the result that a defective building was constructed and the occupiers were thereby injured, could be held liable at common law. Whether these decisions, some of which suggest a liability on the part of the builder although he was a vendor or lessor, indicate a trend towards applying the principles of Donoghue v. Stevenson 27 irrespective of whether the defective premises were sold or let, if the circumstances justify the application, is a question which does not arise in this case.
In this case it is sufficient to say that many of these recent decisions recognise a possible liability where the exercise of statutory powers in a negligent manner results in injury to persons occupying houses for whose protection or benefit these powers were intended. Here the defendants were given by the Housing Act, 1966, the power to provide dwellings for persons, such as the plaintiff, who were unable to provide houses for themselves. In this instance, the defendants chose to exercise this power through the medium of the National Building Agency Ltd. Having decided to do so, the defendants remained privy to the design of the dwellings to be erected and exercised a supervision over what was being done.
Before accepting the completed flat, which was intended for allotment or letting to a family such as the plaintiff’s, the defendants carried out an inspection. Obviously, that inspection should have been carried out to ensure that what had been built or provided accorded with the statutory requirements as to fitness for human habitation. Had the inspection by the defendants been so carried out, it would have disclosed that the ventilation system in this particular flat was defective and inadequate and that the defect was likely to lead to excessive humidity and to the kind of conditions of which the plaintiff and his family subsequently complained. In the circumstances the undetected defect in the ventilation was a serious concealed danger of
which the incoming tenant, the plaintiff, could not have been aware and which he could not reasonably have been expected to discover. In these circumstances I can see no basis for suggesting that the principle of Donoghuev. Stevenson 27 should not apply. The inspection should have been carried out on the basis that the flat was to be handed over for occupation as a dwelling to a family entitled to expect that it would be one which was fit for human habitation. Because the inspection was defective, the flat was handed over in a condition in which it was not so fit. The result was that damage and injury was caused to the incoming family. In my view, on the facts found by the Circuit Court judge the defendants ought to be held liable in negligence.
As to the suggestion that liability in negligence should not be held to attach to the defendants because of the contractual relationship existing between them and the plaintiff, I agree with what will be said by Mr. Justice Henchy in this regard in the judgment he is about to read.
Accordingly, I would answer the third question affirmatively and say that, as a result, the plaintiff is entitled to damages in respect of such injury or damage as was caused to him as a result of the defendants’ negligence.
Nuisance
The fourth question has not been argued in this Court. On the facts as found by the learned Circuit Court judge, it does not seem to me that any question of liability for nuisance could arise. Therefore, it follows that this question should be answered in the negative.
Damages
I should like to add something with regard to damages. These were found by the Circuit Court judge to be £325, of which £175 was for damage to furniture and clothing. With regard to what was termed “interference with the ordinary comfort and convenience” of the plaintiff and his family, the Circuit Court judge measured damages at £150. It was objected on behalf of the defendants that this sum in respect of inconvenience was not recoverable and that the damages should be confined to what was described as physical or material damage. I think that this is too sweeping a submission. It is true that damages arising from a breach of contract may not be recovered for annoyance, or loss of temper or vexation or disappointment. However, damages may be recovered for physical inconvenience and discomfort: see
McGregor on Damages, (14th ed. p. 61). It seems to me that it is this kind of discomfort and inconvenience which the Circuit Court judge had in mind in his findings as to damages at paragraph 5 of the Case Stated. On the facts of this case I cannot see that any different consideration applies in relation to damages for negligence.
Henchy J.
The Case Stated raises important points as to the liability of a housing authority for defects in a dwelling provided by the authority under the Housing Act, 1966.
The defendant corporation is the housing authority for the city of Dublin. Part VII of the Act of 1966 empowered the defendants to perform their functions outside their functional area. In due exercise of those powers they set about the building of ten blocks of flats in Tallaght, which is in the functional area of Dublin County Council. The defendants called on the services of the National Building Agency Ltd. in connection with the preparatory work. The Agency’s principal architect, in consultation with the engineering and administrative staffs of the defendants, prepared the design for the flats. The building of the flats was done by a private builder. A consultant heating engineer advised on the heating system.
When the flats were completed, they were inspected on behalf of the defendants and passed for acceptance. The defendants then proceeded to make lettings of them. One of them was let to the plaintiff in August, 1973. It comprised a sittingroom, bedroom, kitchen and bathroom. The plaintiff, with his wife and two young children, moved in under a written tenancy agreement. Within two months the floor covering in the bedroom proceeded to rise and, on inspection, water was found underneath. A putty-like fungus appeared on the bedroom walls. The fungus also showed as spots on the kitchen walls. The fungus spread in the bedroom. It produced a very heavy damp type of smell and a chilly atmosphere. Remedial work which was done by the defendants failed to cure the infestation. Bedroom furniture and clothing were destroyed by the fungus and the damp. Life in the flat for the plaintiff and his family was so intolerable that he applied to the defendants for another flat, and his request was granted. He was moved to a new corporation flat in 1975.
The plaintiff has now brought a civil bill in the Dublin Circuit Court claiming damages against the defendants for the damage he incurred while he was in the first flat during the period between 1973 and 1975. The Circuit
Court judge assessed damages at £325, being £175 for clothing and furniture made useless by the damp and fungus, and £150 for interference with comfort and convenience and for necessary repair work. At the request of the defendant corporation the judge has stated this Case for the opinion of the Court as to whether the defendants are liable for those damages (a) for breach of contract, (b) for breach of statutory duty, (c) for negligence or (d) for nuisance. The claim by the plaintiff that the defendants are liable in nuisance has been abandoned. Insofar as the claim is laid in contract and in breach of statutory duty, it has been put forward on the basis that the tenancy agreement should be read as containing an implied condition that the flat was fit for habitation. The problems underlying the questions which have been put by the Circuit Court judge may be resolved by answering two questions:
(1) Are the defendants liable in contract for breach of an implied term of the tenancy agreement, by which they warranted that the flat was fit for habitation?
(2) Are the defendants liable in negligence?
Breach of contract
While there is no express finding on the matter, I take it to be inherent in the judge’s findings of fact that the flat was not fit for habitation when the plaintiff began living in it. Within two months of going into occupation in 1973, he found water oozing through the bedroom floor. After another three weeks the fungus began to appear. From then until he left the flat in 1975 the damp and the fungus, with their accompanying chilly atmosphere and pervasive smell, made life so intolerable for the plaintiff and his family that he was compelled to leave as soon as he was able to get another flat from the defendants. Therefore, it would be in the teeth of the evidence to say that the frat was fit for habitation when the plaintiff moved in. As far as appearances went, everything was then in order but, as events were shortly to prove, the hidden defects made the flat far from habitable when the tenancy commenced.
As the judge has found, the reason for the unfitness of the flat for habitation was a flaw in the design. Specifically, the ventilation was inadequate so that there was excessive condensation. There was a failure by the experts to make the necessary calculations so as to eliminate the danger of excessive relative humidity. The condensation, which was the immediate cause of the trouble, was found by the judge to have been preventable and foreseeable.
The facts found by the judge further show that the defendants were privy to all decisions made as to design. The architect’s plans, drawings and decisions were made in consultation with the defendants’ experts. The design of the heating system was carried out on the advice of a consultant in heating engineering who was highly qualified. He was employed by the National Building Agency but he advised in consultation with the defendants’ experts and those of the Electricity Supply Board. It has been urged on behalf of the defendants that the fault for the defective ventilation design should not be attributed to them. I cannot agree. Whether secondary or partial fault lies with others need not now be considered. The principals in the operation of building the flats were the defendants. On them fell the duty under statute of providing flats which would fulfil their housing obligations under the Act of 1966. If, as was the case, the ventilation design was so defective that some 1015% of the flats had condensation problems, and this particular flat was so badly affected that the plaintiff and his family had to flee from it, the defendants cannot shed responsibility by saying that they relied on expert advice which proved to be faulty. As the housing authority, the defendants were expected by the legislature to ensure that dwellings provided by them under the Act would not have defects which would make them uninhabitable. While the defendants may possibly have rights against third parties, the primary responsibility for the defective design falls on them. They cannot rid themselves of that responsibility by pleading that they delegated the observance of their statutory obligations to others.
It is against that background that an answer must be given to the question whether there is to be read into the plaintiffs tenancy agreement an implied term that the flat was fit for habitation.
The Act of 1966 is markedly different from previous Housing Acts in the extent to which it makes it the duty of a housing authority to plan, control, oversee and provide for the supply of adequate housing in its area. Section 53, sub-s. 1, imposes a duty on a housing authority, at intervals of not more than five years, to inspect the houses in its functional area and to ascertain (inter alia) to what extent there exist in the area houses which are in any respect unfit or unsuitable for human habitation. Section 55, sub-s. 1, makes it the duty of a housing authority, at least once in every five years, to prepare and adopt a building programme. Section 55, sub-s. 3, requires that, in preparing such building programme, the housing authority shall have regard to seven objectives, the first of which is “the repair, closure or demolition of houses which are unfit or unsuitable for human habitation.” The second
schedule to the Act of 1966 numbers “resistance to moisture” and “resistance to transmission of heat” among the tests of habitability.
When the defendants, as the housing authority, prepared and adopted a building programme and then exercised their powers under s. 56, sub-s. 1, to provide these flats for letting, it was a necessary postulate of the statutory scheme of things that the flats would not add to the stock of houses unfit or unsuitable for human habitation. Indeed, it would be positively inconsistent with the powers and duties of the defendants, as a housing authority under the Act, to provide a flat that was not fit for habitation. The defendants’ powers (set out in ss. 66-69) of getting uninhabitable houses repaired, or closed and demolished if not repairable, are so specific and drastic that it must be deemed a necessary element of the statutory intent that the defendants are to use their powers under the Act in such a way that a dwelling built and let by them is fit for habitation, and that the tenant of the dwelling may act on an unarticulated assurance by them that it is fit for habitation. In other words, the letting agreement in this case should be read as if it contained an express term warranting the flat to be habitable.
The tenancy agreement entered into by the plaintiff fully bears out that deduction. The flat was provided under s. 56, sub-s. 1, as a “dwelling,” and that fact alone would have made it incumbent on the defendants to give the plaintiff at least an implied warranty that it was a flat which was fit to dwell in. But apart from that, many of the 32 terms of the written tenancy agreement are directed to specifying what the plaintiff tenant shall do or may not do when dwelling in the flat; there is even a specific term requiring him to dwell in the flat. The tenancy agreement, which was executed by the plaintiff but not by the defendants, begins with the words “in consideration of being allotted a dwelling provided by the Corporation under the Housing Act, 1966, I hereby agree to observe, perform and comply with” the conditions of the letting. Such being the basis of the letting, the defendants must be deemed to have attached to the written words a tacit assurance that the flat was being duly provided under the Act of 1966, i.e., in a habitable condition.
It has been argued on behalf of the defendants that such an implied term is not reconcilable with s. 114, sub-s. 1, of the Act. Subject to specified exceptions, s. 114, sub-s. 1, stipulates that in any contract entered into after the commencement of the section for the letting for habitation of a house at a rent not exceeding £130 p.a. there shall. notwithstanding any stipulation to the contrary, be implied a condition that at the commencement of the tenancy the house is reasonably fit for human habitation and an undertaking that during
the tenancy the landlord (a term which, by the definition in the Act, does not include a housing authority) will keep it so. That provision does not apply directly to this case, because the rent payable by the plaintiff was over £130 p.a. It is urged, however, that the exclusion from the range of s. 114, sub-s. 1, of lettings for a rent above the prescribed limit necessarily excludes an intention that a condition as to habitability should be inferred in such lettings. I do not agree. This provision replaces a corresponding provision in the Housing (Miscellaneous Provisions) Act, 1931, which replaced a like provision in the Housing of the Working Classes Act, 1890, and is merely the re-enactment of a protection given to the tenants of low-rented houses of the kind specified, regardless even of an express covenant to the contrary. As the Chief Justice has pointed out in his judgment, this provision does not appear to apply at all to houses let by a housing authority. Even if it did apply to them, the existence of such a provision could not be treated as a guide to what is to be implied in the letting of a dwelling provided under the Act. To determine what is implied in such a letting, it is the powers and duties of the housing authority under the Act that must be examined and, as I hope I have shown, these necessarily require the housing authority to ensure that the dwelling, when let, is fit for human habitation.
I do not find it necessary or desirable to express an opinion as to the wider question whether there should be held to be implied a condition as to habitability in the letting of every kind of dwellinghouse.
As I construe the law, the plaintiff is entitled to succeed in contract for the particular reason that this flat was provided under the Act of 1966. Therefore, it is academic to consider whether he would be entitled to succeed if the flat had not been provided under the Act. Whether in such circumstances he would be entitled to sue on an implied condition as to habitability is a point on which this Court has never pronounced. Were it necessary to decide the point, it is not unlikely that the Chief Justice would consider it necessary to convene a full Court for that purpose, for there are long-standing judicial authorities which hold that a condition as to habitability is not to be implied in the letting of an unfurnished dwellinghouse. If those authorities are to be set aside, it would probably be better to do so by statute, with prospective effect, rather than by judicial decision with its necessarily retrospective effect. If statutory effect in relation to tenancies is given to the legislative proposals in this respect set out in the Law Reform Commission’s Working Paper No. 1 (The Law Relating to the Liability of Builders, Vendors and Lessors for the Quality and Fitness of
Premises), the decision of this Court on the point is not likely to be called for.
In all the circumstances, therefore, I find it appropriate to rule on the plaintiff’s claim in contract by holding that he is entitled to rely on a breach of an implied condition as to habitability arising from the fact that the flat was provided under the Act of 1966.
Negligence
Just as the question of the liability of the defendants in contract may be decided on the basis that the flat was provided under the Act of 1966, so also the question of liability in negligence lends itself to resolution on the same footing. It would be beyond the true scope of the essential circumstances of this case to decide whether there would be liability in negligence if the flat had not been provided under the Act. That broader question will be given a legislative solution if the proposals in the Law Reform Commission’s Working Paper No. 1 are given effect by Parliament.
Following on Donoghue v. Stevenson 27 it has been established by a line of decisions (such as Dutton v. Bognor Regis U.D.C. 15 ; Anns v. Merton London Borough 16 and Batty v. Metropolitan Realisations Ltd. 4 ) that where a person, including a builder or a local authority, carelessly provides a dwelling in which there is a concealed defect which the occupier could not have discovered by inspection, the person who provided the dwelling may be liable in negligence for personal injury or economic loss suffered as a result of the defect. The precise conditions or limitations of that liability need not now be considered, for I have no doubt that the principle of liability evolved in those cases is applicable to the circumstances of this case.
Despite ample opportunity of vetting the design of the ventilation system, the defendants were wanting in due care and skill in passing and accepting it. They should have made the necessary calculation as to relative humidity, or ensured that it was made. If they had done so, they would have discovered that the ventilation system was likely to produce the excessive condensation which made this flat unfit for habitation. As the ventilation system in the flat amounted to a serious concealed defect which the plaintiff could not have been expected to discover, and as the defendants (in their capacity as a housing authority providing a dwelling under the Act) owed a duty to the plaintiff to see that the flat he was getting was fit for habitation, the defendants were negligent in failing to observe that duty. The plaintiff was entitled, apart from any contractual obligation, to rely on the defendants
to ensure that the flat would be habitable. The duty placed on the defendants by the Act of 1966 justified the plaintiff in so thinking. It is the defendants’ failure, vis-Ã -vis the plaintiff as tenant under the Act, to observe that duty that was the particular source of negligence.
It has been suggested in argument that liability in negligence should not be held to attach to the defendants because of the contractual link between them and the plaintiff. I do not think that the existence of a contract of tenancy, or of liability under that contract, excludes liability in negligence. Liability under both heads may exist simultaneously: this Court so held in Finlay v. Murtagh. 17 Where, as in the present case, there was a proximity of relationship creating a general duty on one side and a justifiable reliance by the other side on the observance of that duty, it is immaterial that the parties were bound together in contract.
I would dispose of the matters argued by holding that the plaintiff is entitled, both in contract and in negligence, to recover from the defendants the damages found by the Circuit Court judge.
Burke v Dublin Corporation
[1991 1 IR 341 Supreme Court
Finlay C.J.
The proceedings in this case consisted of claims brought by four plaintiffs for damages for breach of contract, negligence, breach of duty and breach of statutory duty, and for certain injunctions arising out of the provision and maintenance by the defendant as a housing authority for the city of Dublin, of heating units in four separate premises at Tallaght in the city of Dublin.
The claims of the four separate plaintiffs are closely interrelated, though by no means identical, and no objection was taken at any stage to the trial of the proceedings in a single action.
The matter was tried before Blayney J. in the High Court sitting without a jury and having delivered a reserved judgment on the 13th July, 1989, (see: [1990] 1 I.R. 18) he made the following orders in each of the four separate claims.
1. He dismissed the claim of the first plaintiff on the merits.
2. He awarded damages in the sum of £21,290 in favour of the second plaintiff.
3. He awarded damages in the sum of £41,000 in respect of the third plaintiff.
4. He dismissed the claim of the fourth plaintiff who did not appear or tender any evidence to prosecute her claim.
The defendant appealed against both the findings of liability and the assessment of damages in respect of the second and third plaintiffs.
The first plaintiff appealed against the dismiss of his claim and the second and third plaintiffs appealed against the measure of damages awarded on the basis that they were inadequate. The fourth plaintiff did not prosecute any appeal.
The Court decided to hear and determine first the defendant’s appeal against liability in respect of the second and third plaintiffs and the first plaintiff’s appeal against the dismiss of his claim on the issue of liability, and to deal with any questions of damages at a later date.
I will deal with these appeals in the order in which they were submitted to the Court.
Claim of the third plaintiff
This plaintiff and her husband became tenants of one of the houses provided by the defendant pursuant to the Housing Act, 1966, in February, 1982. The complaint of the plaintiff in these proceedings was to the effect that the heating system in the house, which in the years 1978/1979 had been converted by the defendant from an oil-fired to a solid fuel-fired heating system, (called”conserva”) was seriously defective, rendered the house unfit for human habitation and had had the particular consequence, as far as this plaintiff is concerned, of having brought on in her a condition of asthma and of having damaged her furniture, fittings and decoration. No issue arose with regard to the right of this plaintiff to claim in respect of these latter matters.
The claim of all the plaintiffs with regard to the heating system is accurately and economically summarised by the learned trial judge in his judgment in the following terms at p. 22:
“1. The conservas are unsatisfactory and unsafe. When they are being lit the house fills with smoke, and smuts are emitted. They cannot be regulated and as a result reach a very high temperature, and large parts of the heater become cherry red in colour.
2. The defendants were negligent in choosing the conserva to replace the oil fired units. They failed to test it adequately before deciding to order it.
3. The lettings to the plaintiffs contained an implied warranty that the houses would be reasonably fit for human habitation. The defects in the conserva were such that they rendered the houses unfit.
4. It was also submitted that the defendant had been negligent in not inspecting the houses before making new lettings and in not giving adequate instructions on how to operate the conserva.”
Having received the evidence given by and on behalf of the third plaintiff with regard to the operation of the conserva heating system and its effect upon both her health and the property in the house, the learned trial judge shortly summarised his findings with regard to that evidence and with regard to the evidence adduced on behalf of the defendant that such difficulties as might exist were caused by the plaintiff’s own negligent or inefficient management of the system in the following paragraph at p. 25:
“While I consider that there was some exaggeration in this plaintiff’s evidence – in particular in regard to the frequency with which the firebricks were replaced as this is contradicted by the defendant’s records – I am satisfied that she was in the main a truthful witness and I find as a fact that what she referred to as ‘blow backs’ occurred on an average about once a week and that the effect was that dust, fumes and smuts were emitted from the conserva. I also find on the evidence of Dr. Fitzgerald that this was the cause of her developing asthma. I am satisfied also that her carpets, furnishings and furniture were stained by the smuts and that because of this she had to redecorate more often than would otherwise have been the case.”
I am satisfied that these findings of fact were clearly supported by the evidence adduced before the learned trial judge and that, in the context of the trial and of his judgment, must be construed as a rejection by him of the assertion made on behalf of the defendant that the problems which had arisen with regard to this heating system had been caused by the plaintiff’s own negligence or inefficiency.
The learned trial judge held that the decision of this Court in Siney v. Corporation of Dublin [1980] I.R. 400 that the letting of one of a number of newly built flats provided by the Corporation under the provisions of the Housing Act, 1966, contained an implied warranty that the flat was fit for human habitation, applied to the letting of a house in the same way as it applied to the letting of a flat, and it also applied to the letting of a house even if it was not a new one. In my view, that decision is correct and was an inevitable consequence of the reasoning contained in the judgment, in particular, of O’Higgins C.J. in the Siney’s case.
The next question which, therefore, arises is as to whether on the facts as found by the learned trial judge there was a breach of the implied warranty arising in law that the premises let to the third plaintiff were fit for human habitation. The defendant in the court below and in this Court submitted that, by virtue of the provisions of s. 66, sub-s. 2 of the Housing Act, 1966, and of the second schedule to that Act the evidence in support of Mrs. Hickey’s claim could not constitute proof of a breach of an implied warranty of fitness for human habitation because it did not come precisely within any of the twelve matters contained in the second schedule.
Section 66, sub-s. 2 of the Act of 1966 reads as follows:
“The housing authority in considering whether a house is unfit for human habitation shall have regard to the extent (if any) to which the house is deficient as respects each of the matters set out in the Second Schedule to this Act.”
The twelve matters contained in the second schedule are as follows:
“1. Stability;
2. Resistance to spread of fire;
3. Safety of staircases . . .;
4. Resistance to moisture;
5. Resistance to transmission of heat;
6. Resistance to transmission of sound;
7. Resistance to infestation;
8. Water supply, sanitary arrangements and drainage;
9. Air space and ventilation;
10. Natural and artificial lighting;
11. Facilities for preparing, storing and cooking food;
12. The extent to which the house does not comply [with certain standards or requirements contained in bye-laws which are immaterial to this claim.]”
This contention on behalf of the defendant was rejected, in my view correctly, in the court below on the basis that it placed too narrow a construction on s. 66, sub-s. 2, seeking to construe it as preventing a housing authority from looking at any matter other than those contained in the schedule. Secondly, it was rejected upon the basis that what was relevant to this claim was not the opinion of the housing authority but the absolute question as to whether the house was fit for human habitation or not. With reference to this latter decision, with which I also agree, I find it impossible to believe that, with regard to the question of fitness for human habitation, a wholly inefficient and unhealthy system of heating could be irrelevant, having regard to the nature of the matters contained in the second schedule which are specifically deemed to be relevant.
The duty of a housing authority under the Act of 1966, as is pointed out in Siney v. Corporation of Dublin [1980] I.R. 400, is to provide suitable and fit accommodation, either for those who have got no accommodation or for those who are living in sub-standard or inadequate accommodation and who have not got the capacity out of their own resources to provide fit and proper accommodation for themselves.
I am quite satisfied that such a statutory duty must necessarily involve the provision of accommodation capable of being healthily, safely and properly heated and that such a fundamental series of faults in a heating system as have been found as a matter of fact by the trial judge in this case, must lead to the conclusion that the defendant was in breach of the implied warranty of fitness for human habitation.
I would, therefore, dismiss the appeal of the defendant on the issue of liability in regard to the claim of the third plaintiff.
Claim of the second plaintiff
This plaintiff became tenant of a house in Tallaght provided by the defendant pursuant to the Act of 1966 in 1970. She was the first tenant of the house. In April, 1978, she applied to buy her house from the defendant and the house was vested in her pursuant to the provisions of the Act of 1966 by a transfer order made pursuant to s. 90 of that Act in June, 1980.
At the stage when this plaintiff had become a tenant of her house the house had been heated by an oil burning unit in a system similar to the one dealt with in the case of the third plaintiff’s house. This hah been altered by the defendant in December, 1978, with the agreement of the second plaintiff to the conserva type heater. The alteration was, as was the alteration in the case of the third plaintiff, due to a rise in the price of oil at that time, which made it impossible for persons who were the occupiers of these houses to maintain reasonable heating, having regard to the cost of an oil supply.
The learned trial judge found as a fact, on evidence which supported that finding, that this plaintiff suffered from a condition of bronchitis and bronchiolitis which were caused by emissions of smoke and fumes from the conserva heater. Having so done, he identified, in my view, correctly, the position with regard. to liability in this case, having regard to the decision already reached by him in his judgment in the case of the third plaintiff in the following paragraph at p. 28:
“The only clear distinction between this case and the third plaintiff’s is the nature of their interests in their respective houses and the manner in which each acquired her interest. The third plaintiff is a tenant under a letting agreement whereas the second plaintiff is the owner of the fee simple which she acquired under a transfer order. Is this distinction such as to deprive the second plaintiff of the right to damages to which I have held the third plaintiff is entitled or, to put it more concretely, is the same warranty to be implied in the sale to the second plaintiff as has to be implied in the letting to the third plaintiff? Not without considerable hesitation, the conclusion I have come to is that the same warranty is to be implied.”
I am satisfied that the learned trial judge was correct in reaching this decision. In his judgment in Siney v. Corporation of Dublin [1980] I.R. 400 O’Higgins C.J. at p. 407, having referred to the cases submitted indicating that no warranty of fitness for habitation could be implied into the letting of an unfurnished flat or dwelling, stated at p. 408 as follows:
“Those cases applied the rule of caveat emptor to all lettings of land, with or without a house thereon, in the same way as it was applied to contracts for the sale of land.”
It was that line of authority which the decision in Siney v. Corporation of Dublin [1980] I.R. 400 held to be superseded by the necessarily implied warranty of fitness arising from the provisions of the Housing Act, 1966. It would, therefore, in my view, be quite illogical to imply such a warranty into the case of a letting and to leave the rule of caveat emptor applicable to the case of a transfer effected under the same Act and apparently for the same purposes and with the same objective as the letting.
This latter consideration, of course, confines the principle which I am now discussing to the case of the sale of a house pursuant to the provisions of the Act of 1966 to a person who is by virtue of that Act entitled to be housed by the housing authority.
The Act of 1966 contains an apparent power on the part of the housing authority under certain circumstances to dispose by sale of houses originally provided under that Act to persons who are not in need of assisted housing accommodation. I express no view with regard to the principles that may apply to a sale in that instance, since the sale to the second plaintiff was to a person whohad originally been made a tenant of a house within the scope of the Act and who clearly required in the circumstances existing in 1980 a continuation of housing accommodation from the housing authority.
Quite apart from that general principle, the provisions of the Act of 1966 dealing with the power of a housing authority to transfer to a tenant by way of purchase by instalment, which is what occurred in this case, greatly strengthen the similarity between that transaction and the transaction of a letting.
The special conditions provided for in s. 89 of the Act of 1966 include an obligation upon the housing authority to ensure that the dwelling is only occupied by the purchaser or the purchaser’s successor in title or by a member of his family or the family of his successor in title. Such a special condition is consistent with the continued discharge by the housing authority of its obligation to house a particular category of persons. A special condition can furthermore consist of a prohibition of alienation otherwise than by devise or operation of law, again consistent with the maintainance of a stock of what might be described as social housing. This general objective is again reflected in the restriction contained at s. 90, sub-s. 1 on a transfer by sale of a house occupied by a tenant to the tenant himself.
The provisions of s. 106, sub-s. 1 of the Act of 1966, imposing on a housing authority before selling a dwelling under s. 90 to the tenant thereof an obligation to ensure that it is in good structural condition, are quite inconsistent with the application to such a transaction of the ordinary rule of caveat emptor and are quite consistent with the existence of the implied warranty of fitness for human habitation.
In the course of his judgment on this part of the claim, Blayney J. stated as follows at p. 30:
“It was submitted on behalf of the defendant that the second plaintiff was not entitled to succeed unless she could show that the house she bought was different from the house she agreed to buy because of some latent defect. In my opinion it is not necessary to consider whether this is correct or not because the principal defect of which the second plaintiff complains was in fact latent, namely, the noxiousness of the fumes and dust from the conserva that was affecting her health. This was something of which she was unaware though she was fully conversant with the objective manifestations of the defect.”
I am satisfied that this consideration of latent or patent defect is not material to the question of the breach of a statutorily implied warranty of fitness for habitation. The essence of that warranty is that it is an absolute guarantee by the housing authority of the condition of the house, and it is not dependent upon proof that some defect in the house was discoverable by them.
I would therefore affirm the finding of the learned trial judge with regard to the claim of the second plaintiff and would dismiss the defendant’s appeal against the finding of liability in that case also.
Claim of the first plaintiff.
Ian Burke is a son of Michael and Gloria Burke who on the 11th March, 1986, became tenants of a house at Tallaght in the city of Dublin provided by the defendant pursuant to the Act of 1966. This plaintiff was born on the 22nd July, 1986, and from that time forward, up to the date of the trial, he and his parents lived in that house. They continued as tenants of it over the whole of that period. Having heard the evidence of Mrs. Burke and the evidence from a number of medical witnesses, the learned trial judge made the following finding of fact at p. 31:
“I accept the evidence of Mrs. Burke that this conserva is very smoky and I accept in full the evidence of the two doctors. I find that the infant plaintiff is suffering from asthma; that his asthma was not caused by smoke or fumes from the conserva but is aggravated by them. On these findings, is he entitled to damages?”
In the course of the judgment the learned trial judge records that it was conceded on behalf of this plaintiff that he was not a party to the tenancy agreement and that he could not rely on the implied warranty of reasonable fitness for human habitation. Counsel for the first plaintiff states that this was in error and that a contention was made that he was a party to the tenancy agreement in the sense that it was made for his benefit.
In this regard counsel not only sought to argue that point which apparently had been submitted, according to the recollection of counsel, to some extent in the court below on the basis of the possibility of inferring from the nature of the contract that it was made for the benefit of the first plaintiff as well as for the benefit of his parents, but permission was also sought to argue the point which had certainty not been raised in the court below that by virtue of the provisions of the Married Women’s Status Act, 1957, it was possible to construe an interest of this plaintiff in the contract.
Whilst ordinarily this court should not entertain an argument on a point of law that had not been raised and determined in the High Court, in the particular circumstances of this case counsel was permitted to develop the argument under the provisions of the Married Women’s Status Act, 1957, because counsel for the defendant did not object and because they were anxious, since this was possibly a test case, to have the question of law determined.
I have come to the conclusion that the argument of an entitlement pursuant to the provisions of the Act of 1957 is unsustainable and I have also reached the conclusion that the alternative submission put forward, an entitlement pursuant to the contract on more general principles of benefit, must also fail.
The statutory provision relied upon is s. 8, sub-s. 1 of the Act of 1957, which reads:
“Where a contract (other than a contract to which section 7 applies) is expressed to be for the benefit of, or by its express terms purports to confer a benefit upon, a third person being the wife, husband or child of one of the contracting parties, it shall be enforceable by the third person in his or her own name as if he or she were a party to it.”
Section 7, mentioned in s. 8, sub-s. 1, deals with policies of life assurance or endowment and is irrelevant to the questions raised in this case.
Briefly, the submission made in reliance upon this section was that by reason of the fact that the rent payable on foot of the contract of tenancy into which the first plaintiff’s parents entered before he was born was a differential rent which would from time to time be calculated by the defendant on the basis of regulations and conditions which included consideration or the number of children dependent on the tenant or tenants at any given time, that it could be said that the contract was expressed to be for the benefit of, or by its express terms, purported to confer a benefit upon the first plaintiff, born after the letting was made. In my view, such a submission would place upon s. 8, sub-s. 1 of the Act of 1957, which is clearly and carefully restricted to contracts which are expressed to be for, or whose express terms confer benefits upon third persons, a much wider implied effect than the terms of the section would warrant. In the terms of the written letting agreement there is nothing which confines it to a case in which a family has children or which deals with any particular category or child or children in regard to the rights vested in the occupiers of the house by the letting agreement. In these circumstances, I would reject the argument pursuant to the Act of 1957.
With regard to the broader submission on the alternative ground, particular reliance was placed on the decision of the Court of Appeal in England in the case of Jackson v. Horizon Holidays Ltd. [1975] 1 W.L.R. 1468. In that case it was held that a man who entered into a contract for the provision of a holiday for himself, his wife and two children, making specific requirements as to what was to be contracted for in relation not only to himself but also to his wife and children, was entitled to sue upon breach of that contract, for damages in respect of his own discomfort, vexation and disappointment and the diminution of the value of the holiday, but also, although he was not held to be a trustee, in respect of the same damages suffered by his wife and two children. It seems to me, first, that the facts of that case and above all else the fact that the other contracting party was expressly aware of the persons for whose benefit the contract was being made and whose position was at risk if the contract was broken, make it entirely distinguishable from the present contract of tenancy entered into at a time when this plaintiff had not been born. I am also impressed by the submission made on behalf of the defendant in this case that the decision of the Court of Appeal in Jackson v. Horizon Holidays Ltd. has already been the subject matter of persuasive adverse comment in a judgment of Lord Wilberforce in Woodar Investment v. Wimpey Construction [1980] 1 W.L.R. 277 at p. 283 suggesting that it should be confined in effect to a decision on the measure of damages or possibly as an example of a type of contract, examples of which are persons contracting for family holidays, ordering meals in restaurants and hiring a taxi for a group, calling for special treatment.
It is attractive to view as a disturbing disparity and unnecessary discrimination a significant difference between the parties entering into a tenancy agreement of a house provided by a housing authority and other members of the family enjoying the same de facto rights and privileges who are not parties to that agreement. An argument based on this wider problem of equality before the law was not made in this case and I express no view about it.
I would therefore conclude, as did the learned trial judge, though apparently based on his belief that a concession to that effect had been made, that the issue of liability in the case of the first plaintiff depends upon his successfully establishing negligence on the part of the defendant.
The learned trial judge rejected this claim for negligence in the following passage contained in his judgment at p. 32:
“I am not satisfied that negligence has been established. I start with the classic statement of the law in Lord Atkin’s judgment in Donoghue v. Stephenson [1932] A.C. 562, at 580:
‘You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law is my neighbour? The answer seems to be – persons who are so closely and directly affected by my act I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question.’
Could the defendant reasonably have foreseen that its choice of the conserva would be likely to injure any of the occupants of its houses in Tallaght? In my opinion there is no evidence that it could reasonably have foreseen this. It was not suggested there was anything in the report of the Institute for Industrial Research and Standards or in the demonstration of the conserva in Cork, or in the pilot period during which two conservas were installed in houses in Tallaght which would have led it to foresee the possibility of injury. But since it could not reasonably have foreseen any injury it had no duty to take care to avoid it, and in the absence of such a duty there could be no breach of duty and so no negligence.”
I am satisfied that the findings of fact included in this portion of the judgment on which the decision in law is based are supported by the evidence before the learned trial judge and that it cannot be disturbed on appeal to this Court. This leads, however, to a single conclusion which is that this plaintiff has failed to establish negligence by the defendant in the original installation of the conserva heater. In para. 10, clause (i) of the statement of claim in this case, the following claim is made:
“The defendant has wrongfully and in breach of an express or implied term of the plaintiffs’ contract of tenancy failed, neglected and refused to provide an alternative form of heating for the plaintiffs.”
The determination of the issue raised by this plea necessarily involves, in my view, a consideration of whether the principles applicable as a result of the decision of this Court in Siney v. Corporation of Dublin [1980] I.R. 400, in so far as they deal with the question of negligence as distinct from an implied warranty, apply to a continuing duty on the part of the housing authority to keep premises fit for human habitation. Siney v. Corporation of Dublin came before this Court as a case stated pursuant to the provisions of s. 16 of the Courts of Justice Act, 1947, by His Honour Judge G. A. Clarke of the Circuit Court seeking the opinion of the Supreme Court on certain questions of law which arose on the facts as he found them. The facts as found by the learned Circuit Court judge are set out in the judgment of O’Higgins C.J., and at p. 406 he recites the material ones on the issue now under consideration as follows:
“On the evidence he heard, the learned Circuit Court judge found the cause of the problem to be insufficient ventilation. He found this defect to be such that, despite a reasonable and proper use of the heating and ventilation systems by the plaintiff and his family, dampness and humidity in the flat could not be overcome. This defect in the ventilation system could have been discovered prior to the letting to the plaintiff if a relative humidity test had been carried out.”
Amongst the questions of law stated by the learned Circuit Court judge was one as to whether the facts as found constituted negligence on the part of the defendant, their servants or agents. Ruling that negligence had been established in that case, O’Higgins C.J. at p. 414 stated as follows:
“Before accepting the completed flat, which was intended for allotment or letting to a family such as the plaintiffs, the defendants carried out an inspection. Obviously, that inspection should have been carried out to ensure that what had been built or provided accorded with the statutory requirements as to fitness for human habitation. Had the inspection by the defendants been so carried out, it would have disclosed that the ventilation system in this particular flat was defective and inadequate and that the defect was likely to lead to excessive humidity and the kind of conditions of which the plaintiff and his family subsequently complained . . . The inspection should have been carried out on the basis that the flat was to be handed over for occupation as a dwelling to a family entitled to expect that it would be one which was fit for human habitation. Because the inspection was defective, the flat was handed over in a condition in which it was not so fit. The result was that damage and injury was caused to the incoming family. In my view, on the facts found by the Circuit Court judge the defendants ought to be held liable in negligence.”
Henchy J. in the only other judgment delivered in Siney v. Corporation of Dublin [1980] I.R. 400 came to the same conclusion, holding that the defendant owed a duty to the plaintiff to see the flat he was getting was fit for habitation and that it was negligent in failing to observe that duty.
The question obviously arises in this case as to whether in the case of a dwelling having been provided for a tenant under the Act of 1966 without negligence, which is in fact unfit for human habitation, there is a continuing obligation on the housing authority if the fact of unfitness is established to it or it ought to have discovered it, to render it fit.
In my view, there is. The judgments in Siney v. Corporation of Dublin [1980] I.R. 400 are entirely dependent on the broad scope of the objectives identified by and the obligations imposed by the Housing Act, 1966, in regard to unfit or uninhabitable housing accommodation. The housing authorities are, under the broad terms of that Act, obliged to eradicate such housing in their areas and to substitute for it habitable housing. I am satisfied that that is a duty they owe to the inhabitants of a house who are lawfully in occupation under a letting agreement from them. It is not a single or once-off duty imposed upon the authority at the commencement of a letting, but is one which, in my view, must as a matter of law be taken to continue during the course of the letting.
In the instant case, this question of a continuing obligation and the issue as to whether there had been any breach of it on the part of the defendant, does not appear to have been dealt with in the judgment of the learned trial judge.
Mrs. Burke in her evidence gave significant detailed evidence of numerous complaints on her part to officials of the defendant, informing them that the heater was overheating and smoking and in particular in one portion of her evidence, gave evidence of a specific complaint arising from the admission of the first plaintiff to hospital in 1987, suffering from conditions which she then ascribed to the condition of the heater and its smokiness.
If the learned trial judge accepted that these complaints were made in the manner in which Mrs. Burke deposed to them, I am satisfied that such a finding, coupled with the finding already made by him, to which I have referred, that the conserva was very smoky and that its smokiness affected the first plaintiff so as to aggravate his chest condition, as a matter of law would entitle him to damages. The controversy on the evidence contained in the transcript of the trial as to whether these complaints were made, the times at which they were made, and the manner in which they were made, exists and it is not possible, in my view, for this Court to determine that controversy.
With regard to this appeal, therefore, I would allow the appeal and, in accordance with the principles of law laid down in this judgment, would direct a re-trial by the learned trial judge of the issue as to whether these complaints were made or not and, if as a result of that re-trial he concludes that they were made and that in accordance with those principles the defendant was negligent, an assessment of damages incurred by this plaintiff.
McCarthy J.
In respect of the claims of the second and third plaintiffs, I wholly agree with the judgment of the Chief Justice.
Claim of the first plaintiff
In contract
It appears to be an accepted principle of the common law that it is only the parties to the contract who themselves obtain rights and incur reciprocal obligations. (See Price v. Easton (1833) 4 B. & Ad. 433). The doctrine of privity means, and means only, that a person cannot acquire rights, or be subjected to liabilities, arising under a contract to which he is not a party. (See Tweddle v. Atkinson (1861) 1 B. & S. 393). This principle of the common law is not challenged. The written submission of the plaintiffs states “Should it be necessary, the plaintiffs may wish to argue that the strict common law privity rules are (as a matter of modern Irish law) inapplicable to family contracts of this kind.”This part of the submission was not pursued in argument on the hearing of this appeal.
I confine my views to echoing the observations of the Chief Justice in his judgment just read where he adverts to “An argument based on this wider problem of equality before the law . . .”.
(a) Married Womens Status Act, 1957.
The contract, contained in a document of the 11th March, 1986, signed by Michael and Gloria Burke, the first plaintiff’s parents, is not expressed to be for the benefit of any third person, nor does it by its express terms purport to confer a benefit upon any third person. The section, accordingly, does not apply.
(b) Contract for his benefit.
Here the claim was based upon the family holiday argument. Jackson v. Horizon Holidays Ltd. [1975] 1 W.L.R. 1468 was a case in which the graphic language of the judgments of the Court of Appeal in England emphasises its being part of the “crying shame” jurisprudence. I would think s. 8 of the Act of 1957 would give a ready remedy to the person not a party to the holiday contract, enabling him to sue in his own name. Mr. Jackson, who was the consumer party, sued in his own name; the holiday firm admitted liability; the appeal was against the amount of the damages, not, expressly, on the right to sue as such. This is clear from the judgment of James, L.J.. Though the action was brought by the father in his own name; the damages were measured in part by the discomfort of the children. Here, the child sues in his own name although by his mother who is one of the joint tenants. In Woodar Investment v. Wimpey Construction [1980] 1 W.L.R. 277, the Court of Appeal in England had followed the decision in the Jackson case. In the House of Lords, Lord Wilberforce in referring to theJackson case said at p. 283:
“It may be supported either as a broad decision on the measure of damages (per James L.J.) or possibly as an example of a type of contract – examples of which are persons contracting for family holidays, ordering meals in restaurants for a party, hiring a taxi for a group – calling for special treatment. As I suggested in New Zealand Shipping Co. Ltd. v. A. M. Satterthwaite & Co. Ltd. [1975] A.C. 154, 167, there are many situations of daily life which do not fit neatly into conceptual analysis, but which require some flexibility in the law of contract. Jackson’s case may well be one.”
In his judgment, Blayney J. states that it was conceded that the first plaintiff not being party to the tenancy agreement could not rely on the implied warranty. In this Court, his counsel has stated that this was an error on the part of the trial judge in that it was contended that the tenancy agreement was made for his benefit.
As I have sought to explain, neither the statutory argument nor the holiday case supports a claim by the first plaintiff himself. It has not been contended that one may be permitted to obtain the benefits (the warranty) of the contract whilst not being liable for its obligations – the payment of rent, the proper maintenance of fences of the gardens, keeping the dwelling in a clean and proper state, making good any damage resulting from the deposit of refuse, which are some of the express responsibilities of the tenant. The relevant section of the Housing Act, 1966, extends to all the community in need of housing, including the children of the tenants of housing authorities. There is no limitation related to date of birth. Such right of action of the named tenant or tenants may derive from the combined effect of the contract of tenancy and the operation of the Act of 1966. Such a contention may enter the equation if and when this Court has to consider an argument such as that to which the Chief Justice refers to as “an argument based on this wider problem of equality before the law . . .”
(c) Negligence.
I agree with the judgment of the Chief Justice on this issue.
O’Flaherty J.
I concur with the judgment of the Chief Justice.
Leahy v. Rawson
[2004] 3 IR 1
O’Sullivan J. 4
H.C.
Sullivan J.
14th January, 2003
On the 5th January, 1996, the plaintiff with her then partner, a brother of the first defendant and her son Gerard aged fifteen returned to Ireland having spent some 21 years in London. She bought a plot of land with a cottage on it for £24,000 of which
£22,000 was advanced by the fourth defendant. The sale was agreed in February, but before completion she had been to the planning office to ensure that she would be able to build an extension. The cottage is situated at Ballykelly, Cadamstown, Birr, County Offaly.
Plans were prepared for the extension by an official in the planning department but were submitted in the name of the first defendant.
In or about August, 1996, the plaintiff was in a position to start the extension works: she had planning permission for the required alteration, she had the second and third defendants as engineers (a major controversy exists as to whether they were supervising engineers or merely engaged to certify stage payments) and she had a builder, the first defendant.
There was a certain informality about the works on site. In the first place, the plaintiff herself was very busy. A further element of informality was that the first defendant would turn up on site perhaps for three days in any one week. At the end of the week the plaintiff or her partner would pay all the money due for the work done during that week to the first defendant who would distribute it in equal shares amongst his fellow workers. A further element of informality was that, in fact, not all of the works on the invoice were done by the first defendant in that when he first came on site the trenching for the foundations of the new extension had already been marked out and dug and the concrete was being poured into them. Equally, at the end of the first defendant’s time on the site the evidence is that the work on the extension was not complete. The first defendant reached an agreement with the plaintiff’s partner (but not directly with the plaintiff) that the latter would finish the work and subsequent events intervened so that this did not happen. There is also an allegation, to which I will return later, that much of the work was defective. At this point I am summarising the evidence as to how the work was carried out because the plaintiff has alleged that the first defendant was the “builder” in the sense of building contractor for the job whilst the first defendant has argued that not only was he not the”builder” in this sense but that the informality and vagueness of the agreement was such that it was merely a domestic arrangement and not a formal contract at all.
The works commenced in early or mid-August, 1996.
The plaintiff says that her father, John Leahy, who had done building and driving work, became concerned about the standard of the building works. He advised her to get her engineers on site to have it checked. The plaintiff says she did this. There is major controversy between her and the second defendant as to what she did or did not say to him. He accepts only that she asked him to go out and check one specific thing, namely whether the new building was being correctly tied in to the old building. This he did at a stage, he says, when there were three or four courses of block work in place and this enabled him to check the ties on each of the walls and to assess that those involved knew what they were doing. He went out, checked the two walls, did nothing else and told the plaintiff that the tying in was being correctly done. She says that she asked the second defendant to check the block work, the plumpness of the walls and the tying in and made it clear that, notwithstanding that the builders were her partner’s brothers, she wanted a good job done. She says that the second defendant came back and reassured her, using colourful imagery, and that from that point she relied on him to her detriment against any other advisors.
I will return to this factual issue, which is one of two factual controversies between these two parties, the other being the terms of the plaintiff’s engagement of the second defendant, at a later point in this judgment.
Building progressed through the autumn and winter of 1996. Three stage payment certificates were issued by the second defendant, namely a wall plate level certificate issued apparently in early September (the certificates are not dated) but after the plaintiff’s request to have the standard of work checked. A second certificate to roof completion level which issued apparently towards the end of October, 1996 and involved a payment of £10,000 (the first certificate involved £20,000) and a final certificate dated the 5th March, 1997, which appears to imply certified cost expenditure of £8,000.
The final certificate was issued by the second defendant even though he acknowledges that the work was unfinished. He says he issued it in good faith on the understanding that the work would be finished by the plaintiff’s partner in a short time. This certificate has been criticised in the sense that both an architect and an engineering draftsman, called by the plaintiff, say that they would not have issued a final certificate for the house in its state of incompleteness. The evidence is that the work should be 95% complete at final certificate stage and one builder estimated that the house was only 65% complete.
The plaintiff moved into the new extension in January, 1997 once the roof was on and the structure built. She resided there with her partner and her son until July of that year when the relationship broke down and her partner left.
The plaintiff was not satisfied with the standard of workmanship and with the fact that the house was not complete. She engaged an architectural and engineering technician, Frank Murray, to prepare a report and in July, 1997, he verbally reported to her that the house was poorly constructed and that the roof was unsafe. His written report is dated the 17th July. It says that a lot of the walls are off-square, off-line and out-of-plumb and the general block work of the extension was not set out properly. Plastering was of poor standard, some falling off, some ceilings were off-level, there was no permanent ventilation, the chimney was left without sand and cement filling around its flue, the level of the windows and side entrance door appeared to be at different levels, the general workmanship of the interior house was extremely bad, there was insufficient supporting timber in the roof and also the pitch was less than the minimum required by the tile manufacturer, one vertical support member in the roof was totally inadequate and it appeared to be propped off a ceiling joist and not a wall as it should have been. The roof tiles had insufficient overlap, there was inadequate chimney flashing and capping and the path around the house was too steep and incomplete. A lot of plaster would have to be stripped off to straighten the walls, some windows taken out and refitted, the chimney would have to be relined, capped and flashed and the roof would have to be removed, redesigned and refitted. There would have to be permanent ventilation put in and he concluded by saying “at present with the roof in such an unstable manner it would be unsafe for anyone to occupy this house”.
A second report was prepared by an architect engaged by the fourth defendant, dated the 27th August, 1997. His report endorsed many of the points made by Mr. Murray and in particular he says that the rear roof would need to be redesigned and would have to be removed.
The plaintiff’s solicitor said in evidence that the plaintiff was very distressed around this time. He advised her not to occupy the extension in light of Mr. Murray’s assessment that it was dangerous. She continued to do so but also tried to procure local authority housing and failed, tried to raise a loan from the credit union and failed, discovered that there was no suitable rented accommodation (the previous rented accommodation was not available and in any event it was grossly unsuitable), and failed to get a loan from a bank for the purpose of buying a mobile home to live in on the site.
At some point her brother suggested that the planning permission included a garage and that she might build out the garage and occupy it. The planning permission prohibited residential use of the garage structure but this has not proved to be a problem and, indeed, Mr. Hussey the planning officer indicated at the trial that the planning authority might authorise retention of it as a “granny flat”.
The plaintiff decided to have the garage built which was done by Brendan Mahon and who had in fact originally tendered £40,500 for the entire work of the extension.
At the point in her evidence when she was dealing with this period and the options available or not available to her and in response to suggestions that she should have followed up the implications of the criticism of the roof in the engineer’s reports with a view to identifying what remedial works were required and how much they would cost and how long they would take to do the plaintiff repeatedly said that she was acting on the advice of her solicitor and that she had put the matter into the hands of her solicitor. She also said that her solicitor advised her to build out the garage. The plaintiff’s solicitor said that she was in error in this but did acknowledge that when she told him she was going to do this – it was her decision – he thought it was an excellent idea. He said she had tried so many other ways to get out of her quandary without success, she needed to bond with her son and this was an excellent way of doing it.
Her solicitor gave his own personal undertaking as security for a loan which he thought was in the region of £8,000 to enable her to carry forward this work. He was surprised when he heard in evidence that something in the order of £30,000 had been spent on the “garage”.
The plaintiff got credit from suppliers where she could, help free of charge from her father and brothers, obtained further credit where she could and paid for the building of the garage bit by bit over the ensuing period. It was built by Brendan Mahon and the plaintiff occupied the garage in the spring of 1998.
Meanwhile, Brendan Purcell, the consulting engineer engaged on behalf of the plaintiff by the plaintiff’s solicitor had himself instructed a quantity surveyor who prepared a report in December, 1997 valuing the entire work “related to Mr. Rawson’s quotation” at a total cost including materials of £32,000. He valued the labour cost only at £14,690. The quantity surveyor Vincent Drum says that the first defendant’s quote of £9,200 was grossly inadequate but it seems to me that the difference is to a considerable extent explained by the two different bases (non-payment or payment of tax) involved in these estimates. Mr. Drum also reported that the cost of the complete works properly constructed (by which he means free of defects and including several substantial items over and above those producing the “total cost” estimate of £32,000) was £66,544 to include £7,359 for V.A.T. at 12.5%. In this report (dated the 14th January, 1998) Vincent Drum offered an initial reaction that the cheapest and most efficient manner of rectifying the problems would be to demolish the entire and rebuild completely at a cost in the order of £70,000 plus professional fees.
Brendan Purcell considered this report and on the 10th July, 1998, furnished a further report whereby he amended the quantity surveyor’s estimate of the remedial works required upwards from £19,645.36 (Vincent Drum’s estimate as of March, 1998) to £32,835.09. On the basis of this he furnished a report expressing the view that the minimum remedial works proposed “would not provide sufficient benefit to make the house habitable to any comfortable degree” – even at the upwardly revised cost of £32,835.09. Even after this expenditure he said the house would not meet a mortgage society’s surveyor’s examination; it would be extremely difficult to sell and his view was that “to take care and eliminate all of the foregoing” it would be necessary to demolish and start again. He said that the block work in the house was so bad it would defy all skills of a carpenter and of a plasterer to put matters right, there were doubts about the foundations and the damp proof course and he noted that the cost of demolishing and starting again would be £70,000 plus professional fees.
In evidence Mr. Drum said that at the time of the preparation of his report Mr. Purcell and himself were moving towards a view that it would be better to demolish and rebuild the extension rather than to repair it.
The plaintiff submitted that the first defendant was the “builder” for the entire project in the sense that he was in overall charge and had responsibility for it. I am not convinced that this was so. It was a”direct labour” arrangement as part of which the first defendant was responsible to the plaintiff for the works set out in his two invoices, subject to agreed variations: he was not, in my opinion, responsible to her for the proper completion of the overall project.
This defendant also submitted that, by paying him the requested £500 for “extras” in mid-March, 1997, the plaintiff accepted his work without complaint in an obviously defective and incomplete state and cannot now claim against him for these breaches of contract. In my opinion the plaintiff paid the first defendant at a time when – despite appearances – she was still relying on the assurances of the second defendant and, in all the circumstances such payment cannot operate as an implied acceptance by her of the quality or completion by the first defendant of his contractual obligations towards her.
It was suggested that this was nothing more than a purely domestic arrangement between the plaintiff and this defendant. Alternatively it is said that the arrangements were so vague that they could not amount to a formal contract.
The rationale behind the leading cases on this topic namely, Balfour v. Balfour [1919] 2 K.B. 571 and Courtney v. Courtney [1923] 2 I.R. 31, is that the law does not recognise natural love and affection as good consideration (see McDermott,Contract Law, (2001) at p. 161). The doctrine (comprising a presumption against an intention to create legally binding arrangements) appears to apply only to the closest family kinships such as parent and child and spouses. Where it applies there is only a presumption of fact which can be rebutted but the onus is on the claimant to rebut. In Law Society of Ireland v. O’Malley [1999] 1 I.R. 162 Barron J. indicated that he would be prepared to uphold an agreement between the plaintiff and his wife’s family.
In the present case the agreement was between the plaintiff and her partner’s brother. She certainly felt herself bound by it and has furnished a detailed note of the amounts of payments up to and including the £9,200 on the invoice. The invoice was presented to her by the first defendant who indeed presented a further invoice for extras when he felt that he was being asked to do more work than that comprised in his original invoice. In my opinion there was an intention to create legal arrangements, albeit that the implementation of the agreement was done on a somewhat casual basis and was subject to variation on a reasonable basis (as distinct from being unenforceably vague) and this was accepted by both the first defendant and the plaintiff.
In my view the first defendant was obliged under this agreement, subject to agreed reasonable variations, to provide the plaintiff with the work described in the two invoices tendered in evidence. One of the variations exonerated him from setting out and laying out the trenches. He was not exonerated in my view from defective block work, walls being off plumb (as distinct from off skew), defective plaster work, absence of any landscaping or incomplete or defective works. His counsel made the argument that the plaintiff was unable to point to any one block or wall which was done by this defendant as distinct from jointly with his brother. The evidence was that this work was done by the two of them working together. Whilst I accept that the first defendant was not the building contractor with overall responsibility for the entire project he cannot in my view evade responsibility for defective or incomplete delivery of the items contained in his invoices simply on the basis that he only ever shared in any part of the work.
This defendant must accept responsibility for these defects and the consequences which flowed from them. He was aware of the plaintiff’s circumstances, both family and financial, and it was entirely foreseeable that if she was not able to occupy the extension as her dwelling because of defects for which this defendant is responsible she would have to incur expenses in finding alternative accommodation which would mean that she would find it extremely difficult or impossible to lay out expenditure in addition to remedying these defects. These are matters which I will go into in some greater detail at a later point in this judgment.
The case was pleaded on the basis that the second and third defendants were in partnership and this was not denied. During the course of the hearing there was some argument which appeared to be on the basis that the plaintiff had to establish liability against the third defendant separately in his own right. This does not seem to me to be correct if, as is the case, the second and third defendants are in fact one entity comprising a partnership offering architectural and engineering services to the plaintiff.
I ruled at the end of the plaintiff’s case that there was no evidence to show that she engaged the second defendant to supervise the works. Her counsel at the conclusion of the entire hearing pointed to two valuation reports prepared by this defendant for the benefit of the fourth defendant in which he answered “yes” to the question was there a qualified supervising architect and gave his own name as such. This was done twice. The plaintiff’s counsel said that whilst he knew that this document existed (through discovery) he could not prove it. He could have – by way of interrogatories. It may be that if this evidence had been adduced on behalf of the plaintiff my ruling would have been different. Nonetheless, the ruling stands and the case was conducted on the basis of it. These two documents comprising this information which came on his own admission from the second defendant himself do have a bearing, in my view, in the context of my assessment of his evidence.
Insofar as the plaintiff’s claim against the second and third defendants rests in contract my ruling was and must remain that the contractual obligation of these defendants was to provide stage payment certificates in respect of the work. The purpose of these certificates, I was told, was to communicate to the fourth defendant that the money which they proposed to advance had already been spent on the building – as distinct from a holiday or some other extraneous outlay. The evidence was that such a certificate (a stage payment certificate) made no representation either to the fourth defendant or to the plaintiff in relation to the standard or quality of the work: it was simply a certification that the money had been spent on the building.
A further point was made that, at the time that each of the certificates was issued, the plaintiff had already spent her own money on the relevant works and therefore did not rely on these in order to incur this outlay. Even if they were incorrect, this argument goes, she suffered no loss as a result of this failure because she had already spent the money. There was evidence, however, that if such a certificate did not issue then the works would have had to be done again assuming that the reason was that they were defective. This is, of course, contradictory of the initial position that the certificates did
not relate to standard or quality of work. The only instance in which the second defendant said a certificate would be refused was if the works were not complete. This was in fact the case in relation to the final certificate but he went ahead nonetheless and gave the certificate, as he said in good faith, trusting that the works would be completed by the first defendant’s brother in a short time.
Insofar as the plaintiff’s claim against these defendants sounds in contract, I hold that it is only in relation to the lack of completion of the works (the evidence is that the final certificate should issue when the works were 95% complete and these works were only 65% complete) that the plaintiff has made out her claim.
The plaintiff has also made a claim in negligence.
It seems to me quite possible and not extraordinary that a person not particularly familiar with the ins and outs of building society requirements and the distinction between stage payment certificates and supervisory certificates would assume that once she mentioned that she required an engineer’s involvement on behalf of the fourth defendant who had told her that she needed a supervising engineer that they would understand that they were to supervise. She said she assumed that the second defendant had been engaged to supervise. She further expressed the view that if this had not been the case, contrary to what she thought, then why did the second defendant not explain to her when she asked him to call out and check the building (which he admits insofar as tying in is concerned) that she got his roles mixed up and that what she was requesting was the job of a supervising engineer, which he was not.
Further background to these clashes of evidence are the documents filled in by the second defendant for the benefit of the fourth defendant in which he acknowledges that there is a supervising architect and that it is indeed himself. This he did twice.
The second defendant says that in fact when engaging him the plaintiff did ask him to supervise and he explicitly said he would not. At that time his firm was not providing supervisory services at all.
In my view when the plaintiff telephoned the second defendant with her concerns about the defective workmanship of the block work she was under the impression that she was talking to her supervising engineer. I prefer her evidence in relation to this conversation to that of the second defendant and it is clear that he was aware that the works involved required a supervising engineer and he must have been aware that the fourth defendant was the recipient of a communication of his own that he indeed was that supervising engineer.
I have held that there was no evidence on the plaintiff’s case that he was engaged as such and if, further, he undertook (taking his own evidence at its face value) in these circumstances to check into the tying in of the new building with the old, this was against a background where he had incorrectly represented to the fourth defendant that he was the supervising engineer and, assuming even on his own evidence that he had explicitly told the plaintiff that he would not supervise then he acted inconsistently when he undertook to do one specific item of supervision. This was at a time when it must have been apparent to him that the plaintiff did not have a supervising engineer. His counsel suggests that the plaintiff knew all this and was aware not only that she had to have a supervising engineer to comply with the fourth defendant’s requirements but that she deliberately decided (in consonance with her overall penny-pinching attitude to outlay) not to pay the second defendant the scale fee involved for supervision but rather to accept his firm merely as instruments for extracting funds from the fourth defendant.
I reject this scenario for a number of reasons. First and foremost, I formed the clear impression that the plaintiff was a truthful witness and, whilst there were parts of her evidence which were clearly incorrect, I do not accept that the only explanation for such an easily demonstrable lie is in fact mendacity on the part of the plaintiff as distinct from some other explanation which is not apparent. My opinion is nonetheless that her evidence was reliable particularly with regard to things which she could understand such as what she said to the second defendant by contrast with things which were new and unfamiliar to her, such as the ins and outs of certification and other paperwork connected with the building process.
Furthermore, the second defendant’s scenario imports to the plaintiff an awareness of distinctions between different kinds of engineering certificates which I do not believe she had at that time. Moreover, there is a certain element of self-contradiction or at least inherent tension in the second defendant’s evidence in so far as he insists that he quite assertively told the plaintiff that he would not supervise and then subsequently when asked to carry out an exercise in supervision he proceeded to do so without demur or explanation. Finally, the above scenario was not explicitly put to the plaintiff in cross-examination.
I hold that the plaintiff did communicate with the second defendant some weeks after the commencement of the block work but before the issuing by the second defendant of the first stage payment certificate and expressed concerns about the general workmanship on the site and told him that her father was concerned about it, asked him to check it, specifically mentioning the tying in, the block work and the out-of-plumpness of the walls (something which might be difficult to divine if the blocks were only three or four courses high) and asked him to be under no illusion but that she required a proper professional job done notwithstanding that the builders were her partner’s brothers. I also hold that the second defendant reassured her in the colourful terms given in evidence by the plaintiff and that as a consequence of this reassurance she relied on him to the exclusion of any others from that moment forward in drawing the inference that the construction work (notwithstanding what might appear to her or others) was up to a good standard and that it was in this context that she understood the issuing by the second defendant of the stage payment certificates.]
O’Sullivan J. continued:-
The law
Counsel has submitted that the relationship between the plaintiff and the second and third defendants is one of contract and contract only. He relies on a number of decisions but in particular for example thedictum of Lord Scarman in Tai Hing Ltd. v. Liu Chong Hing Bank [1986] 1 A.C. 80 at p. 107 as follows:-
“Their Lordships do not believe that there is anything to the advantage of the law’s development in searching for a liability in tort where the parties are in a contractual relationship. This is particularly so in a commercial relationship.”
I note in passing that one of the concerns of Scarman L.J. was a distinction arising in terms of limitation of actions between claims in contract and tort. Further reliance was placed on Pacific Associates v. Baxter [1990] 1 Q.B. 993 where it was held that in the absence of a voluntary assumption of responsibility by the defendants to the plaintiff the law would not impose on the defendants a duty of care to avoid economic loss accruing to the plaintiff.
Furthermore, for the imposition of such a duty of care there had to be three requirements, namely the forseeability of harm, the proximity of the relationship and further it must have been just and reasonable to impose a duty on the defendant. In this instance the contract terms entered into between the parties (and nothing else) were the governing criteria of the relationship between them.
The most recent and authoritative statement of the law in this country as it bears on this topic is that of Keane C.J. in Glencar Exploration plc. v. Mayo County Council (No. 2) [2002] 1 I.R. 84. At p. 135 Keane C.J. refers to the views of Lord Wilberforce in Anns v. Merton London Borough [1978] A.C. 728 at pp. 751 to 752 where he said:-
“¦ in order to establish that a duty of care arises in a particular situation, it is not necessary to bring the facts of that situation within those of previous situations in which a duty of care has been held to exist. Rather the question has to be approached in two stages. First one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the latter – in which case a prima facie duty of care arises. Secondly, if the first question is answered affirmatively, it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed or the damages to which a breach of it may give rise ¦”
Keane C.J. next alludes at p. 136 to criticisms and doubts voiced in relation to the foregoing culminating in the views expressed for example by Lord Bridge in Caparo plc. v. Dickman [1990] 2 A.C. 605 at pp. 617 to 618 when he said:-
“What emerges is that, in addition to the forseeability of damage, necessary ingredients in any situation giving rise to a duty of care are that there should exist between the party owing the duty and the party to whom it is owed a relationship characterised by the law as one of ‘proximity’ or ‘neighbourhood’ and that the situation should be one in which the court considers it fair, just and reasonable that the law should impose a duty of a given scope upon the one party for the benefit of the other.”
Keane C.J., referring in Glencar Exploration p.l.c. v. Mayo County Council (No. 2) [2002] 1 I.R. 84 to what he described as the more cautious
approach favoured in Caparo plc. v. Dickman (1990) 2 A.C. 605 (contrasting that approach with that of McCarthy J. in Ward v. McMaster [1988] I.R. 337) alluded back to the distinction made by Lord Atkin in his judgment in Donoghue v. Stevenson [1932] A.C. 562 when he gave the colourful example of the pusillanimous bystander watching a fire threatening the lives of people in the building and knowing that if he waits for the fire brigade to come and save them it may be too late. The law does not impose upon such a bystander a duty of care simply because he fails to act in a way that a more courageous citizen might do. Keane C.J. observes at p. 139:-
“It is precisely that distinction drawn by Lord Atkin between the requirements of morality and altruism on the one hand and the law of negligence on the other hand which is in grave danger of being eroded by the approach adopted in Anns v. Marton London Borough [1978] A.C. 728, as it has subsequently been interpreted by some. There is, in my view, no reason why courts determining whether a duty of care arises should consider themselves obliged to hold that it does in every case where injury or damage to property was reasonably foreseeable and the notoriously difficult and elusive test of ‘proximity’ and ‘neighbourhood’ can be said to have been met, unless very powerful public policy considerations dictate otherwise. It seems to me that no injustice will be done if they are required to take the further step of considering whether, in all the circumstances, it is just and reasonable that the law should impose a duty of a given scope on the defendant for the benefit of the plaintiff, as held by Costello J. at first instance in Ward v. McMaster [1985] I.R. 29, by Brennan J. in Sutherland Shire Council v. Heyman (1985) 157 C.L.R. 424 and by the House of Lords in Caparo plc. v. Dickman [1990] 2 A.C. 605.”
Brennan J. in Sutherland Shire Council v. Heyman (1985) 157 C.L.R. 424 had said:-
“[I]t is preferable in my view that the law should develop novel categories of negligence incrementally and by analogy with established categories, rather than by a massive extension of a prima facie duty of care restrained only by indefinable ‘considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed’.”
Applying these criteria, it seems to me that what the second defendant did at the plaintiff’s request when she voiced her concerns to him about the standard and quality of the block work on the site was to volunteer to do something outside the terms of the agreement between the plaintiff and himself. It was clearly foreseeable that if he failed to advise the plaintiff as to the standard of the workmanship having reassured her in the colourful terms, to which I have alluded above, that harm in the form of her being falsely reassured (and consequential loss) would follow. There was clearly, in my view, a sufficient degree of proximity between the plaintiff and the second defendant to attract to that relationship the application of the principles outlined above and it further seems to me in the circumstances that it is just and reasonable to impose on the second defendant a duty of care to the plaintiff so that the second defendant and the firm comprising the second and third defendants are liable to the plaintiff for any breach of their assumed responsibility to advise her in relation to any defects and lack of standard or in completion of the workmanship of the project.
Even therefore, on the basis of the self described more cautious approach, which is of course binding upon me, in my opinion the second defendant (and through him the third defendant as his partner) was under a duty of care to the plaintiff to advise her of the standard of work of the project and I further hold that he was in breach of that duty in failing so to advise the plaintiff. The consequences of such failure were entirely foreseeable and include the loss and damage to which I will refer hereafter.
No difference in scope of liability as between first and second/third defendants
In my view the scope of the liability of the first defendant is the same as that of the second and third defendants. The defects for which the first defendant is liable as already determined above would also necessitate remedial works as set out hereafter under the heading”plaintiff’s right to damages” and entitle the plaintiff to damages comprising the cost of repairs, devaluation of the house after repair, loss of profits from the bed-and-breakfast business and general and special damages as detailed below.
Liability of the fourth defendant
At the conclusion of the plaintiff’s case I ruled that no case had been made out against this defendant. There was no evidence of a mis-statement by Michael Halpin [who was the manager of the Birr office of the fourth defendant] (in recommending the second and third defendants as supervising engineers) let alone negligent mis-statement, and there was no fiduciary duty owed by this (fourth) defendant to the plaintiff.
The plaintiff’s duty to mitigate her loss
To summarise, the professional advice available to the plaintiff in 1998 it was as follows:-
(a) three engineers said the roof was dangerous;
(b) she decided to build out the garage for a dwelling for herself and her son;
(c) her solicitor advised her not to occupy the dangerous extension;
(d) a quantity surveyor assessed the remedial work to get her back into the extension (not to full standard but to get her “in out of the rain”) at £19,645.36;
(e) her consulting engineer increased this figure to £32,835.09 (with the same limitations).
The defendants criticised the decision of the plaintiff to build the garage and more particularly to abandon all notion of doing remedial works on the extension. They said that the latter in particular is a failure on her part to mitigate her loss in the context of her claim against them.
I approach this question in two parts. Firstly, was it reasonable for the plaintiff to opt to construct the garage as a dwelling?
She had applied to the local authority to be housed by them without success, tried to get a loan for a mobile home, found no rentable accommodation, her parents’ and sister’s accommodation was not satisfactory and she urgently needed a dwelling for herself and her son who was now left without a father figure. She was in a virtually impossible situation and even the option she elected to take was in breach of a condition of her planning permission. In my view, in her dire circumstances, she was reasonable in taking this option to build the garage as a dwelling.
The second question is was she reasonable having taken this option in abandoning all effort to carry out remedial works on the extension?
The plaintiff’s finances were in a state of disorder and she spent all her money (and credit) on the garage. Her evidence was that no builder would touch the extension. This was supported by her solicitor who said that no builder could be got to come within 40 miles of the place and, indeed, in the evidence of Brendan Mahon to the extent that he told her at the time that it would only be a patch up job and the walls would be crooked and off-line. A second builder, Richard Brady, gave evidence that he told the plaintiff at the time that the extension could be done up. Martin McManus, one of the builders the plaintiff consulted at the time, said in evidence that he would never say no to work and that he would do it if Mr. Cantrell (an architect) would sign off on the work. Mr. Purcell said (and reported at the time) that the builders he consulted (Brendan Mahon and a Mr. Murphy)
were not prepared to do the remedial work. At the trial Mr. Wyer, a builder called by the second and third defendants, had no hesitation in saying that he would have done the work and he gave a price of £26,004.38 at current values and £18,000 or £19,000 at 1997 prices. His estimate for the entire roof work was £7,880. If he had to take off the roof as distinct from repair it the estimate for the entire works was £31,000.
There was some confusion in the plaintiff’s case at this point. It is not clear whether her case is that she did not contemplate or implement remedial works because she was advised that it was not economic to do so (according to the line adopted by Mr. Purcell and Mr. Drum) or because she could not get a builder to do them (according to herself). Indeed as the case was opened it appeared that the structural defects were such that they required demolition of the extension. A further consideration is the impecuniosity of the plaintiff once she had spent money on doing the garage which, as I have held, was reasonable for her in all the circumstances.
It would be a mistake, I think, to look back with the benefit of hindsight and condemn the plaintiff for spending (ultimately) some £30,000 on the garage when the remedial costs for the extension would have come to approximately the same sum. In the first place the garage was built piecemeal, with the help (free) of relatives, credit (extended) of supplies wherever possible and further extended credit of the credit union; secondly, she had no clear advice at the time that the remedial works on the extension could be done at all or in an economic manner (in fact her advice from Brendan Purcell and Vincent Drum when it came was to the opposite effect), thirdly she was clearly managing on incremental and piecemeal assistance (an extended loan here, offers of free help there, supplies of credit elsewhere) on the basis of which only emergency and incremental decisions were possible, and fourthly and most importantly, her primary duty was as a parent to provide forthwith, if possible in autumn 1997, a home for herself and her son: she could not afford to wait (in an unsafe extension) for a report on costings which ultimately emerged in March, 1998. Indeed, when the report did come out it was unclear and inconclusive as witnessed by the several hours of examination, cross-examination and re-examination of its author, Brendan Purcell, at the hearing before me.
In my opinion, the plaintiff was in no position to expend monies on the repair and completion of the works on the extension because of her impecuniosity, the disorder in her finances, her reasonable decision to provide a home for herself and her son in the garage and the advice she was getting from her solicitor and engineer. Her financial circumstances as a result of the defects in the extension were entirely foreseeable to the first defendant who knew her circumstances as a family member and the second and third defendants, who were familiar with them through their role in processing her mortgage.
It is further my distinct impression that the complexity and overall pressure of her situation somewhat overwhelmed not only the plaintiff but her advisors. It is noteworthy in this context that Mr. Purcell engaged in activities proper to a quantity surveyor, Mr. Drum engaged in activities proper to an engineer, her solicitor has given his personal undertaking for part of her borrowing and indeed endorsed (correctly in my view) her decision to build the garage as a dwelling even if he did not advise it in the first place.
Demolition or nothing
A further pressurising and unusual feature of the case is the way in which it has been presented in court. The plaintiff’s counsel made it clear on the third or fourth day of the trial that she was seeking damages based on the cost of demolition and rebuilding and that she was not interested in damages based on the cost of remedial works. This is a matter to which I returned with her counsel on the day after this was stated and the position was repeated. As a result, the second and third defendants declined at least on one occasion to cross-examine the plaintiff’s witness (Mr. Purcell) in relation to his estimate of the remedial works required on the grounds that they were now irrelevant and that the plaintiff’s claim was for “all duck or no dinner”. If ever there was a chance that the parties might reach a negotiated settlement this stance put paid to it. At the conclusion of the trial the plaintiff’s counsel attempted to resile from this stand suggesting that it meant no more than that the plaintiff would lose her case if her witnesses were disbelieved and that the onus of making her case rested with her. The case was run on the basis described and in reliance on the clear intimation of the plaintiff’s counsel set out above: that intimation clearly meant something more than a trite andjejune recital of the obvious and was acted upon as something unusual by the defendants who tailored their handling of at least one witness accordingly. To accede to a revisiting of this tactic at the end of the case would not only be incorrect, but would, in my opinion, have amounted to a mistrial ripe to be set aside for the asking.
As I understand the law, if a plaintiff seeks damages measured at the cost of reinstatement she will be entitled to this if and only if such measurement of damages is reasonable. As Henchy J. said in Munnelly v. Calcon Ltd. [1978] I.R. 387 at p. 399:-
“In my view, the particular measure of damages allowed should be objectively chosen by the court as being that which is best calculated, in all the circumstances of the particular case, to put the plaintiff fairly
and reasonably in the position in which he was before the damage occurred, so far as a pecuniary award can do so.”
He went on to cite with approval an extract from McGregor onDamages (13th ed., 1972) which included:-
“The test which appears to be the appropriate one is the reasonableness of the plaintiff’s desire to reinstate the property; this will be judged in part by the advantages to him of reinstatement in relation to the extra cost to the defendant in having to pay damages for reinstatement rather than damages calculated by the diminution in the value of the land.”
Henchy J. then cited a passage from the judgment of May J. in C.R. Taylor Ltd. v. Hepworths Ltd . [1977] 1 W.L.R. 659 at p. 667, which included:-
“But secondly, the damages to be awarded are to be reasonable, reasonable that is as between the plaintiff on the one hand and the defendant on the other.”
There is no right to restiutio in integrum as of right.
In my view, as I have already said, the plaintiff was reasonable in deciding to build out the garage as a home for herself and her son in the late autumn and winter of 1997/1998.
In this regard it is clear that at all material times the plaintiff’s finances were stretched to or perhaps beyond bursting point. Her impecuniosity cannot be ignored. Indeed, I consider that this factor alone exonerates her from doing the repair work up to the time of trial. In deciding that she was reasonable in taking no further step towards repairing and completing the extension between 1998 and the hearing of this case, I bear in mind not only the plaintiff’s impecuniosity but also the state of the advice, already summarised, in relation to whether it would be worthwhile to carry out such repairs or simply plan to demolish and rebuild the extension. Her own evidence is that she left the matter in the hands of her solicitor. At no stage was she told by any of her advisors that she should take such steps (even if she could afford to do so) in order to mitigate her loss. Therefore her inaction must be regarded at least as subjectively reasonable.
The plaintiff’s right to demolition damages
However, this does not end the matter because the plaintiff’s case at trial was presented on the basis that she sought damages on one basis and one basis only, namely the cost of demolition of the extension and re-building it. She was not claiming – even in the alternative – the cost of repairs together with any other sum such as resulting diminution in value of the house even if the defects were put right. She is only entitled to this measure of damages if it is reasonable”¦ as between the plaintiff on the one hand and the defendant on the other” to use the phrase of May J. in C.R. Taylor Ltd. v. Hepworths Ltd. [1977] 1 W.L.R. 659, as cited by Henchy J. in Munnelly v. Calcon Ltd. [1978] I.R. 387. I take this to mean that the reasonableness of the way the plaintiff’s case presented in court must be tested by reference to an objective standard. In other words if her advice stands up then she is entitled to follow it: if it does not then she is not.
The advice came in three parts: she was advised or appeared to have been advised that the premises were unsafe and structurally unsound. Secondly, she was advised or appears to have been advised that it would be better to demolish and rebuild rather than repair on some prudent basis other than structural engineering, presumably, on economic grounds. (I use the words “appears to have been advised” because the evidence at the trial was vague and confused in regard to both these aspects.) In my opinion the advice, if such it was, that the extension would have to be demolished in its entirety onstructural grounds did not stand up – and indeed was not even proffered “in chief” – at the trial. Therefore, on objective grounds, the plaintiff was not entitled to claim demolition and rebuild damages on the basis of this advice. The advice that it would effectively be cheaper to demolish and rebuild than to repair is something that was not articulated to any great extent in the advice given to the plaintiff prior to the trial but was the subject of exhaustive analysis at the trial. I will return shortly to decide whether or not this aspect of the plaintiff’s advice entitles her to claim damages on the basis of demolition and rebuild.
The third element of advice relied upon by the plaintiff in deciding not to carry out repairs (and to claim demolition and rebuild damages) was to the effect that no builder would touch the job. This advice was supported by her solicitor and, with some qualification, by the two builder witnesses called on behalf of the plaintiff. Against this was the evidence of Mr. Wyer who had no difficulty in identifying the works required to be done and in saying he would do them now and would have done them in 1998. On the basis of the evidence at the trial I would have difficulty in holding – if this were the only element for consideration in this particular exercise – that the plaintiff was entitled to refrain from carrying out repairs exclusively upon the basis that no builder could be got to do them.
It seems to me, that in considering this aspect of the basis upon which the plaintiff’s case was advanced in court, I should make an assessment of the damages the plaintiff is entitled to be awarded in respect of the breaches and consequences thereof for which the defendants are liable on the one hand and the cost of demolishing and rebuilding the extension on the other. If the former approximates ora fortiori exceeds the latter, then the decision of the plaintiff to opt for an exclusively “demolish and rebuild” measure of damages is reasonable in the sense of objectively reasonable “as between the plaintiff on the one hand and the defendant on the other” because those latter costs are a smaller amount than the former. It further follows, in my view, that the plaintiff’s claim for damages is limited to such amount the case having been run on the basis that she was interested in one measure of damages only, namely the cost of demolition and rebuilding.
If the plaintiff had carried out repairs of the defects and incomplete parts of the extension (in respect of those items for which the defendants are responsible) then she would be entitled to claim against the defendants:-
(a) the cost of those repairs;
(b) the devaluation of the house so repaired (if any) by contrast with the value of the house had not those defects occurred in the first place;
(c) any loss of profits from operating a bed and breakfast business from the time when the work should have reasonably been complete to the time when it was reasonable for the plaintiff to have carried out such repairs – in the event, of course that is, that she is entitled to claim such losses in the first place;
(d) general damages (here I follow Geoghegan J. in Doran v. Delaney (No. 2) [1999] 1 I.R. 303 at p. 340 and Carroll J. in Roche v. Peilow [1985] I.R. 232);
(e) appropriate items of special damage such as, for example, the costs of heating and maintaining the extension until the time of (notional) repairs.
Before considering each of these heads of damages in turn I will deal with one further aspect of the plaintiff’s claim. She has, in her pleadings, claimed the costs of building the garage. I do not think she is entitled to this because, while she was reasonable in doing these works, she now has the benefit – such as it is – of this (at least formally) unauthorised structure and secondly, the fact that this building work was reasonable in the circumstances does not thereby entitle the plaintiff to increase the burden of damages against the defendants by claiming the expenses involved against them.
Plaintiff’s right to damages
(a) Cost of repairs
Mr. Drum costed “remedial work” in March, 1998 at £19,645.36. This figure was increased to £32,835 not by him but by Mr. Purcell who discussed this list of remedial works with two builders and”reviewed” the price upward. Mr. Purcell further commented that these minimum remedial works would not provide sufficient benefit to make the house habitable to any comfortable degree. Mr. Purcell’s evidence at trial was confused in relation to what precisely this phrase meant. It is clear that the mere repair of the defective works would not have finished the house but equally, in my opinion, the defendants cannot be held liable for the costs of providing plumbing or electrical installation or central heating to the house which was never to be provided by the first defendant and in respect of which – insofar as these items do exist – there is no complaint.
A further complicating factor, but one which I must nevertheless bear in mind, is the fact that the works which were provided by the plaintiff were provided “on the cheap” even allowing for the fact as already averted to that the first defendant’s invoice was on the basis that tax would not be paid on these earnings. The other side of the picture is the evidence of Liam Wyer who was called on behalf of the second and third defendants. He was furnished with a report prepared by the second and third defendants detailing every defect and element of incompleteness regardless of whether these were items for which these defendants could be held liable. His estimate as of August, 2001 is £26,004.38. His estimate excludes a number of items listed in the second and third defendants’ report for some of which these defendants would be obviously liable (damp stains due to a poor roof flashing detail) and others of which (plumbing installation, incomplete and incomplete utility fitments) they would not. Also excluded is landscaping which was included by the first defendant in his invoice to the plaintiff. Furthermore, Liam Wyer includes a figure of £7,880 for works done on the existing roof structure to make it sound (being works noted in a further report prepared by Colin Hassett, a consulting engineer who gave evidence at the trial).
There was considerable controversy during the case as to whether the roof should be replaced in toto or could be repaired. I was not convinced by the evidence supporting the replacement in toto alternative: it seemed to me that the evidence to the effect that the admitted absence of sufficient timberwork and supporting timber members and the inadequacy of the overlap of the existing tiling together with such further defects such as inadequate flashing did not sustain the more radical solution. On the other hand, I was persuaded by the evidence of Mr. Hassett and with his description of appropriate remedial works. It seems to me that Liam Wyer’s estimate should be the basis of assessing a just figure for repairs for which the defendants are liable in this case. To it I should add an amount for landscaping and I should also allow an increase to take account of price increases from August, 2001, since I have decided that it was reasonable for the plaintiff, on the basis of her impecuniosity, not to carry out repairs until the presentation of her case. In these circumstances the appropriate figure for repairs is £28,000.
(b) Devaluation of plaintiff’s house after repairs
With regard to the devaluation of the plaintiff’s house, a valuer, Liam Keegan said the house looked wrong because the extension roof looked too flat. He had never seen a house so badly built in respect of the off-plumpness of the walls. The condition in the planning permission relating to non-residential occupancy of the garage meant that the house would have very limited appeal on the market and its value in its current state was between £40,000 and £45,000 because it would appeal to a builder who might try to patch it up and sell it. If it had been built correctly its value would have been between £125,000 and £150,000. He would give the same valuation even if a new A-roof (as distinct from the present low-angle roof) were provided. He said he was unable to value the house on the assumption that all the defects were repaired and it was completed. It would still not be saleable from his point of view because, even if there was an engineer’s certificate available for the roof, he would advise a purchaser that they would be caught later on when it came to their turn to sell it.
Ivan Shephard, another valuer, said that the value of the house today without repairs was between £65,000 and £70,000; if completed its value would be between £95,000 and £100,000; and the value of the garage as a garage was “£15,000 and as a dwelling between £35,000 and £45,000.” Jim Cashen, a third valuer, gave evidence that the value of the house today completed was between £95,000 and £100,000; as it stands between £75,000 and £80,000 and these values were reduced by £20,000 when referred back to 1997. Jim Cashen provided comparisons to support his valuation of the property finished from its present condition and ready to live in at between £95,000 and £100,000. By reference to these and the evidence of the valuers it appears to me that there would be some reduction in the market value of the house in its present design but properly repaired (that is with continuing off-plumb walls, skewed rooms and low-pitched roof – that is below the pitch recommended by the manufacturers of the tiles used) by comparison with the market value of the house if these defects were not present. I do not accept, however, the evidence of Liam Keegan to the effect that, even with the repairs done, the house would be unsaleable. In my view the appropriate figure for devaluation on such a sale is in the order of £20,000.
(c) Loss of profits from a bed and breakfast business
I turn now to the question of whether or not the plaintiff is entitled to claim loss of profits from a bed and breakfast business.
The works on the cottage and the extension included the introduction of two en-suite bedrooms in the cottage. This necessitated the knocking of the existing walls in the cottage and the repositioning of them to facilitate these two bedrooms. I was not impressed with the evidence of [the plaintiff’s partner] to the effect that he regarded as a joke the notion that there was going to be a bed and breakfast business: I think he thought it was a joke that he would help his partner in running it, “hanging around looking after any ol’ ones” as he put it who might turn up for bed and breakfast. In my opinion there was a very serious intent on the part of the plaintiff to avail of the relatively young and growing bed and breakfast market in the vicinity of the newly established Kinnitty Castle Hotel. Evidence was advanced in relation to the profits made by bed and breakfast businesses in the vicinity. An estimate was made by an accountant, Seamus Kealey, that the plaintiff could have made £7,500 a year on the basis of 150 bed nights at £50 per night. This would have yielded a gross £7,500 and a net (after expenses) figure of £3,531 per annum. He offered as a comparison the bed and breakfast element in a joint bed and breakfast/bistro business operated by one Percy Glendenning in the village of Cadamstown which yielded a profit for the first ten months after expenses of £3,531. This evidence was criticised by the defendants on the basis that Percy Glendenning’s bed and breakfast business was part of an overall combined business with the bistro and was in the centre of the village whereas the plaintiff’s house was in excess of a mile away. I noted that Mr. Kealey, who was also an accountant for Mr. Glendenning, had his latter client’s permission to divulge certain information in relation to this business. Mr. Kealey hinted that perhaps not all his client’s bed and breakfast profits were accounted for in his evidence.
The plaintiff’s evidence and plans in this regard were also attacked on the basis that she would rely on her partner to help her and that he would have left before the business started and that his disappearance put paid to any prospect of commencing the business. I think this is unreal on two fronts: in the first place, I do not think her partner was ever going to help her (this is my view notwithstanding the plaintiff’s own evidence that she thought he would and his absence affected her plans) and secondly, because the evidence from Liam Kealey is that other bed and breakfast operators avail of the assistance of local neighbours at a relatively modest rate of something in the region of ‚¬10 an hour to look after guests when the owners of the business cannot be present. I have no doubt that a woman of the ability and energy of the plaintiff would have quickly come to an economically profitable arrangement for the bed and breakfast business had the house conversion and extension been properly carried through and on time.
It is clear that the plaintiff has the capacity to attract support and help from a wide variety of relatives and friends. She had already done market research (she is qualified in this area) on a preliminary basis with reference to Kinnity Castle and the evidence is that as many as three weddings a week can be held at Kinnity Castle, thereby generating a demand for local bed and breakfast accommodation. I think Mr. Kealey’s estimate of £50 a night is perhaps a bit optimistic. The probability in my opinion is that after tax and expenses the plaintiff would have been able to earn a profit of £3,000 per annum from this business. If things had been done correctly by the defendants the house should have been ready for the tourist season of 1997 and accordingly, the plaintiff is entitled to claim loss of profits from this business for each of the seven last tourist seasons between then and this trial, plus probable loss of the 2003 season due to reconstruction works, but making allowance of some reduction for the start-up season. The appropriate figure, in my view, under this heading is £20,000.
(d) General damages
A number of Irish cases have established that a plaintiff is entitled to general damages in circumstances such as the present. In Johnson v. Longleat Properties (Dublin) Ltd. [1976-1977] I.L.R.M. 93, McMahon J. established this principle when he acknowledged that it had (then) recently received recognition in Jarvis v. Swans Tours [1973] 1 Q.B. 233. He awarded general damages in that case for inconvenience and loss of enjoyment within the presumed intention of the parties. So did Carroll J. in Roche v. Peilow [1985] I.R. 232, where she awarded the plaintiffs a total of £22,000 for strain involved in uncertainty relating to the legal title of their house and consequent financial worries attributable to negligence of their solicitor in conveying the house. The £22,000 appears to have been referable to an eleven year period during which the carefully calculated finances of the plaintiffs went into disarray and they had financial worries and uncertainties about the house title resulting in great personal strain on both the plaintiffs and their marriage. They were entitled to what Carroll J. described as substantial damages for the foregoing troubles and also for social embarrassment, inability to have their own families to visit and miserable conditions at home. They were also awarded a sum of £8,000 into the future. In Doran v. Delaney (No. 2) [1999] 1 I.R. 303, Geoghegan J., explicitly having regard to the judgment of Carroll J. just referred to, awarded £10,000 general damages for anxiety and upset as a consequence of the negligence of the building contractor defendants. In Roche v. Peilow some of the plaintiff’s distress was due to the husband’s unemployment; also, there was evidence of depression which was reflected in the general damages both past and future.
In both Roche v. Peilow [1985] I.R. 232 and Doran v. Doran (No. 2) [1999] I.R. 303, there was evidence of health problems attributable to the negligence of the defendants in respect of which there was no evidence in the present case. It is true that the plaintiff in the present case has included a number of medical type expenses but no evidence was given in relation to them.
On the other hand her finances were clearly put under severe pressure and went into some disarray in a way which clearly relates to the breaches of the defendants. The plaintiff was attempting to provide a home for her son during six crucial years of his life when he was aged between nine and fifteen, she had to contend with living at the rear of a partially completed house and extension with no landscaping and a generally untidy outlook (I am bearing in mind that relatively little expenditure of effort and money could have produced an improvement in this regard) and perhaps worst of all she and her son had to live in excessively cramped conditions because they occupied a small two bedroomed”garage” structure (24 ft by 34 ft) accessed by way of the partly finished, badly built building referred to. There was evidence that this structure had acquired a reputation (which was the reason given for the builder’s unwillingness to come within 40 ft. of it – to use the expression of the plaintiff’s solicitor) and also that the plaintiff’s son was unable to have friends up to the house to visit him.
A review of the cases shows that general damages under this heading have traditionally been modest and indeed were so described by Lord Mustill in Ruxley Electronics v. Forsyth [1996] 1 A.C. 344. On the other hand, Carroll J. held the plaintiffs in Roche v. Peilow [1985] I.R. 232 entitled to substantial damages.
Towards the end of the trial I visited the house and inspected it in the presence of representatives of all parties. The plaintiff lives in the garage which is located at the back of the house from the road and looks out onto the incomplete and defective building which has been left in that state (with some minor additions by way of reveals and other limited work done by her father) since the break up of her partnership in July, 1997. It is a depressing and untidy sight and the existence of this incomplete and defective work is a major disamenity whereas what should have been provided included landscaping albeit, at the price charged, landscaping of a rudimentary kind. I do not think I am entitled to take into account in addition the fact that the presence of the house in its incomplete state continues as a harrowing and offensive reminder of the tension and stress brought on not only by the failure of the building works but also the collapse of the plaintiff’s relationship in July, 1997.
It seems to me that the plaintiff is entitled to a sum in to the amount of £5,000 for each of the six years commencing in mid-1997 to the commencement of the trial and allowing for a further period of disruption, likely to amount to a further year from now, while the extension is being demolished and re-built. She is therefore entitled to a sum in this regard of £30,000.
(e) Special damages
In addition, the plaintiff has claimed many items of special damage to which she would not be entitled. Rather than burden this already lengthy judgment with reasons for the denial of several of these claimed items, I will merely deal with those to which the plaintiff is entitled. I would comment that a number of claims are based on the plaintiff’s impecuniosity – claims for interest on overdrawn accounts and so on. It seems to me that insofar as these accounts reflect payments for the defective work the award of damages for putting it right satisfies the plaintiff’s claim. Insofar as they relate to disbursements on the garage, the plaintiff has thereby acquired an asset of some value and is not entitled to the costs of so doing. I do think the plaintiff is entitled to her costs of heating oil for the bungalow because even though she is also entitled to claim that the extension should be demolished, I think this was a reasonable expense. The amount involved is £645.00.
Conclusion
The total of these several heads of damages comes to £98,645.
At the commencement of the foregoing exercise I indicated that the principle to apply when assessing whether the plaintiff’s claim for reinstatement damages is reasonable is to ensure that those damages would not enrich the plaintiff excessively and unnecessarily and to ensure that it would not mulct the defendants unreasonably. It will be seen that the estimate of damages for demolition and rebuilding as of January, 2002, is £101,500. This figure includes V.A.T. but does not include professional fees. (The same applies to Mr. Wyer’s figure for repairs, and indeed Mr. Drum’s figure for repairs.)
Moreover this is something of an overestimate because it included total demolition including the foundation, whereas it is possible to demolish to slab level only, resulting in a saving of something in the order of £6,000. Against this the figure should be adjusted to take account of whatever inflation has occurred since January of this year to the present. In these circumstances I think the proper figure for comparison purposes is approximately £96,000.
It will be seen that the total amount of damages to which the plaintiff would be entitled on a repair only basis exceeds this. In these circumstances, applying the principle enunciated in Munnelly v. Calcon Ltd. [1978] I.R. 387 the plaintiff is entitled to present her claim on the basis of demolition and rebuild because if she had presented it on an alternative basis it would have cost the defendants more.
Accordingly, the plaintiff is entitled to a decree in the amount of the cost of demolishing (to slab level) and re-building the extension as claimed by her at the trial, being the euro equivalent of £96,000 (i.e., £121,894.85).
Gerald Colgan v Connolly Construction Company (Ireland) Ltd
No. 2008P
High Court
29 February 1980
[1980] I.L.R.M. 33
(McMahon J)
29 February 1980
McMAHON J
delivered his judgment on 29 February 1980 saying: This is an action brought by the owner and occupier of a dwellinghouse against a builder claiming damages for the financial loss which the plaintiff will incur in making good defects in the dwellinghouse alleged to be due to the negligent manner in which it was constructed by the builder. The plaintiff is not the first owner of the house and has no contractual relationship with the builder but he claims to be entitled to recover damages in tort on the principle of Donoghue v Stevenson.
The house, No. 54 Lucan Lodge Estate, Lucan, was built by the defendants in the year 1973 under a written contract with the first owner, Mr Eunan Murray. The site belonged to a development company named Whitewater Ltd and when the house was completed the defendants procured that company to grant a lease of it to Mr Murray for a term of 250 years. The lease was executed in December 1973 and the house was occupied by Mr Murray and his family from that time until it was sold to the plaintiff in 1976. The plaintiff and his family have occupied it since then. The house was not professionally surveyed before the plaintiff bought it but the plaintiff and his wife inspected it several times. The only defect they observed was a crack in the plaster on the lintel over a window in the main bedroom. It is admitted that the defects now complained of would not have been apparent on examination by a layman in 1976 and I am satisfied that all would have been discovered had the house been professional surveyed at that time.
Early in 1979 the plaintiff employed a decorator to renew the wallpaper in the house and it was then discovered that large areas of the wall had plaster which was not adhering to the blockwork. The plaintiff called in an architect who discovered other defects.
The duty of care owned by the maker of an article under the principle of Donoghue v Stevenson relates to defects which the maker can foresee are not likely to be discovered by the kind of examination he can reasonably expect to be made before the article is put into use. I have no evidence to show any kind of examination which could reasonably be anticipated by the builder of a house in this class which cost approximately £20,000 when Mr Colgan bought it in 1976. If I were entitled to use my own knowledge I would think that it is not usual for the buyer of a house in this price class to have it professionally surveyed. Under the Donoghue v Stevenson principle in order to extablish negligence I think the onus was on the plaintiff to establish that the manufacturer should have anticipated that his product would be put into use without such an examination as would have discovered the dangerous defect. S. 34(2)(f) of the Civil Liability seems to me to have shifted the onus of proof to the defendants in product liability cases. The section provides that the fact that there has been a reasonable possibility or probability of examination after the thing that had left the hands of the defendants shall not, by itself, exclude the defendants’ duty but may be taken as evidence that he was not in the circumstances negligent in parting with the thing in its dangerous state. I hold that the builder’s liability is not excluded by the fact that the defects could have been discovered by the plaintiff if he had the house professionally surveyed before he bought it.
Having considered the evidence on both sides I find that the builder of this house was careless in regard to certain matters in its construction and that in consequence the roof is defective, the internal plastering is defective, the porch roof is leaking and the cavity in the external walls is not the proper width which is a minimum of two inches. I am not satisfied that the plaintiff has established that the sittingroom window lintel is inadequate for the span or that the flashing of the chimney is defective.
I am satisfied that the defect in the cavity has not caused any problems to date with damp penetration and is unlikely to do so in the future. The effect of the cavity not being of adequate width is that the house is not as well insulated as it ought to be but this does not threaten the health or safety of the occupiers. In my view the width of the cavity can be regarded only as a defect in the quality of the house.
The trouble with the porch roof is due to an inadequate flashing which did not cause trouble until after the plaintiff had bought the house. It is now causing dampness in the sittingroom and this will spread in the course of time if not remedied and will cause physical deterioration in the fabric of the house. It is not, in my view, a defect which can be a cause of danger to health or safety.
There is no evidence that the internal plastering is dangerous to health or safety except in one place, that is, on the lintel over the arch between the dining room and the sitting room. If the loose plaster at that point were to fall it could possibly cause injury to someone but apart from that the loose plaster in my view amounts to a defect of quality only.
The roof defects consist of the absence of diagonal bracing for the roof trusses and inadequate support for the roof sprockets and the fact that the blockwork walls are not carried up to meet the underfelt of the roof. These are defects which threaten the stability of the roof and in storm conditions could result in personal injury as the result of falling tiles or other possibly more serious roof damage.
In the case of Siney v The Mayor etc. of Dublin [1980]IR 400 the Supreme Court held the Corporation liable in negligence to the plaintiff in providing him with a flat which was not fit for habitation because of the defective design of the ventilation system. The ventilation system in the flat was found to amount to a serious concealed defect which the plaintiff could not have been expected to discover. The flat was provided by the Corporation in the exercise of statutory powers conferred by the Housing Act, 1966 and the Supreme Court held that the condition of the flat was a breach of an implied warranty in the contract of letting that the flat would be habitable. The court also considered a claim against the Corporation in negligence and held that the Corporation in their capacity *36 as Housing Authority owed a duty to the plaintiff to see that the flat he was provided with was fit for habitation and that they were negligent in failing to perform that duty. The Chief Justice and Henchy J who delivered the judgments of the appeal expressly confined their decision on negligence to the duty which they held the Corporation owed to the plaintiff under the Housing Act, 1966. They held that the question whether the Corporation would have been liable to the plaintiff apart from the Housing Act, 1966 under the principle of Donoghue v Stevenson did not arise. Henchy J said:
Following on Donoghue v Stevenson [1932]AC 562 it has been established by a line of decisions (examples of which are Dutton v Bognor Regis UDC[1972]1 QB 373, Anns v Merton London Borough Council [1977]2 All ER 492 and Batty v Metropolitan Property Realisations [1978]QB 554) that where a person including a builder or a local authority carelessly provides a dwelling in which there is a concealed defect which the occupier could not have discovered by inspection the person who provided the dwelling may be liable in negligence for personal injury or economic loss suffered as a result of the defect. What the precise conditions for or limitations of that liability are need not now be considered for I have no doubt that the principle of liability involved in those cases is applicable to the circumstances of this case.
I am satisfied by the reasoning of Lord McDermot LCJ in Gallagher v McDowell Ltd [1961]NI 26 and the decisions referred to by Henchy J that the principle of Donoghue v Stevenson applies to the relationship between the builder of a house and a subsequent occupier so as to entitle the occupier to recover damages against the builder for personal injuries caused by defects in the house which are attributable to the negligence of the builder and which are not discoverable by the kind of examination which the builder could reasonably expect the occupier to make before occupying the house. The facts of the present case make it necessary to consider some of the conditions and limitations on that liability referred to by Henchy J.
I think it is clear in the case of defects in the dwelling which threaten the health or safety of the occupier that he is entitled to recover expense incurred in removing such defects where he discovers them before they have caused injury. The right to recover damages of that kind was discovered to be beyond question by Lord Justice Denning in Dutton v Bognor Regis [1972]1 All ER 464 at p. 474) and by Lord Justice Sachs in his judgment in the same case at p.490. It was also the view of Lord Wilberforce in Anns v Merton LBC [1977]2 All ER 492) because at p. 505 Lord Wilberforce dealing with the application of the Statute of Limitations held that a cause of action arose ‘When the state of the building is such that there is a present or imminent danger to the health or safety of persons occupying it.’
I therefore hold that the plaintiff is entitled to the cost of making the roofs safe and making good the small portion of defective plaster which I have mentioned as a possible danger. I assess the damages under this head at £300.
The defect in the porch roof is due to an inadequate flashing and this is admitting moisture which is causing a damp patch on the sittingroom wall. It is a defect which did not appear until the last year or so but unless it is remedied there will be a gradual deterioration of the fabric adjoining parts of the dwellinghouse. It is not, in my view, a defect which threatens the health or safety of the occupiers. The defect in the internal plasterwork consists of the absence of a pro *37 per bond between the plaster and the blockwork walls over large areas. This defect has existed since the house was built and is probably due to the fact that the plaster was applied before the blockwork was properly dried out. I do not consider it a threat to the health or safety of the occupiers and it is in the nature of a defect of quality in the house. The existence of an inadequate cavity in the external walls is also a defect of quality. The house is not as well insulated as if the walls had a cavity of proper width. The defect does not affect the health or safety of the occupiers or the durability of the dwelling.
I have therefore to consider whether these defects which reduce the value of the dwellinghouse and, in the case of the leak from the porch roof, damaged the fabric of it are matters for which damages can be recovered by the occupier under the principle of Donoghue v Stevenson.
I do not think that the English decisions already referred to recognise any right to recover damages for defects of these kinds. In Anns v Merton LBC [1977]2 All ER 492 damages were held to be recoverable in respect of damage to the dwellinghouse itself from defective foundations. That case was an action brought not against the builder but against the local authority for breach of their duty to take reasonable care to secure compliance with the building bye-laws. The defect was a danger to the health and safety of the occupiers of the dwelling. Lord Wilberforce said (p. 505):
In my opinion they (the damages) may also include damage to the dwellinghouse itself; for the whole purpose of the bye-laws in requiring foundations to be of a certain standard was to prevent damage arising from weakness of the foundation which is certain to endanger the health or safety of the occupants.
In my opinion it does not follow from this that damages for damage to the dwellinghouse itself which does not threaten health or safety are recoverable against the builder. The builder’s breach was not a duty arising under a bye-law designed to ensure that the foundations are adequate to bear the house and thereby protect health and safety but of the common law duty of care recognised by the principle of Donoghue v Stevenson. I think that it is a duty to take care to avoid defects in the product which may cause personal injury or damage to property but the product itself has not been regarded as falling within the scope of the duty. The obligation of the builder or manufacturer in regard to the quality of his product is, in my view, something which ought to rest in contract only. It is not of the same nature as his common law duty under the principle of Donoghue v Stevenson because that duty is founded upon the concern of the law to see that the product is not a cause of injury or damage to persons or property subsequently affected by it. Where a defect is such that no question of such injury or damage arises I see no good reason for extending the principle of Donoghue v Stevenson to defects in the quality of the product itself. I would therefore hold that the plaintiff is not entitled to recover damages for the defects in the internal plaster (other than that mentioned) for the defect in the porch roof and for the builders failure to provide an adequate cavity in the external walls.
McBride v Boyle
Circuit Court
23 June 1928
[1928] 62 I.L.T.R 104
Judge Davitt.
June 23, 1928
Judge Davitt gave judgment in favour of the defendant, holding that there was no evidence before him that there was any obligation on landlord’s part to do the repairs or that any part of the premises were retained by the landlord in his control, and that there was no evidence of any negligence on landlord’s part. The fact that the landlord did repairs on receiving notice from the tenant was not evidence on which he could hold that there was any contractual liability to perform the said work, it might have been done by the landlord for the purpose of preserving the entire premises or done merely gratuitously.
Kilroy -v- Glenford Builders Ltd & ors;
Gray -v- Glenford Builders Ltd & ors [
[2018] IEHC 432 (19 July 2018)
High Court
Judgmentby:
Faherty J.
Status:
Approved
[2018] IEHC 432
JUDGMENT of Ms. Justice Faherty delivered on the 11th day of July, 2018
1. These matters come before the Court by way of the applications, respectively, of the third defendant, and the fourth and fifth defendants, to dismiss the plaintiffs’ claims for want of prosecution and/or for inordinate, inexcusable and prejudicial delay.
2. For the purpose of the within judgment the proceedings bearing record no. 2009/2999 P will be referred to as “the Kilroy proceedings”, and the plaintiff therein referred to as the first plaintiff, and the proceedings bearing record no. 2011/10401 P will be referred to as “the Gray proceedings” and the plaintiff therein referred to as the second plaintiff.
The Kilroy proceedings
3. The Kilroy proceedings concern an apartment known as No. 6, the Cedar, Cruagh Wood, Stepaside, County Dublin which is one of approximately 132 units constructed as a residential development at that location. The first plaintiff purchased the apartment in or about December 2005 and went into occupation thereafter. She alleges that there are various defects in her apartment and consequential dampness, condensation and mould growth. It is alleged that the property was inadequately insulated and/or that the flooring of the property did not have a proper damp proof membrane. The plaintiff claims damages for alleged personal injuries in the form of asthma and sinusitis as a result of the alleged defects and also claims special damages for remedial works.
4. The first defendant was a building contractor which entered into a building contract with the first plaintiff dated 3rd June, 2005. It ceased trading and was dissolved with effect from 20th January, 2016. The solicitors for the first defendant came off record on 24th October, 2011. The second defendant appears to have been a contractor engaged by the first defendant and is in voluntary liquidation. The third defendant is a firm of engineers. The fourth and fifth defendants were architects involved in the building project. The fifth defendant is since deceased. Accordingly, reference hereafter will largely be to the fourth defendant.
5. The first plaintiff claims that the third defendant were the engineers responsible for the structural engineering of the apartment complex and who had oversight of the building project. She claims that the fourth defendant was also engaged in both a primary and a supervisory capacity as the retained architects for the building project.
6. The first plaintiff commenced her proceedings against the first defendant by way of a personal injuries summons which issued on 31st March, 2009.
7. By Order of the High Court (Charleton J.) made 13th July, 2010, the second, third, fourth and fifth defendants were joined as defendants.
8. On 22nd August, 2010 the first plaintiff issued her amended personal injuries summons whereby she claims that she suffered personal injuries, loss, damage, inconvenience and expense as a result of,inter alia, the negligence and breach of duty including breach of statutory duty, nuisance, breach of contract and misrepresentation and/or negligent misstatement of the defendants, their respective servants or agents.
9. The amended personal injuries summons was served on the third defendant on 4th November, 2010. An appearance was filed on 11th November, 2010. The third defendant raised a notice for particulars on 27th January, 2011 and replies were received on 29th June, 2011. On 8th September, 2011, a notice seeking further and better particulars was served by the third defendant and on 15th September, 2011 it delivered its defence. On 3rd February, 2012, a notice of indemnity and/or contribution was served on the fourth and fifth defendants by the third defendant. On 6th March, 2012, the first plaintiff sought voluntary discovery from the third defendant. The first plaintiff replied to the request for further and better particulars on 16th July, 2012.
10. The fourth and fifth defendants entered an appearance to the amended personal injuries summons on 13th January, 2011 and raised a notice for particulars on 24th February, 2011. On 29th June, 2011, the first plaintiff replied to the notice for particulars. On 6th March, 2012, the plaintiff requested that the fourth and fifth defendants make voluntary discovery. The fourth and fifth defendants’ personal injuries defence was delivered on 13th July, 2012. On the same date they wrote to the plaintiff’s solicitors in respect of the plaintiff’s request for voluntary discovery.
11. On 10th October, 2013, the fourth and fifth defendants served the third defendant with a notice of indemnity and/or contribution.
12. The fourth and fifth defendants’ letter to the first plaintiff in response to the latter’s request for voluntary discovery was not replied to until 14th February, 2014 when an amended request for voluntary discovery was made. On 8th September, 2014, the fourth and fifth defendants requested that the first plaintiff confirm the extent of her alleged claim and/or to discontinue the proceedings.
13. On 16th July, 2015, the first plaintiff issued a notice of intention to proceed.
14. The fourth and fifth defendants’ motion to dismiss the first plaintiff’s claim for want of prosecution and/or on the grounds of delay was filed on 23rd June, 2016. The third defendant’s motion to dismiss issued on 14th July, 2016.
15. The third and fourth defendants maintain that the first plaintiff has failed to take any step in her proceedings since in or about 2012.
16. As between the third defendant and the first plaintiff, some seven affidavits have been sworn, four by Mr. Alistair Burroughs, Managing Director of the third named defendant and three by the first plaintiff.
17. In his grounding affidavit, Mr. Burroughs takes issue with the generic manner in which the first plaintiff’s pleadings are couched. He avers that the criticisms levelled against the third defendant do not appear to be directed to the structural issues for which the third defendant was retained in the development project. He avers that the tenor of the first plaintiff’s complaint is a failure to insulate the premises which, he states, was a matter for the architects and/or the appointed mechanical and electrical engineers’ remit. He avers that “[i]nsulation is not a structural issue relating to the stability, stiffness, robustness and durability of the basic structure for which a Civil and Structural Consulting Engineer such as the Third Named Defendant would normally be responsible.” He avers that insofar as a claim for misrepresentation has been made, the plaintiff has neither particularised nor withdrawn it and has simply attempted to respond generically so that the nature of the misrepresentation alleged against either the third and/or the fourth defendants remains “completely opaque”. He avers that the first plaintiff has provided “almost no sensible information relating to the issues alleged against the Third Named Defendant” and that no effort has been made to clearly explain the actual nature of the defect or why it would conceivably be the responsibility of the third defendant.
18. He further avers that no useful step has been taken by the first plaintiff since the service of the notice of intention to proceed and notes that the service of that document was precipitated by correspondence from the third defendant’s solicitors.
19. Mr. Burroughs further refers to another seven set of proceedings (which include the second plaintiff’s proceedings) which were issued and served on the behalf of other clients of the first plaintiff’s solicitors who have apartments in the same complex.
20. Mr. Burroughs highlights correspondence which passed between the first plaintiff and the third defendant. On 21st August, 2015, the third defendant’s solicitors wrote requesting,inter alia, that the plaintiff might provide copies of any expert report procured by her. No response was received. On 13th January, 2016, the third defendant’s solicitors again wrote making complaint about the absence of a response and requesting that the first plaintiff serve a notice of discontinuance, failing which a motion to dismiss would be brought. This and a further letter dated 29th January, 2016 failed to elicit a response. The third defendant sent a further letter on 17th February, 2016, advising that an application would be made to strike out the first plaintiff’s proceedings. This precipitated a response dated 24th February, 2016 from the first plaintiff’s solicitors which advised that they were instructed to proceed with the matter by way of issuing a motion for discovery in the Kilroy proceedings and by way of delivering statements of claim in the other cases.
21. No motion for discovery was in fact brought and no statements of claim delivered in the other cases. The Court has been advised that since the issue of the within motions, all of these proceedings, save those of the first and second plaintiffs have been discontinued.
22. As a basis for the claim that the first plaintiff’s delay is inordinate and inexcusable, Mr. Burroughs points to the fact that the plaintiff’s proceedings did not issue until 31st March, 2009, some three years and five months post completion of the development, and some considerable time after the plaintiff first complained about dampness, and almost a year after mould growth was allegedly detected in the plaintiff’s apartment by a building surveyor. He avers that the third defendant was not joined as a defendant until July, 2010, some fifteen months after the proceedings had commenced and almost five years after the development had been completed. He states that the first plaintiff’s proceedings have “progressed exceptionally slowly” since then.
23. Mr. Burroughs avers the prejudice which has been caused to the third defendant by the delay “is by no means general in character”. It is averred that over and above the failure of the first plaintiff to provide any sensible breakdown of the claim being made against the third defendant, the position of the third defendant has been severely prejudiced by the death in 2014 of Mr. Graham Elmes, a director with the third defendant. Mr. Burrough states avers that while he is managing director of the third defendant, he was not directly involved in the engineering projects carried out by the third defendant in respect of the development of Cruagh Woods. The third defendant had a small number of engineers, namely Eamon Sweetman, Denis O’Brien, Robert Power and Graham Elmes none of whom now carry out engineering work for the third defendant. Mr. Burroughs avers that it was Graham Elmes who was most closely connected with the building project and accordingly “a person of considerable importance in the Defence of the action, given his close knowledge of the file and what was undertaken by way of responsibility to the First Named Defendant”. Mr. Burroughs avers that the late Mr. Elmes would have been on site when the foundations were being constructed. He avers that from his enquiries, he has determined that Mr. Sweetman had a limited role in relation to the project in that his name appears on certain certificates which he signed on behalf of the third defendant. Mr. Burroughs states that Mr. Sweetman has little or no recollection of his involvement in the project and that any site visit would have been carried out by other members of the third defendant’s staff. It is thus averred that “the death therefore of Mr. Elmes is one which is both ultimately and also highly prejudicial for the Defence of the case as he was the person who provided instructions on matters of fact to the solicitors acting in the defence of these proceedings.”
24. The first plaintiff swore a replying affidavit on 24th November, 2016. At the outset she accounts for the delay in the prosecution of her proceedings on the basis that she was under the impression “illusory as it now appears” that her legal team was progressing her case and that the passage of time between legal events in the case was due to inherent delays in the legal system rather than issues specifically attributable to the first plaintiff. The first plaintiff makes this averment on her own behalf and also on behalf of the second plaintiff (the Gray proceedings). She states that she has now changed “our entire legal team” and if cases are permitted to proceed, her now new legal team “intend to progress the matters as quickly as practicable”.
25. She avers that arising from the damp issues she retained experts from 2008 and that opening up works were conducted in 2012 which showed that the floor of her apartment was composed of pre fabricated concrete slabs with no top screed, insulation or damp proof membrane.
26. The first plaintiff acknowledges that there is a passage of time (29th June, 2011 to 17th July, 2015) which may well be viewed as being inordinate but claims that the delay is excusable.
27. She refers, in particular, to the fact that in 2012 Waterman Moylan Engineering Consultants were on site taking samples from her apartment. She alludes to numerous unsuccessful attempts to contact her previous solicitors and unanswered requests for updates from the said solicitors. She refers to a number of personal events in 2014 and 2015, namely her marriage to the second plaintiff in June 2014, a time which she states that her and the second plaintiff’s legal cases “were very far from our minds”. In November 2014 she travelled to Australia to attend her brother’s wedding. She refers to medical difficulties which commenced in or about March 2015 as a result of which she underwent medical treatment and surgery in the latter half of 2015 which rendered her unable to return to work until in or about April, 2016. She states that her return to work was against medical advice and was as a result of financial necessity. She avers that while she was dealing with her medical issues she “operated at all material times under the impression that [her] previous solicitors would deal with [her and the second plaintiff’s cases] whilst we concentrated on our family and health”. Accordingly, while she concedes the delay in the cases is inordinate she states that it should be excused for the reasons given.
28. The first plaintiff addresses Mr. Burrough’s claim of prejudice as a result of the death of Mr. Elmes in the following terms:
“15…Apart from this particularly bald assertion [that Mr. Elmes was responsible for the civil and structural engineering design of the development] the deponent does not tender any specific documentary evidence in support of this assertion and appears to be asking the Court to form the view that this person, in relation to the construction of some 132 accommodation units, was [the] only one capable of given this information. This, I say and believe, is quite a leap of faith to be undertaken. Furthermore, the interplay of relationships between the respective contracting parties in such a substantial development would be well documented and not a matter for personal evidence. A similar point arises in relation to the additional prejudice alleged in the Burroughs Affidavit due to the poor recollection of Eamon Sweetman, the unfamiliarity of Denis O’Brien with the project, and the fact that the deponent was ‘never at the site’. It is also of note that Burroughs Affidavit is careful not to assert that there are no documents governing the complained of inter-relationships but rather purports to assert that a personal nexus and knowledge of the file of the deceased Mr. Elmes are of fundamental importance to the defence of the action.
16. The Third Defendant was involved in the construction of numerous developments within this jurisdiction and thereby bears responsibility in relation to any issues which may arise therefrom.”
29. She also avers that it is the insurers on behalf of the third defendant who are defending the action and “thereby ample cover appears to remain in situ in this jurisdiction”.
30. In his second affidavit, Mr. Burroughs takes issue with the first plaintiff’s assertion that the third defendant had oversight of the building of the apartment project. He states that the third defendant were involved as structural engineers “which had nothing to do with the insulation of the projects and which is a matter either for the architect or the mechanical and electrical engineers”. He further takes issue with the “shot-gun” approach adopted by the first plaintiff in naming a number of defendants without identifying with any clarity why any one person was responsible. He avers that insofar as the first plaintiff has involved the third defendant, an essential aspect of the third defendant’s proofs would be that the best evidence would be put forward, which the third defendant is unable to do because of the death of its principal witness. He avers that the first plaintiff’s attempt to speculate in relation to the value or otherwise of documents is unhelpful in circumstances where she herself has made no effort to distinguish between any of the defendants.
31. He further avers: (at para. 19)
“Despite the protestations by the Plaintiff that the new legal team would in some way change matters, it is a matter of record that, despite the service of the Notice of Motion on 18th day of July 2016, it took until 24th November, 2016 for the Plaintiff to actually swear an Affidavit. While the Plaintiff may well seek to shift responsibility for this onto her current or former solicitors, the fact remains that the Plaintiff, at a remove of in excess 10 years after the events giving rise to her general complaint in relation to the dwelling, now proposes to deliver a “comprehensive Statement of Claim” in the matter. Leaving aside the fact that this is being proposed without exhibiting the amendments, the fact that the claim is in fact a personal injuries claim, with no such provision, the fact that the Plaintiff apparently intends to make yet a completely different claim, is a source of concern in its own right.
32. In her second affidavit sworn 15th March, 2017, the first plaintiff challenges Mr. Burrough’s assertion that the third defendant’s role was merely that of structural engineers. She refers, in particular, to the Opinion on Compliance furnished by the third defendant and to the Architects Opinion on Compliance furnished by the fourth and fifth defendants (all of which was done in 2005).
33. She refers to having commissioned Herr Engineering and Design Ltd to investigate and establish the extent of the dampness problem and to reports furnished by that firm in April, 2008, September, 2008 and January, 2011 which, she avers, identified that the construction of her apartment was not in compliance with Building Regulations.
34. With regard to the later survey report from Waterman Moylan Engineering Consultants dated 30th January, 2012, the first plaintiff avers that she spoke to her former solicitor about a week before the core tests were conducted by Waterman Moylan and that she “was informed that the Defendants had been invited to observe the tests being carried out by Waterman Moylan and/or to carry out their own inspection and investigations at the same time”. She avers that the conclusions of the Waterman Moylan report were that the construction used in the ground floor slab of her apartment was seriously defective and in contravention of the Building Regulations.
35. In his third affidavit, Mr. Burroughs disputes the first plaintiff’s assertion that the third defendant was invited to observe the tests being carried out by Waterman Moylan. He states that neither he nor his solicitor have knowledge of any such invitation. He further takes issue with the first plaintiff’s assertion that the third defendant is now in the same position as it was in 2005 or 2012 and asserts that this cannot be the case given that Mr. Elmes is now dead. He further refutes the suggestion that the Opinion on Compliance furnished by the third defendant had any relevance to the issue of insulation or damp proof membranes and he avers that insofar as there were interactive inspections by the third defendant in 2005, these did not involve the opening up of works which had been completed.
36. In the course of her third affidavit, the first plaintiff asserts that some of the defects complained of “are visible from the external structure and are noticeable from a visual inspection of the exterior of the property.” She asserts that “[t]his would have been identifiable from a visual site inspection for the purpose of certifying a property as being incompliance with building regulations”. She again asserts that she was informed by her solicitors on record at the time that an invitation had been extended to the defendants to attend at the investigations being conducted by Waterman Moylan. She again reiterates that “it was not Mr. Elmes that certified the building was built in compliance with building regulations and in circumstances where there are visible defects to the exterior of the building, this would have been visible to Mr. Sweetman and would not have necessitated opening-up works.” She further avers “[w]hile Mr. Burroughs [contends], at paragraph 17, that Mr. Elmes bore the [principal] responsibility for the project, Mr. Elmes delegated the responsibility of inspecting and signing off compliance to another representative of the Third Defendant. This delegation was presumably based on Mr. Elmes notes and memos taken at the time of the various milestone inspections and after an onsite visual inspection in order for Mr. Sweetman to be satisfied the building was compliant”.
37. In his fourth affidavit, Mr. Burroughs refers to correspondence sent by the third defendant’s solicitors on 16th June, 2017 to the first plaintiff’s solicitors requesting,inter alia, details regarding the “visible defects” and of the invitation which it is claimed was sent to the third defendants to observe investigation works. He states that there was a “belated” response of 7th July, 2017 which merely states that the first plaintiff’s present solicitors were advised that the first plaintiff’s previous solicitors had advised her of the said invitation but that the first plaintiff did not have correspondence to this effect.
38. In response to the first plaintiff’s reliance on the fact that Mr. Sweetman was the person responsible for signing the third defendant’s opinion on compliance, Mr. Burroughs avers:
“10… As previously deposed to, Mr. Elmes Deceased bore principal responsibility for the project. The difficulties involved in defending a case where there is a material witness who has died through the prolonged delay by the Plaintiff is amplified by the continued refusal of the Plaintiff to identify what she says were visible defects, which should have been identified at time of certification. The fact that in 2017 the Plaintiff is still not prepared to provide this information makes it all the more difficult to address the type of argument being put forward by the Plaintiff. The Defendant does not make the case that it has no Defence to the Plaintiff’s claim, but makes the case that it has been significantly prejudiced in the defence of the claim because of the unavailability of a material witness. With due respect, the assertions made in relation to the adequacy of documentation are mere speculations on the part of the Plaintiff. The need to explain events, interpret notes and comment on what was or was not visible at the time of the original construction, are all matters which, in the ordinary course would be dealt with by the person with principal responsibility under the project. Given the amorphous character of the Plaintiff’s latest allegations, the potential for further prejudice is palpable.”
39. The fourth and fifth defendants’ application to dismiss the plaintiff’s claim is grounded on the affidavit of their solicitor, Ms Aoife Ryan. She avers therein to the first plaintiff’s significant pre-commencement delay, in addition to the post-commencement delay. She avers that it is unfair and prejudicial to expect a defendant to properly defend proceedings brought against it which concerns matters which occurred in excess of ten years ago particularly in circumstances where the first plaintiff has demonstrated a clear want or absence of intention to prosecute her claim.
40. In her replying affidavit, the plaintiff highlights the same matters as were set out in her response to Mr. Burroughs. She asserts that the fourth defendant is attempting to “piggyback” on the third defendant’s motion.
41. Ms. Ryan’s second affidavit takes issue with the plaintiff’s assertion that the fourth defendant is attempting to “piggyback” on the application brought by the third defendant in circumstances where the fourth and fifth defendants’ motion issued a number of weeks prior to the third defendant’s motion. She reiterates her complaint that the first plaintiff has not sought to explain any of the pre-commencement delay in respect of her claim. She highlights the fact that the professional negligence proceedings issued against the fourth defendant has resulted in the payment by him of increased yearly insurance premiums.
42. In her responding affidavit, the first plaintiff highlights,inter alia, the Architect’s Opinion on Compliance furnished by the fourth and fifth defendants on 24th November, 2005 in respect of her apartment. She again highlights the efforts made by her to resolve the issues with her apartment, initially by liaison with the first defendants and thereafter commissioning Herr Engineering and Design Ltd to investigate and establish the extent of the problem. She refers to the further investigations conducted by Waterman Moylan Engineering Consultants in 2012 whose report dated October 2012 identified the same issues as the reports of Herr Engineering and Design Ltd. She again contends that the defendants in the proceedings were invited to observe the tests being carried out by Waterman Moylan and/or to carry out their own inspection and investigations at the same time. The first plaintiff cannot accept that the defendants are entirely prejudiced by the passage of time given that the building/design error of which she complains (the absence of insulation on the ground floor slab) remains in the same physical condition as pertained in 2005 and 2012
43. In her third affidavit, Ms. Ryan asserts that neither the existence nor the contents of the Opinion on Compliance furnished by the fourth and fifth defendants provide any explanation for the first plaintiff’s inordinate delay. She further highlights that the first plaintiff has not exhibited the reports produced by Herr Engineering in 2008. She goes on to aver:
“6…I say that the intervention of Herr Engineering and Design Ltd two years following the Plaintiff’s knowledge of the suspected alleged defects … further highlights the pre-commencement delay of the Plaintiff in the prosecution of her claim in that she initiated proceedings against the First Named Defendant on the 31st day of March, 2009 and did not join my clients to these proceedings until October 2010 …”
44. Ms. Ryan also avers that no one in her office received any communication from the first plaintiff’s former solicitors inviting the fourth and fifth defendants to either observe Waterman Moylan’s tests or carry out investigations of their own. She takes specific issue the plaintiff’s assertion that the fourth defendant is not prejudiced on the basis that the alleged building/design error in the plaintiff’s apartment remains in the same physical condition as it was in 2005 and 2012. Ms. Ryan describes this as “an extraordinary proposition” in circumstances where it is clear from the first plaintiff’s various affidavits that a number of tests have been carried out and a number of attempts made to remedy the alleged defects. She asserts prejudice:
“in circumstances where (i) it is unfair to expect witnesses for the Fourth and Fifth Named Defendants to recall events which occurred in excess of eleven years ago; (ii) the Plaintiffs outstanding proceedings … amount to an action in professional negligence which has resulted in an increase in annual insurance premiums … and (iii) the death of Graham Elmes, who the Third Named Defendant identifies as having a fundamental role in the building project …has resulted in the loss of a key witness as to issues of fact between the Third, Fourth and Fifth Named Defendants.”
The Gray Proceedings
45. The second plaintiff’s claim is an action for damages in connection with the construction of an apartment at No. 3, the Cedar, Cruagh Wood, Stepaside, County Dublin. He issued his plenary summons on 17th November, 2011. The second plaintiff’s proceedings were one of seven such sets of plenary proceedings instituted by apartment owners. The plenary summons was served on third defendant on 6th November, 2012, to which an appearance was entered on 22nd November, 2011. It was also served on the fourth and fifth defendants on 6th November, 2012. On 19th July, 2016, a conditional appearance was entered on the fourth and fifth defendants’ behalf for the purpose of bringing the within application.
46. On 4th December, 2013, the solicitors for the third defendant wrote to the second plaintiff’s solicitor complaining that no statement of claim had been delivered despite the fact that the proceedings had been served just before the expiry of the plenary summons. The second plaintiff was invited to serve a notice of discontinuance. No response was received. The third defendant’s solicitor wrote again on 25th February, 2014 recording their expectation that a notice of intention to proceed would have been served if the second plaintiff intended to advance his action. This letter was not responded to. Further letters were sent on 16th March, 2015 and 10th July, 2015, recording the third defendant’s complaints regarding the delay, and highlighting that the works which gave rise to the second plaintiff’s proceedings had been completed some ten years earlier. The second plaintiff’s solicitors responded on 17th July, 2015 enclosing a notice of intention to proceed. On 22nd July, 2015, the third defendant wrote requesting a fully particularised statement of claim within two weeks.
47. The third defendant wrote again to the second plaintiff’s solicitors on 21st August, 2015 noting the expiry of the notice of intention to proceed and inviting the second plaintiff to provide copies of any expert reports to all of the defendants. They further advised that the alleged floor finishes and insulation defects were beyond the scope of the third defendant’s responsibilities.
48. This letter was not responded to. The second plaintiff was again written to on 13th January, 2016 and was invited to serve a notice of discontinuance failing which an application would be brought to strike out the proceedings. A reminder letter to this effect was sent on 29th January, 2016. This again was not responded to. The third defendant’s solicitor wrote again on 17th February, 2016, advising that unless a written response was received within seven days an application to strike out would be brought. On 24th February, 2016 the second plaintiff’s solicitors responded suggesting that a motion for discovery would issue in the Kilroy proceedings and that statements of claim would be delivered in the other proceedings (including the second plaintiff’s).
49. In his affidavit grounding the application on behalf of the third defendant to strike out the second plaintiff’s proceedings, Mr. Burroughs avers that despite the assurances contained in the letter of 24th February, 2016, no action was taken and no statement of claim has been received in respect of the second plaintiff’s claim. He goes on to state:
“11. At the date of swearing hereof, the Plaintiff has not served a Statement of Claim so one could only guess what discovery may be required if he were to be permitted to proceed. Where this to occur, the Third Named Defendant is likely to be further prejudiced as it is unlikely to be able to obtain relevant discovery documentation from the First Named Defendant which is no longer represented and was dissolved with effect on 20 January 2016. The Second Named Defendant has been in voluntary liquidation since 2008 and is not legally represented either”.
50. The second plaintiff swore an affidavit on 24th November, 2016 wherein he states that the contents of the first plaintiff’s affidavit sworn 24th November, 2016 were an answer to the third defendant’s application to dismiss his proceedings.
51. In a later affidavit sworn 23rd March, 2017, the second plaintiff, similarly to the first plaintiff, makes reference to having changed his legal team. He refers,inter alia, to the fact that in November 2005 the third defendant furnished an Opinion on Compliance in respect of his apartment at 3 The Cedar, Cruagh Wood.
52. Mr. Burroughs swore an affidavit in response on 25th April, 2017. He takes issue with the second plaintiff’s reliance on expert reports obtained by the first plaintiff which were not exhibited by the second plaintiff. Moreover, Mr. Burroughs avers that the second plaintiff has not explained as to why, when he became aware of issues regarding his apartment in 2006, and certainly by September 2008, he did not act until 2011. He further states that the second plaintiff has not explained why he has seen fit to join the third defendant in the proceedings. Issues is also taken with the second plaintiff’s reliance on information given by the first plaintiff to the effect that the third defendant had been invited to observe tests being conducted by Waterman Moylan in 2012.
53. The second plaintiff swore a further affidavit on 16th June, 2017, wherein,inter alia, he states that any samples that might now be taken by the defendants from his property will return the same core sample results as if taken in 2012 or indeed in 2005. He thus asserts that the third defendant cannot claim prejudice by virtue of not having conducted investigations earlier.
54. In his fourth affidavit, Mr. Burroughs asserts that the second plaintiff has not offered any “sensible explanation” for his delay in issuing proceedings, or in prosecuting them in circumstances where the second plaintiff’s own affidavits disclose that he had the benefit of the first plaintiff’s reports which were obtained in 2008. It is further averred that while the second plaintiff has referred to alleged defects visible from the exterior of the building (in common with the first plaintiff), he has not seen fit to plead the alleged defects or identify them on affidavit. Mr. Burroughs states that it is “intrinsically prejudicial” that the second plaintiff should seek to rely on defects which he is not prepared to outline.
55. The fourth and fifth defendants’ motion to dismiss the second plaintiff’s case is grounded on the affidavit of Mr. Noel Devins, solicitor for the fourth and fifth defendants. Mr. Devins avers to the second plaintiff’s inordinate and inexcusable delay in or about the commencement and subsequent prosecution of his proceedings. It is asserted that it is unfair and oppressive to expect the third and fourth defendants to defend the claim in respect of matters which occurred in excess of ten years ago and where the second plaintiff has demonstrated a clear want absence of intention to prosecute his claim in a timely fashion, including by delivering a statement of claim. The second plaintiff’s response, set out in replying affidavit sworn 23rd March, 2017 echoes that of the first plaintiff.
56. In an affidavit sworn 11th May, 2017, Ms. Ryan, on behalf of the fourth defendants, avers that it was “highly probable” that the second plaintiff’s state of knowledge of alleged defects ran from in or around January 2006 and that this “highlights the inordinate pre-commencement delay” in prosecuting his claim. Ms. Ryan repeats the same prejudicial factors as disposed to in her affidavits grounding her application to dismiss the first plaintiff’s proceedings.
57. In his third affidavit sworn 16th June, 2017, the second plaintiff rejects allegations of prejudice and maintains that it is open to the defendants to take core samples from his apartment. He contends that significant documentation is available to the defendants from the construction of the project and on site inspections conducted at relevant time. Moreover, he states that the defendants are on notice of all issues since the issuing of the first plaintiff’s proceedings. He avers that a judge at the trial of the issue would be in a better position to determine the prejudice, if any, that the defendants would suffer and to balance that prejudice against the prejudice the second plaintiff would suffer if his proceedings were dismissed, in circumstances where he does not have a marketable title for his property.
The relevant legal principles
58. The fundamental principles to which the Court must adhere in applications such as the present are set out inPrimor Plc. v. Stokes Kennedy Crowley[1996] 2 I.R. 459. A party seeking dismissal on the grounds of delay in prosecution of an action must establish that the delay has been inordinate and inexcusable. Even when it is established that there has been both inordinate and inexcusable delay the Court must exercise a judgment on whether it is in discretion, on the facts of the case, the balance of justice is in favour or against the case proceeding.
59. More recently, Irvine J. inFlynn v. Minister for Justice[2017] IECA 178 adopted, with some modification, the principles as formulated by the trial judge (Barrett J.) in that case. She stated:
“19. In the course of his judgment the trial judge set out a summary of the key principles to be considered by a court when asked to exercise its inherent jurisdiction to dismiss proceedings on the grounds of inordinate and inexcusable delay. He did so by reference to a number of relatively recent decisions on the issue. Given that, subject to one important exception, these are not controversial I gratefully adopt and below set forth the summary of the relevant principles identified by Barrett J. at para. 5 of his judgment. I have also taken the liberty of including one additional factor emanating from the judgment of Fennelly J. in Anglo Irish Beef processors v. Montgomery[2002] 3 IR 510.
“(1) The court has an inherent jurisdiction to dismiss a claim on grounds of culpable delay when the interests of justice require it to do so.
(2) The rationale behind the jurisdiction to dismiss a claim on grounds of inordinate and inexcusable delay is that the ability of the court to find out what really happened is progressively reduced as time goes on, putting justice to hazard.
(3) It must in the first instance be established by the party seeking dismissal of proceedings for want of prosecution on the ground of delay in the prosecution thereof, that the delay was inordinate and inexcusable.
(4) In considering whether or not the delay has been inordinate or inexcusable the court may have regard to any significant delay prior to the issue of the proceedings. Lateness in issuance creates an obligation to proceed with expedition thereafter.
(5) Even when delay has been inordinate and inexcusable the court must exercise a judgment on whether, in its discretion, on the facts, the balance of justice is in favour of or against the case proceeding.
(6) Relevant to the last issue is the conduct of the defendant and the extent to which it might be considered to have been guilty of delay, to have acquiesced in the plaintiff’s delay or implicitly encouraged the plaintiff to incur further expense in pursuing the claim. Delay in this context must be culpable delay.
(7) The jurisdiction to dismiss proceedings on grounds that, due to the passage of time but without culpable delay on the part of the plaintiff, a fair trial is no longer possible, is a distinct jurisdiction in which there is a more onerous requirement to show prejudice on the part of the defendant, amounting to a real risk of an unfair trial or an unjust result.
(8) In culpable delay cases the defendant does not have to establish prejudice to the point that it faces a significant risk of an unfair trial. Once a defendant establishes inordinate and inexcusable delay, it can urge the court to dismiss the proceedings having regard to a whole range of factors, including relatively modest prejudice arising from that delay.
(9) Prejudice to the defendant may arise in many ways and be other than that merely caused by the delay, including damage to the defendant’s reputation and business.
(10) All else being equal, persons against whom serious allegations are made that affect their professional standing should not have to wait over a decade before being afforded opportunity to clear their name.
(11) The courts are obliged under Article 6(1) of the European Convention on Human Rights to ensure that all proceedings, including civil proceedings are concluded within a reasonable time. Any court dealing with an application to dismiss a claim on the grounds of delay must be vigilant and factor into its considerations, not only its own constitutional obligations but the State’s Convention obligations.
(12) The courts must make it clear that there will not be an excessive indulgence of delay, because, if they do not, they encourage delay, leading to breach by the State of its Convention obligations.
(13) There is a constitutional imperative to bring to an end a culture of delay in litigation so as to ensure the effective administration of justice and basic fairness of procedures. There should be no culture of endless indulgence. (The court notes this is not the same as saying that there can be no indulgence).
(14) The courts can bring to their assessment of any (if any) culpability in delay the fact that the cost of litigation may act as a disincentive to prompt action.
(15) As in every case, the courts must bring to their considerations a necessary sensitivity to the personal and social background of persons who present before them.
(16) Where a plaintiff is found guilty of inordinate and inexcusable delay there is a weighty obligation on the plaintiff to establish countervailing circumstances sufficient to demonstrate that the balance of justice would favour allowing the claim proceed.”
Considerations
60. It is not disputed that the delay in both the first and second plaintiffs’ cases is inordinate. It is also common case that the notices of intention to proceed filed by the both the first and second plaintiffs on 21st July, 2015 do not constitute a step in the proceedings, as said by Fennelly J. inAnglo Irish Beef Processors Ltd. v. Montgomery[2002] 3 IR 510.
61. Furthermore, counsel for the plaintiffs acknowledges that the second plaintiff has offered little excuse for the delay in advancing his proceedings, such that his delay is inexcusable.
62. Counsel argues however that that is not the case as regards the first plaintiff. She has set out on affidavit a number of factors which she says accounts for the delay in the progressing of her proceedings. It is submitted on behalf of the third and fourth defendants that that is not sufficient for the first and second plaintiffs to ascribe the blame for the delay to their former solicitors given that it is a matter for the plaintiffs and their solicitor to establish their respective responsibilities. Counsel for the third defendant submits that if fault for the delay lay with the first and second plaintiffs’ solicitors then they have other options to address this and the third defendant should not be put to the hazard of having to defend proceeding where inordinate and inexcusable delay has occurred and in circumstances where the third defendant pleads specific prejudice. It is thus submitted that the option of the plaintiffs pursuing their former solicitors in respect of the delay should be weighed by the Court when considering the balance of justice. It is further submitted that it is not sufficient for the first plaintiff to rely on family and medical matters for her failure to progress her case.
63. I accept the submissions of the third and fourth defendants that insofar as the first (and second) plaintiffs seek to attribute the inordinate delay in prosecuting their respect proceedings to their previous legal team that is not of itself a sufficient ground to excuse an inordinate delay. InGilroy v. Flynn[2005] ILRM 290, Hardiman J. discussed the prospect of refusing to dismiss a claim for want of prosecution when the delay was attributable to legal advisors. He stated: at p. 294
“[T]he assumption that even grave delay will not lead to a dismissal of an action if it is not on the part of the plaintiff personally, but of a professional advisor, may prove an unreliable one.”
64. Nor do I consider it sufficient for the first plaintiff to proffer life events such as her marriage to the second plaintiff in 2014 and her travelling to Australia in late 2014 to attend her brother’s wedding as sufficiently reasonable excuses for the delay in advancing her proceedings.
65. Undoubtedly, however, the first plaintiff had a serious illness between in the period March 2015 to April, 2016. Counsel for the fourth defendant highlights that no letter was ever sent to the fourth and fifth defendants to inform them that the first plaintiff was unwell.
66. This submission notwithstanding, the Court accepts that the first plaintiff’s illness goes someway towards explaining some of the delay in her case but, overall, I am not persuaded that her illness provides a sufficient justifiable excuse for the inordinate delay which has occurred.
67. Accordingly, the Court must assess where the balance of justice lies as regards the respective proceedings of both the first and second plaintiffs.
68. A number of arguments have been canvassed by the third and fourth defendants in aid of their respective submissions that the balance of justices lies in favour of the dismissal of the proceedings.
69. The plaintiffs’ cases relate in effect to establishing responsibility for alleged defects in their respective apartments. It is argued by the defendants that albeit that the first plaintiff commissioned a number of reports which deal with causation, she has not stated whether these reports attribute liability to the third or fourth defendants. What is at issue is whether these defendants, or either of them, are at fault for not detecting an alleged lack of insulation in a building constructed by the first and second defendants. Furthermore, the third defendant contends that the first plaintiff has not been forthcoming about the extent of the remedial work carried out by the first defendant. It is also argued that insofar as the first plaintiff refers on affidavit to defects in the building which are visible, and which the third and fourth defendants are at liberty to inspect, she has not specified what those defects are. The third defendant argues that the question which arises is whether these defects were visible when the third defendant certified the building in 2005. Thus, the third defendant maintains that it is not an answer to the third defendant’s concerns for the plaintiffs to contend that their apartments remain available for inspection.
70. Furthermore, it is only at an extremely late stage (in affidavits sworn in 2017 for the purpose of the within motions) that the first and second plaintiffs asserted a claim in respect of the certification done by the third defendant in 2005. The third defendant also points out that the issuing of the Opinion on Compliance is not referred to at all in the first plaintiff’s amended personal injury summons despite the first plaintiff being in possession of a number of expert reports by the time her personal injury summons issued.
71. It is argued that a fundamental difficulty for the fourth defendant is the generic manner in which the first plaintiff’s case is pleaded. It is submitted that there is no clear distinction drawn between the third and fourth defendants as to their respective roles and responsibility for the first plaintiff’s alleged loss. As set out inFarrell v. Arborlane Ltd.[2016] IECA 224, this is a factor for the Court to weigh in considering the balance of justice. It is submitted that the generic nature of the first plaintiff’s claim is exacerbated by her failure or refusal to particularise aspects of her pleadings, as was requested by the fourth and fifth defendants by letter dated 24th February, 2011. The response of the first plaintiff on 29th June, 2011 was that she would furnish full particulars of alleged breaches of the Building Regulations. These particulars have not been received.
72. In response to the foregoing submissions, counsel for the plaintiffs contends that it is noteworthy that the defendants do not maintain that they cannot defend the plaintiffs’ respective proceedings. It is submitted that the defendants allude to generic difficulties only. In particular, counsel refutes the fourth defendant’s contention that the first plaintiff’s claim is generic. Albeit not pinned down as well as it might have been, the claim of the first plaintiff is such that, as professionals, the third and fourth defendants can readily discern from the pleadings the nature of the first plaintiff’s claim against them. Counsel points to paragraph 14 of the amended personal injury summons which, it is submitted, makes clear the particulars of negligence, breach of duty ( including breach of statutory), breach of contract, nuisance and misrepresentation being made against the third defendant and/or fourth defendants, namely that,inter alia, they:
“
…
(c) Failed to make any or any adequate provision for floor insulation.
(d) Failed to ensure that the works were carried out or completed in accordance with plans, maps, designs, specification and planning permission.
…
(i) Failed to ensure a damp proof membrane was applied to the flooring.
(j) Failed to take account of the insulation requirements of a ground floor apartment with an unheated car park below said apartment.
…
(n) Failed to take account of Building Regulations made pursuant to the Building Controls Act, 1990.
(o) Failed to ensure insulation, in breach of Building Regulations 2002.”
73. Counsel also says it is thus not the case, as appears to be suggested by the third and fourth defendants, that the first plaintiff has not set out her case against them. It is further submitted that all matters could have been investigated by the defendants before they filed their respective defences.
74. Counsel also points to the fact that the first plaintiff has made specific reference in her affidavits to the Opinions on Compliance which the third and fourth and fifth defendants furnished in 2005.
75. Insofar as the defendants query what they are to do at this juncture, it is the plaintiffs’ submission that it is open to them, as with all defendants in cases such as the present, to inspect the plaintiffs’ apartments. This is particularly so where each of the defendants have put in a defence to the first plaintiff’s claim. It is suggested that there is nothing to prevent the defendants from carrying out the type of core tests which were carried out on behalf of the first plaintiff in 2012.
76. Overall, having regard to the submissions advanced by the third and fourth defendants, while some weight has to be given to the argument that the first plaintiff’s case could have been pleaded with more specificity, the Court is not persuaded that the third and fourth defendants’ circumstances are such that they do not know the case being made against them. While it is true that no specific reference was made in the first plaintiff’s personal injury summons to the respective Opinions on Compliance furnished on behalf of the third defendant and the fourth and fifth defendants in 2005 (on which the first plaintiff now relies), it remains the view of the Court that the absence of any reference to these documents in the first defendant’s pleadings does not substantially prejudice the defendants in circumstances where the amended personal injury summons sufficiently particularises the first plaintiff’s claim. Similarly, while I accept that the first plaintiff has failed to specify the provisions of the Building Regulations being relied on, and while I take account of this in weighing the balance of justice, in circumstances where both the third and fourth defendants are professionals and well acquainted with the Building Regulations, I do not perceive that the third and fourth defendants are greatly prejudiced by this failure. I also accept the plaintiffs’ counsel’s submission that the claims involve an alleged absence of insulation and damp proof membrane, a matter that remains capable of being ascertained, even at this remove. Thus, I do not perceive that, in this regard, justice has been put to the hazard by the passage of time.
77. Counsel for the third defendant submits that the first plaintiff could have issued proceedings against the third defendant (and the fourth and fifth defendants) earlier that she did in circumstances where she had export reports available to her from 2008.
78. Counsel for the fourth defendant points to the fact that that the first plaintiff was clearly aware of alleged defects in her apartment shortly after November 2005, yet she also took no action in respect of the fourth and fifth defendants until 2010 when she sought to join them as defendants consequent to the first defendant’s third party application. It is submitted that, more significantly, no step has been taken in her proceedings since the fourth and fifth defendants delivered their personal injuries defence on 13th July, 2012.
79. It is the case that between July 2012 and the issuing of the fourth and fifth defendants’ motion to dismiss on 23rd June, 2016, the only activity on the part of the first plaintiff was a belated response (together with an amended request for voluntary discovery) of 14th February, 2014 from the first plaintiff’s former solicitors to the fourth and fifth defendants’ letter of 13th July, 2012 which was sent in response to the first plaintiff’s request in 2012 for voluntary discovery. It is also the case that the first plaintiff sought voluntary discovery from the third defendant on 6th March, 2012. However, no motion for discovery has ever been issued as against either the third or fourth defendants. It is now submitted on the first plaintiff’s behalf that if permitted to continue with her case she will submit to a strict timetable.
80. I accept that I must take into account, in the requisite weighing exercise which the Court has engaged in, that the expert reports which the first plaintiff had from Herr Engineering from as early as 2008 suggests that she could have sought to join the third, fourth and fifth defendants earlier that she did. I do not believe, however, that this should be the predominant factor in the Court’s decision.
81. The fourth defendant contends that the plaintiffs’ claims equate to an action in professional negligence which has resulted in increased annual insurance premiums. Thus, it is argued that the delay has impacted on the fourth defendant’s business and reputation.
82. The impact of inordinate and inexcusable delay in prosecuting an action for professional negligence was discussed inCeltic Ceramics Limited v. IDA[1993] ILRM 248. O’Hanlon J. stated: at p. 258
“It seems very unfair and unjust that persons whose professional standing and competence are under attack should be left with litigation hanging over their heads for years by reason of inordinate and inexcusable delay on the part of a plaintiff and I would respectfully echo the view expressed by Henchy J. in Sheehan v Amond that it should be possible to invoke ‘implied constitutional principles of basic fairness of procedures’ to bring about the termination of such proceedings.”
83. InFarrell v. Arborlane Limited,Sheehan J.opined:
“33. Another matter that arises is the level of prejudice suffered by the appellant. Like the trial judge I do not attach any weight to the suggestion by the appellant that he may suffer prejudice as a result of being unable to obtain the necessary documentation to defend these proceedings. With regard to prejudice I hold however, that prejudice is suffered by the appellant by having an allegation of professional negligence hanging over him for this length of time. I further hold that he has established additional prejudice as a result of the fact that he has encountered difficulties with his insurance company when renewing his professional indemnity insurance. I am satisfied that these two matters of themselves are sufficient in a case of this length of delay to establish the required prejudice.”
84. It is also submitted that the fourth and fifth defendants are entitled to their good name which entails that the proceedings be adjudicated on within a reasonable time, as recognised by Irvine J. inGorman v. Minister for Justice[2015] IECA 41:
“30. In recent times, the constitutional imperative to bring to an end a culture of delay in litigation so as to ensure the effective administration of justice and basic fairness of procedures, has been emphasised in a number of judgments dealing with delay. The relevant constitutional provisions are contained in Article 34.1, which requires the courts to administer justice and Article 40.3.2 which guarantees the citizen the right to protect their good name.
31. These specific constitutional obligations pre-suppose that litigation will be conducted in a timely fashion. If, as Henchy J. stated in O’Domhnaill, justice is put to the hazard as a result of undue and excessive delay, how then can the courts fulfil their constitutional mandate under Article 34.1? Moreover, where, as in the present case, the right to a good name of a number of members of An Garda Síochána, has been put at issue by the plaintiff, the effective protection of that right as guaranteed by Article 40.3.2 requires that such claims be adjudicated upon within a reasonable time.”
85. Similar views were expressed by Irvine J. inCollins v. Minister for Justice, Equality & law Reform[2015] IECA 27.
86. It is however of note that the fourth defendant has not said that he has been unable to secure insurance cover. Accordingly, I do not believe that prejudice to the extent set out inFarrell v. Arborlanehas been demonstrated in the present case. Accordingly, I attach modest weight to the issue of the increased insurance premiums.
87. Counsel for the fourth and fifth defendants also submits that it is unfair to expect witnesses to recall events which are alleged to have occurred more than twelve years ago, a factor commented on by Hardiman J. inJ’OC v. DPP[2000] 3 I.R. 478: at p. 499
“…a lengthy lapse of time between an event giving rise to litigation, and a trial creates a risk of injustice…”
88. InGilroy v. Flynn[2005] ILRM 290, Hardiman J. opined: at pp. 293-294
“[T]he courts have become ever more conscious of the unfairness and increased possibility of injustice which attach to allowing an action which depends on witness testimony to proceed a considerable time after the cause of action accrued.”
89. It is further submitted on the defendants’ behalf that it is to be presumed that the physical state of the first plaintiff’s property has changed due to a number of tests carried out in the intervening years along with attempts made to remedy the alleged defects. The defendants say that their concern in this regard is against a background where they deny that an invitation to observe such tests was ever issued by the first plaintiff’s former solicitors.
90. The third defendant’s principal submission is that the third defendant has been placed in a position where very specific prejudice has arisen because of the death of Mr. Graham Elmes, who had responsibility for acting in connection with the building project on behalf of the third defendant. While it is acknowledged that other directors and employees can give evidence the third defendant’s position is that they were not the persons dealing with the project on the ground and therefore they are not familiar with it. Accordingly, the third defendant contends that this is a particular difficulty, not least because of the diffuse character of the allegations being made against the defendants and the failure to specify the case being made against the third defendant.
91. It is thus submitted that the death of Mr. Elmes presents significant prejudice for the third defendant. While it was not he who certified the building in 2005, he was the person most closely associated with the project. As averred to by Mr. Burroughs, Mr. Sweetman, who signed the certificate, has no recollection of the matter. Counsel again contends that it is no answer to the third defendant’s concerns that the buildings remain available for inspection.
92. The third defendant’s position is not that they cannot defend the claims made against them. Rather, the third defendant’s argument is that the claims are more difficult to defend given the death of Mr. Elmes who had a central role for the third defendant in the project. Contrary to the plaintiffs’ submissions, it is not the case that the third defendant has not been prejudiced. No one can speak for the late Mr. Elmes; only he could have said what the Certificate of Compliance furnished in 2005 related to.
93. Thus, the third defendant’s position is that the reliance placed by the first and second plaintiffs on Mr. Sweetman’s role is not a sufficient response to the prejudice alleged by the third defendant. The reality is that such other witnesses as may be called by the third defendant will be less well-versed in the matter. This is not just regarding matters of contention between the plaintiffs and the third defendant. It is contended that not only is the third defendant, who has lost the witness with the most connection to the project, faced with the first and second plaintiffs’ claims, there is also the issues of contribution which may arise between the defendants.
94. It is further submitted that even if the late Mr. Elmes were still here, it would be difficult for the third defendant to defend the cases as the first plaintiff’s current case may be entirely different to the situation on the ground in 2005.
95. In a similar vein, counsel for the fourth defendant contends that the death of Mr. Elmes has resulted in the loss of a key witness as to the issues of fact between the third and fourth defendants.
96. It is submitted on the plaintiffs’ behalf that insofar as the third defendant places emphasis on the death of Mr. Elmes, in the particular circumstances of these cases that factor is not sufficient to weigh the balance of justice in the defendants’ favour. This is so where the case has not been made that the third defendant cannot defend the claims in the absence of Mr. Elmes.
97. InAnglo Irish Beef Processors Limited v. Montgomery[2002] 3 IR 510 Keane C.J. had the following to say where prejudice was asserted on the basis that a witness was dead:
“If those were the only factors to be considered, they would suggest, in my view, that contrary to what the trial judge concluded, the balance of justice was in favour of striking out the proceedings. There is, however, another factor to which, in my view, the trial judge, although conscious of it, unarguably gave insufficient weight, i.e., the fact that Mr. Devine is now dead and will be unable to confirm the defendants’ understanding of the advice being tendered to them by Mr. Collins as to the nature and effect of clause 8 of the agreement.
That evidence was critical to the defendants in maintaining their claim for an indemnity or contribution from the third party. Since, in accordance with the requirements of the Civil Liability Act, 1961 and the relevant provisions of the Rules of the Superior Courts, 1986, all these issues would be tried together, it follows inevitably that, in relation to an issue of central importance, i.e., whether, assuming the plaintiffs’ claim is well founded, the defendants are entitled to contribution or an indemnity from the third party, the defendants will be deprived of a witness of critical importance as a result of the inordinate and inexcusable delay on the part of the plaintiffs in prosecuting the claim.” (at p. 515)
98. InLeech v. Independent Newspapers (Ireland) Limited[2017] IECA 8, Irvine J. considered the issue in the following terms:
“ 45…That being so the High Court judge was required to have regard to any prejudice which the newspaper was in a position to establish would likely arise by reason of the delay. While it was, in my view, open to the trial judge to attach modest or moderate weight to the specific prejudice sought to be relied upon by the defendant, I am satisfied that he erred in law when he effectively rejected it. First on the basis that the claim of prejudice alleged to flow from Mr. Fanning’s death had been belatedly made and could in any event be satisfactorily overcome by calling other witnesses and second by reference to the manner in which it was advanced. Further, I consider that he unfairly and incorrectly categorised the newspaper’s evidence concerning prejudice as being no more than a solicitor’s opinion that prejudice was inevitable.
…
47. It is true that if the newspaper thought it could not possibly defend the action because of Mr. Fanning’s death it would probably have brought a motion to strike out the action on that basis. But that was not the case it sought to advance on the present application. It did not claim that it could not defend the action without Mr. Fanning or that his death alone warranted the dismissal of the proceedings. What it asserted was that it was less well placed to defend the action because of his death with the result that the Court should have regard to that prejudice as part of the overall circumstances when considering the balance of justice. Thus, I am satisfied that the trial judge erred in law when he relied upon the failure of the newspaper to bring a motion to dismiss the proceedings following Mr. Fanning’s death as a reason to discount the prejudice alleged by the newspaper when considering the issue of the balance of justice.
…
49. To my mind, it does not follow, as is to be inferred from the judgment of the trial judge that merely because the newspaper could call a different witness to give evidence concerning these matters that it would not have been in a stronger position to defend the claim if its editor was available to give evidence on its behalf. In libel actions against newspapers, the evidence of the editor is often considered critical to the defence of the action and their unavailability to give evidence due to delay on the part of a plaintiff in prosecuting their claim has on many occasions provided the basis for an application on the part of the newspaper to have proceedings dismissed.”
99. Undoubtedly, the death of Mr. Elmes is a factor to which the Court must attach a considerable amount of weight. The question is however whether his death renders the third defendantsubstantiallyless well placed to defend the plaintiffs’ proceedings and to deal with such issues of fact as may arise as between the third defendant and the fourth defendant.
100. To my mind a factor which the Court must also weigh in this regard is that it was not the late Mr. Elmes who duly certified the plaintiffs’ respective apartments on 4th November, 2005. In both cases, that task fell to Mr. Sweetman, Chartered Engineer with the third defendant. It seems to me therefore that prejudice, which, the Court accepts, enures to the third defendant by reason of the death of Mr. Elmes is tempered by the fact that another engineer in the third defendant’s firm was the person who in fact certified compliance with the requisite building and planning regulations. Albeit that it was the late Mr. Elmes who was the person in the third defendant’s firm most associated with the apartment project, it is undisputed that it was Mr. Sweetman who duly certified the apartments on the third defendant’s behalf. I am satisfied that this certification process could not have been done in a vacuum and that Mr. Sweetman must have had access to documents, plans and files in order to do so. Presumably, those same documents, plans and files remain available to him to assist with any deficit of recollection he may have due to the passage of time.
101. In all the circumstances, I am not persuaded that the late Mr. Elmes’ demise can be considered as squarely tipping the balance of justice in favour of the third defendant, as far as the first plaintiff is concerned. I also take into account that insofar as the pleadings in the Kilroy proceedings disclose, much of the evidence on the liability side will most likely be expert evidence; therefore I attach only moderate weight to the defendants’ submissions on the issue of frailty of recollection of witnesses.
102. Notwithstanding that counsel for the fourth defendant labelled the plaintiffs’ criticism of the defendants’ failure to bring motions before 2016 “an extraordinary proposition” , I give modest weight to the fact that the motions to dismiss could have been brought by the defendants earlier than 2016, i.e. at any time after 2012. I accept, however, there is no equality of inactivity here. By and large, the third and fourth defendants’ conduct cannot be called into question. There is no basis for any suggestion that the plaintiffs were lured into a false sense of security. This is evident from the correspondence sent both to the first plaintiff’s former and present solicitors, as referred to in Mr. Burrough’s affidavits.
103. In summary, the Court accepts that a level of prejudice arises for the third and fourth defendants arising from the manner in which the first plaintiff’s case has been progressed. The Court, however, must also give weight to the nature of the proceedings and to the first plaintiff’s claim (yet to be substantiated) that the home she bought in 2005 has been beset with problems arising from a lack of insulation. Having weighed all relevant factors, including that the first plaintiff, from an early stage, endeavoured to seek to rectify the defects in her apartment (including liaising with the first defendant and engaging experts from a relatively stage), and while accepting that the delay since 2012 is inordinate and for the most part inexcusable (the Court however does attach some weight to the fact of the first plaintiff’s illness over a period of almost twelve months), it seems to me that the balance of justice is best served by letting the first plaintiff continue with her proceedings against the third and fourth defendants, subject however to the first plaintiff’s undertaking to move with expedition and to adhere to a strict timetable regarding outstanding replies to particulars and discovery issues.
104. I turn now to the second plaintiff’s proceedings.
105. As of yet no statement of claim has been delivered by the second plaintiff in respect of proceedings which issued only at a very late stage, namely on 17th November, 2011.
106. It is submitted by the third and fourth defendants that given the very late stage at which the second plaintiff’s proceedings issued, their service on the third and fourth defendants almost a year later, together with the fact that the pleadings rest there, no statement of claim having been delivered, gives rise to prejudice for the third and fourth defendants.
107. In the first instance, I accept the submission that there was a heavy onus on the second plaintiff to expedite the hearing of his action given that he is bringing proceedings after a lengthy period of time since the accrual of his cause of action.
108. Counsel for the plaintiff accepts that it is the case that the second plaintiff allowed the first plaintiff to progress her proceedings and that he did not advance his own. Counsel thus agrees that the second plaintiff’s delay is inordinate and inexcusable. He submits however that if the Court is not minded to dismiss the first plaintiff’s proceedings, then the second plaintiff’s proceedings should also be allowed to proceed since it cannot be said that the defendants are unaware of the nature of the case he intends to make.
109. Compared with the first plaintiff, who issued her proceedings against the first defendant in 2009, the second plaintiff delayed considerably in instituting his proceedings. Delay in the commencement of proceedings was considered by Finlay Geoghegan J. inManning v. Benson & Hedges Limited[2004] 3 IR 556. She stated; at p.564
“The courts should not ignore the fact that the alleged wrongful acts took place a long time ago. At minimum where there is a long lapse of time between wrongful acts and accrual of a cause of action it may mean that the claim is already difficult for the defendant to deal with and prejudice caused by subsequent delay may have to be more critically examined. Also, such a long lapse of time places a special onus on a plaintiff to proceed with due expedition after the accrual of the cause of action.”
110. InCollins v. Minister for Justice, Equality & Law Reform. Irvine J. stated:
“ Where a plaintiff waits until relatively close the end of the limitation period prior to issuing proceedings … they are then under a special obligation to proceed with expedition once the proceedings have commenced”.(at para. 33).
Moreover, the Court of Appeal has endorsed a proposition that where a plaintiff is guilty of culpable delay, a defendant does not have to establish prejudice to the point that it faces a significant risk of an unfair trial. Rather, once a defendant establishes inordinate and inexcusable delay, it can urge the Court to dismiss the proceedings having regard to a whole range of factors, including relatively modest prejudice arising from that delay, as is clear from principle 8 of the principles adopted by Irvine J. inFlynn v. Minister for Justice:
“8. In culpable delay cases the defendant does not have to establish prejudice to the point that it faces a significant risk of an unfair trial. Once a defendant establishes inordinate and inexcusable delay, it can urge the court to dismiss the proceedings having regard to a whole range of factors, including relatively modest prejudice arising from that delay.”
111. InLeech v. Independent Newspapers, Irvine J. again opined:
“45. Once there has been a finding of inordinate and inexcusable delay even modest prejudice may tip the scales of justice in favour of a defendant when it comes to a consideration of the balance of justice. (See Stephens v. Paul Flynn Limited).”
112. In all the circumstances of this case, I am not persuaded by the second plaintiff’s submission that if the first plaintiff’s case is allowed to continue so then so should his. I am satisfied that by allowing the second plaintiff to progress his case would cause the third and fourth defendants prejudice, if only by dint of their having to now face into the processes which advancing his case would necessitate. This indeed may be modest prejudice but, to my mind, it is sufficient to weigh the balance of justice in the defendants’ favour in the face of the second defendant’s culpable delay, particularly his failure to deliver a statement of claim.
Summary
113. For the reasons set out herein, the reliefs claimed by the third and fourth defendants in the Kilroy proceedings are denied; the reliefs claimed by the third and fourth defendants in the Gray proceedings are hereby granted.
Irish Permanent Building Society v Cornelius O’Sullivan and Dymphna Collins
High Court (Circuit Appeal)
10 October 1989
[1990] I.L.R.M. 598
(ex tempore) (Blayney J)
10 October 1989
Subject: Negligence
Keywords: Advice; Agency; Auctioneers; Building societies; Duty of care
Negligence—Duty of care—Building society—Agency—Negligent advice—Building society agent acted as an auctioneer—Liability of building society in respect of agent acting as an auctioneer
Facts
The defendants applied to the plaintiff’s agent at Killarney, Sean Coyne, for a mortgage to purchase a house. Sean Coyne also operates as an auctioneer in Killarney, and carries out his auctioneering business and his agency for the plaintiff from the same office and using the same staff. Both the plaintiff society and Sean Coyne’s auctioneering business are advertised outside Sean Coyne’s office and on his note-paper.
The defendants were informed by Sean Coyne that the plaintiff would grant them a mortgage to purchase a house, and further informed them that he was in a position to sell them a house.
Sean Coyne recommended a house at Coolick, Killarney, to the defendants, and told the defendants that this house was in good condition and that all that was required to be done to it was wallpapering and painting.
Subsequently, the defendants purchased the said house at Coolick for the sum of £18,100, with the aid of a loan from the plaintiff building society in the sum of £17,100, which was secured by way of a mortgage on the house at Coolick.
The house at Coolick was later discovered to have defects which prevented the defendants from living in the house for any long period, and eventually, the defendants vacated the house completely. Prior to vacating the house, the defendants spent a considerable sum of money in renovating the house, but were unable to fully repair it.
The defendants fell behind in their mortgage re-payments to the plaintiff, and on 28 September 1987, the plaintiff issued an ejectment civil bill in the Circuit Court, seeking recovery of possession of the premises at Coolick. On 28 September 1987, the defendants entered a defence to the plaintiff’s claim and also counterclaimed for damages for, inter alia, negligence and breach of duty.
In the Circuit Court at Killarney, Judge Kevin O’Higgins granted the plaintiff possession of the house at Coolick. However, the defendants were successful in their counterclaim, and Judge O’Higgins awarded the defendants a decree in the sum of £10,973. The plaintiff appealed to the High Court on Circuit at Tralee.
Held, by Blayney J in disallowing the plaintiff’s appeal and in varying the award of the Circuit Court by entering a decree for the defendants in the sum of £12,991 with liberty to execute for £8,473.
(1) Whereas the house at Coolick was not structurally defective, it was in a bad condition and was in need of repair; *599
(2) Sean Coyne was negligent in recommending the house at Coolick to a young couple as their first house and in advising the defendants that the house was in good repair and only in need of wallpapering and painting;
(3) Whereas Sean Coyne was selling the house to the defendants as an auctioneer, the defendants thought that he was acting in his capacity as manager of the plaintiff society in selling the house;
(4) The plaintiff building society knew that Sean Coyne was acting as their agent and carrying out his auctioneering business from the same office and the plaintiff knew that Sean Coyne was carrying on these two roles at the same time, and thereby allowed the defendants to believe that Sean Coyne was acting on behalf of the plaintiff when selling the house at Coolick, and, as a result, the plaintiff society owed a duty of care to the defendants to ensure that they were properly advised about the condition of the house at Coolick;
(5) The plaintiff was in breach of this duty of care owed to the defendants and was liable for the negligent advice given by Sean Coyne to the defendants in relation to the condition of the house at Coolick.
No cases referred to in judgment
Representation
Anthony Kennedy SC and Michael F. Collins for the plaintiff
Henry Downing for the defendants
BLAYNEY J
delivered his judgment on 10 October 1989 saying: The case has been very fully presented. The facts in it are very special. There is no great conflict of evidence. The defendants are a young married couple who are counterclaiming for damages for negligence.
They went into the office of the plaintiff building society in Killarney which was managed by Mr Sean Coyne who carried on an auctioneering business from the same office. They wanted to buy a house and they told Mr Coyne that they needed a loan. Mr Coyne told them to open an account with the plaintiff building society and to transfer money into that account from their bank account with Allied Irish Banks and to save money in that account.
The defendants duly saved with the plaintiff building society and were later informed by Mr Coyne that they would now qualify for a loan from the society.
The defendants did not know much about the situation regarding buying houses but they did know that the plaintiff building society gave loans for the purpose of purchasing houses. It was perfectly reasonable for the defendants to think that Mr Coyne was acting for the plaintiff building society when he was selling them a house. Mr Coyne told the defendants that he was selling a house on behalf of a Mrs Teahan. The plaintiff building society knew that while Mr Coyne was acting as their agent in Killarney, at the same time, he was also acting as an auctioneer selling houses to members of the public.
The defendants looked at Mrs Teahan’s house. Mr Coyne informed them that *600 the house was in good condition and that all that it needed was wallpapering and painting. The defendants relied on what Mr Coyne told them about the house and, on that basis, they purchased the house for the sum of £18,100. The defendants paid a deposit of £1,000 and their mortgage from the plaintiff building society was for £17,100.
In June 1984 the defendants got married and started to decorate the house. When painting the house, however, the mortar came away with the old paper. This was the first sign that the defendants had that things were not right with the house. The defendants agree that the house is structurally sound, and that it was at least 100 years old. A house of that age is going to need some repair.
Mr Coyne was negligent in recommending this house to a young couple as their first house. He was selling the house as an auctioneer, but the defendants saw him as the manager of the plaintiff building society. Mr Coyne only saw the house once when he was brought out to it by Mrs Teahan, but he did not carry out any detailed inspection of it. He nevertheless told the defendants that the house was in good repair, needing only wallpapering and painting. He told them this on the basis of a short visit to the house.
The defendants went to the plaintiff building society’s office to be advised by Mr Coyne. They saw him only as the manager of the plaintiff building society. Mr Coyne was at that time the agent appointed by the society. The plaintiff building society knew that Mr Coyne was carrying on an auctioneering business in the same office. They knew that he would be carrying on these two roles at the same time so that persons dealing with him could think that they were dealing with the building society. Because the plaintiff building society allowed Mr Coyne to operate in this manner on their behalf, they ought to have anticipated that members of the public might conclude that Mr Coyne was their agent in selling houses and might suffer loss through acting on that belief. They were under a duty therefore to ensure that it was made clear to members of the public that, in selling houses, Mr Coyne was not acting as their agent, but was acting as a principal. The plaintiff building society failed to discharge this duty and the defendant suffered damage as a result. It was because of their belief that Mr Coyne was the agent of the plaintiff building society that they relied on his representations about the house. The plaintiff building society is accordingly liable in damages to the defendants.
The order of the Circuit Court is to be varied to the extent that the defendants are entitled to a decree in the sum of £12,991, but, because an allowance must be made for the amount of arrears owing by the defendants to the plaintiff, the defendants are to have liberty to execute for the sum of £8,473 only.
Howard v Dublin Corporation
[1996] 2 IR 235
Eamonn Howard, Ann Howard and Jonathan Howard (a minor suing by his father and next friend Eamonn Howard) Plaintiffs v. The Right Honourable the Lord Mayor, Aldermen and Burgesses of Dublin Defendant
Lavan J.
31st July 1996
The plaintiffs herein reside in Tallaght at a dwelling provided by the defendant in its capacity as housing authority. These proceedings relate to the circumstances surrounding the installation of a new heating unit known as the ‘conserva heater’ in this residence of the plaintiffs. The installation of the conserva took place in or about the year 1979. Unfortunately for the plaintiffs the conserva proved to be most unsatisfactory in a number of respects giving off smoke and smuts and giving rise to “blow backs”. The saga of the installation of such conservas in local authority housing has been the subject of much litigation and has been considered in great detail by the Supreme Court in Burke (a minor) v. Dublin Corporation [1991] 1 I.R. 341. The current proceedings initially came before me (on the 8th and 9th November, 1994) on the basis that the defendants herein had, as housing authority, installed the said heating unit in the plaintiffs’ residence, and were framed in negligence, breach of contract and breach of statutory duty. However, it was agreed by the parties at that hearing that the court should first decide the following question:
“Did the defendants their servants or agents or someone acting on their behalf install defective heating units in the plaintiffs’ dwelling?”
I determined this preliminary issue in the negative, delivering judgmentex tempore on the 10th November, 1994, holding as follows:
“I accept that [the defendants’] evidence and I accept the exhibits produced in court as establishing on the balance of probabilities that Mr. and Mrs. Howard made the application as purchasers and received the grant and loan which they caused to be paid to a Mr. Higgins, an independent building contractor.”
Thus, this case is distinguishable from the facts of Burke (a minor) v. Dublin Corporation [1991] 1 I.R. 341, in that the plaintiffs themselveswere responsible for the actual installation of the defective heating system by an independent building contractor, albeit with the benefit of a loan from the defendants as housing authority. The instant case differs also in that the first and second plaintiffs herein are tenant-purchasers by virtue of a transfer in or about January, 1976, from the defendants pursuant to the Housing Act, 1966, whereas in Burke certain of the plaintiffs were mere tenants, and tenant-purchasers had obtained a transfer subsequent to the installation of the defective heating system. In view of the unfavourable outcome, from their viewpoint, on the preliminary issue, the plaintiffs now seek to found their case solely on negligence relying, in particular, on the Supreme Court decision in Ward v. McMaster [1988] I.R. 337.
Duty of care
The plaintiffs argue that a duty of care arises on the part of the defendant by virtue of its making a loan to the plaintiffs with respect to the installation of the defective conserva: the plaintiffs, it is further submitted, lacked the means and resources to carry out independent tests and the aid of a statutory loan was sufficient to lead them to believe that their investment wore a badge of quality.
The correctness or otherwise of this submission must be measured against the judgment in Ward v. McMaster [1988] I.R. 337 at p. 342. There, the defendant housing authority was held to owe a duty of care to a purchaser qualifying for a loan under s. 39 of the Housing Act, 1966.
“. . . The consequences to the plaintiff of a failure on their part to value the house properly should have been anticipated by the Council in view of factors such as that, in order to qualify for the loan, the plaintiff had to show that he was unable to obtain the loan from a commercial agency such as a bank or a building society and that his circumstances were such that he would otherwise need to be rehoused by the Council. A borrower of that degree of indigency could not have been reasonably expected to incur the further expense of getting a structural survey of the house done . . .”
The plaintiffs submit that this reasoning applies equally to a person obtaining a loan under s. 40 of the Housing Act, 1966, for the repair and improvement of houses. Section 40 (which has since been repealed by the Housing (Miscellaneous Provisions) Act, 1979), provided as follows:
“(1) A housing authority may, subject to such conditions as may be approved by the Minister, make a loan to a person (in this section referred to as the borrower) carrying out reconstruction, repair or improvement works on a house, provided that the authority is satisfied that: ”
(a) after the proposed works are carried out, the house will be fit for human habitation,
(b) the proposed works are necessary for the purpose of providing suitable housing accommodation, and
(c) the house is suitable for reconstruction, repair or improvement, as the case may be.”
I accept the plaintiffs’ submission as to the existence of such a duty of care as being correct. It seems to me that the principles stated in Ward v. McMaster [1988] I.R. 337 are applicable to s. 40 loans. The defendants would be in breach of its statutory duty under s. 40, sub-s. 1 (a) were they to make loans which rendered houses unfit for human habitation by the installation of a seriously defective heating system. Breach of this public law duty could give rise to a private law action in negligence in circumstances where a relationship of proximity exists. Just such a relationship of proximity exists here given the specific objectives of the Housing Acts and the straitened circumstances of the legislation’s beneficiaries. As stated by Finlay C.J. in Burke (a minor) v. Dublin Corporation [1991] 1 I.R. 341 at p. 349:
“The duty of a housing authority under the Act of 1966, as is pointed out in Siney v. Corporation of Dublin [1980] I.R. 400, is to provide suitable and fit accommodation either for those who have got no accommodation or for those who are living in sub-standard or inadequate accommodation and who have not got the capacity out of their own resources to provide fit and proper accommodation for themselves.”
To recognise the existence of such a duty is not, however, to say that it has been breached.=
Breach of duty of care?
It is a requirement of the plaintiffs’ case that the duty of care identified above be shown to have been breached. In Ward v. McMaster [1988] I.R. 337 there was a want of due care on the part of the defendant local authority in failing to have a proper valuation carried out by a person competent to do so. The plaintiffs herein have failed to establish any such breach of the defendant’s duty of care. It has been held by Blayney J. in the High Court and accepted by the Supreme Court that Dublin Corporation were not negligent in their initial installation of the conserva heaters: in Burke (a minor) v. Dublin Corporation [1990] 1 I.R. 18, Blayney J. held at p. 32 that:
“Could the defendant reasonably have foreseen that its choice of the conserva would be likely to injure any of the occupants of its houses in Tallaght? In my opinion there is no evidence that it could reasonably have foreseen this. It was not suggested that there was anything in the report of the Institute for Industrial Research and Standards or in the demonstration of the conserva in Cork, or in the pilot period during which two conservas were installed in houses in Tallaght which would have led it to foresee the possibility of injury.”
In the instant case, the standard for breach may be somewhat lower, for the test is whether the defendants were negligent in making the s. 40 loan and not if they were negligent in the direct choice of, and actual installation of, the heating system. On either standard, the plaintiffs have not established a breach of the duty of care in the making of the loan.
Continuing duty of care?
This concludes the issue of liability under the principles of Ward v. McMaster [1988] I.R. 337. However, it is clear from the judgment of Finlay C.J. in Burke (a minor) v. Dublin Corporation [1991] 1 I.R. 341, that in circumstances where the original installation was not negligent, a housing authority may nevertheless be in breach of a continuing duty of care as regards its premises being fit for human habitation if subsequently the fact of unfitness is established or ought to have been discovered. This finding appears to be based on the status of a plaintiff as tenant under a letting agreement. In the instant case, the first and second plaintiffs are tenant-purchasers. The Supreme Court further held in Burke that the implied warranty as to fitness arising under the Housing Act, 1966, applies as equally to transfers under that Act, as to lettings, and accordingly displaces the rule of caveat emptor. The position may be summarised as follows:
(a) A tenant under a letting agreement enjoys the benefit of an implied warranty of fitness for human habitation;
(b) A tenant-purchaser is entitled to the same implied warranty with respect to a transfer under s. 90;
(c) A resident not party to the letting agreement may nevertheless have a claim in negligence for breach of a duty which continues for the currency of the letting agreement.
The duty in the instant case is tenuous: a duty to take care with respect to such representation as to approval of the heating system as may be implicit in the making of a s. 40 loan. It has not been established that the defendant was negligent in this regard. Nor is the plaintiffs’ claim stateable on other grounds: I find the implied warranty identified in Burke (a minor) v. Dublin Corporation [1991] 1 I.R. 341 to be inapplicable to the facts of this case: here, the first and second plaintiffs themselves installed the heating system after the transfer. The making of a loan is at a clear remove from the transfer of a house with the defective system already installed. A plaintiff’s status as tenant-purchaser must shift the balance of the relationship between him and the housing authority and the duties of the latter are relaxed accordingly. Such warranty as to fitness for human habitation as existed at the time of the transfer must be regarded as spent by the time of the installation. In the absence of negligence on the housing authority’s part, no breach of duty is established. Nor is there a continuing duty (as in the case of a letting agreement), breach of which can give rise to liability in negligence, because of the status of the plaintiffs as tenant-purchasers.
The plaintiffs’ claim is therefore dismissed.
Felloni v Dublin Corporation
Regina Felloni v The Mayor, Aldermen and Burgesses of the City of Dublin
1993 No. 6642P
High Court
16 November 1996
[1998] 1 I.L.R.M. 133
(ex tempore) (Morris J)
MORRIS J
delivered his judgment on 19 November 1996 saying: In this case the plaintiff’s claim can be summarised as follows. She said she resided with her aunt at her aunt’s premises which is a flat and she said that it became necessary for her because of the defect in the door to go about the closing of the door behind her by putting her fingers around the edge of the door, giving it a sharp pull and allowing it to slam in the hope that she would have got her fingers out of the way in time in order to avoid an accident, but she says on 20 February 1991 when she was 15 years of age, she was sent on a message by her aunt. She tried to perform this manoeuvre but unfortunately her timing was wrong with the result that she lost the tip of the finger on her left hand which is shown in the photographs that have been submitted and particularly in photograph No. 4.
Now, the basis upon which the claim is put on behalf of the plaintiff is as follows. It is said that the corporation as the housing authority under the Housing Act 1966 is fixed with the obligation of providing the tenant with a house that is reasonably fit for human habitation and because of the failure on the part of the corporation to provide the house with a handle with which the tenant and their licensees could close the door with safety this rendered the premises unfit for human habitation and it is put further on the basis that the corporation had an additional obligation to keep the premises in a reasonable state of repair and *135 since it had an obligation to carry out repairs of which it was aware it had an obligation to respond to the notification of this defect by attending at the premises and carrying out such repairs as were necessary, in particular in putting a handle on the door.
First of all, I am satisfied that at the time when the flat was handed over to the corporation this defect which has now been described was not present and that seemed to be manifested by the fact that there exists on the door of the premises as shown in the photographs produced by the corporation the remains of what was obviously a knocker and it would appear to make sense to me that the corporation, when it originally delivered up this apartment to the tenant would have provided it with the ordinary door furniture, which can take the form of a Yale lock, a letter box and some form of door knocker, which would also act as a pull in order to allow somebody leaving to pull the door shut behind them, and therefore, I am satisfied from this photograph that has been produced by the corporation that that was the condition of the flat originally but with the passage of time and I dare say use, that knocker became defective and it became necessary for Mrs Carroll and her invitees to close the door as she describes by using her key as a pulling mechanism.
Now, I am satisfied also that there would be an obligation on the part of the corporation if it became aware of the fact that there was a defect in the door which made it necessary for the tenant and their invitees to expose themselves to the risk of injury. There was an obligation on the corporation to attend to such a defect. However, I am not satisfied that the corporation was ever made aware of any such defect and I believe that this arises because of the fact Mrs Carroll did not see it herself as anything in the nature of a problem. I accept with some reservation part of her evidence but accept the evidence of the way that she said that at one stage she got a friend of hers and a nearby neighbour to put a bolt on this door and I feel that if she had seen it as desirable or necessary in the interest of safety to have a knob on the door she would either have got in touch with the corporation or indeed with her neighbour or some friend and asked them to put a knob on the door. I am not satisfied that she ever saw it as a problem herself. I am not satisfied she ever notified the corporation, and therefore I find no evidence of negligence on the part of the corporation in delivering the flat which was fit for human habitation in the first instance, nor do I find any evidence of negligence in that it failed to respond to a legitimate complaint made in respect of the door. I want to go further in this case; I want to say this, even if I were to find that there was negligence on the part of the corporation and a failure to comply with its obligations under the Housing Act 1966, I believe that that negligence would be overwhelmed and overtaken by the negligence on the part of Mrs Carroll and on the part of the plaintiff in this case in allowing the state of affairs to continue whereby presumably a number of times a day they would voluntarily expose themselves to what must have been a risk of injury in the *136 slamming of the door when the remedy was available to them at little or no expense, to remedy the problem by fixing some sort of handle onto the door at minimal expense. I am satisfied on the authority of Crowley v. A.I.B. [1987] IR 382; [1988] ILRM 225 and on Conole v. Redbank Oyster Co. [1976] IR 191 that whatever negligence there was on the corporation if there was any, in failing to make this door safe, that negligence was overwhelmed and overtaken by the continued negligence on the part of the plaintiff herself who was at that time 15 years of age, and if I may say so, a young lady of the world, and on the part of the tenant, Mrs Carroll and her husband in failing to bring about the remedy that was readily available to them and accordingly for all of these reasons, in my view the plaintiff’s case fails.
Sunderland v. McGreavey
[1987] IR 375
Lardner J. 375
H.C.
Lardner J.
24th July 1985
The plaintiffs, who are husband and wife, purchased for £27,000.00 their dwelling-house at Mooretown, Dromiskin, County Louth, in February, 1979, from the first defendant, Michael McGreavey, who was the builder, after having had it inspected by the second defendant, Fergus Flynn-Rogers, who is an architect and received from him a report on its condition. Louth County Council are joined as the third defendant because of a planning permission and a permission for retention given by them, as planning authority, in respect of this house. The plaintiffs’ principal allegations are firstly, that the dwellinghouse was built on a site, in a depression, where the level of the water-table was unusually high and close to the surface for much of the year and which was liable to flood, and secondly, that the type of drainage, by a septic tank, which was provided, was unsuitable and incapable, for the periods of the year, of functioning because of the level of the surrounding water-table and because of the absence of any provision for a soak-away. The claims against the first and second defendants are laid in breach of contract and negligence. And the claim against the third defendant is laid in negligence and breach of statutory duty.
The plaintiffs had previously lived with their children at a house in Blackrock near Dundalk. In 1978 and early 1979 they were looking for a new house further out in the country and on an afternoon in February, 1979, went with Mr. Matthews, an auctioneer, to view this house at Mooretown, Dromiskin, about five miles from Dundalk. It was a new house but had lain vacant for two years. They liked its appearance but noticed that the ceiling between the hall and the bathroom was bulging and was not right and there were marks of water on the wall of one livingroom and an electric radiator was operating in the sittingroom. The auctioneer told them that a waterpipe in the roof space had burst and caused some flooding which had affected the ceiling and wall. Mr. and Mrs. Sunderland decided to get an architect to inspect it. Shortly afterwards, probably on the following morning, Mr. and Mrs. Sunderland called at the second defendant’s office in Dundalk and asked him “to come out and look at the house as they were thinking of buying it”. Mr. Sunderland says he asked Mr. Flynn-Rogers to come out and do a survey of the house urgently that same day as he believed another party was interested in buying it and he asked for an immediate report. Mr. Flynn-Rogers says he was asked to inspect it and look at certain faults and defects which had come to Mr. Sunderland’s notice. There is a clear distinction between a survey and an inspection. A survey involves a much more detailed examination and a measurement of the fabric which could not be completed in a day. I find from the evidence that what Mr. Sunderland asked for was a visual inspection and a report to be prepared as quickly as possible. Mr. Flynn-Rogers agreed to do this and to provide a report, and, for an immediate inspection and report, said his fee would be £35.
The plaintiffs and Mr. Flynn-Rogers then drove to the house. The plaintiffs pointed out the defective ceiling and water marks on the wall and Mr. Flynn-Rogers went from room to room and into the attic and the roof space. He tested the floors by jumping, tapped the walls for soundness of plaster. He looked at the skirtings and windows and ceilings. He made what he described as “a walk through” visual inspection without making checks or inspections which interfered with the fabric, while the plaintiffs remained in the sittingroom. And as he went about he made a list of the matters which he thought the builder should attend to. These were matters which, he said, showed a certain carelessness by the builder. He thought the general appearance of the house was “ok” and that it looked impressive outside. Then he went outside and walked over the garden area which was uncultivated and covered with thick, rough herbage. The plaintiffs and Mr. Flynn-Rogers all thought the day was cold and dry. The weather had been very cold for some time and the ground was described as rock hard. There was no sign of water or of flooding. Mr. Flynn-Rogers said there was no sign of anything that alerted him to the presence of any serious difficulty. In particular, he disagreed with Dr. Bunni, the plaintiffs’ engineer, and attached no significance to the height of the ventilation vents in the walls of the house. The important thing was that they were below the floor-boards and ventilating. So long as they were positioned to do this, their particular height was otherwise “academic”. He thought from a visual appearance that the site was flat and that the general situation was alright. During the course of his inspection Mr. Flynn-Rogers identified the position of the septic tank. All he could see was a manhole and its top which was covered with grass. He said he would have expected the septic tank to have been constructed to a recognised standard but from an inspection he could not see if this was so or not. There was no sign of sewage. He looked into the septic tank through a small eight inch hole. So it was difficult to see clearly but he could discern water inside and was not disturbed by this. There was no other water around it and the ground was dry under foot. It was impossible to see whether there was a percolation area, which would be concealed underground. The purpose of looking at the septic tank was to see that there was one there. That was the architect’s only function. He could not establish whether it worked, except over a period of months and he presumed that it was effective and functioning.
As Mr. Flynn-Rogers inspected the property he used a pocket dictating machine to record the matters he wished to put in his report. These consisted of a list of small items which required the builder’s attention. None of them related to the matters in issue in this action. He said he saw nothing in the house which led him to require any part of the fabric to be opened up.
Afterwards, Mr. Flynn-Rogers returned to his office and his report was typed and handed later that day to Mr. Sunderland and has been proved in evidence. He says the plaintiffs asked him “if he would buy the house” and he replied “he had done the report and that was all he could do for them. But he would buy it if he liked it and the house was right.” He saw no reason why they should not buy it.
He was then asked whether he had checked that there had been compliance with the planning permission. He said his brief was to inspect the house, not to examine documents. In practice it was always the solicitor who asked him to check the planning permission and he was not asked to do so in respect of this house.
After receiving Mr. Flynn-Rogers’ report the plaintiffs decided to buy the property; they made arrangements for a mortgage, entered into a contract with the first defendant and the sale was closed in the month of July, 1979. They moved into the house before the end of that month.
From the beginning they noticed a feeling of damp about the house which led them to turn on the heating earlier than usual but nothing untoward occurred until late December when, following rain, the garden became flooded to a depth of five or six inches right round the house, front and back as well as each side. The flood extended to the road in front and to some extent along the side of the road, but it did not appear to affect the neighbouring house to the west. The flooding continued until the month of April at a more or less constant level and the plaintiffs were obliged to put down concrete blocks as stepping stones to the house and to the garage.
Shortly after the flooding occurred sewage from the septic tank manhole at the end of the garden began to escape into the garden and to float round the house. In the lavatory bowl in the house the water level rose and at times the lavatory could not be used. Water from the washing machine in the kitchen would not empty through the waste-pipe except over a long period and this was so slow at times that the washing machine could not be used.
As a result of flooding the back garden could not be cultivated and was left rough. In the house there was a constant smell of dampness in the rooms and wardrobes and clothes became damp if hung up; wallpaper tended to come away from the walls and black spots appeared. The plaintiffs at first tried to reduce the flooding by hiring a pump which pumped water to the edge of the garden, but having pumped for several hours and to some extent reduced the water it all flowed back round the house by the following morning. Then they called the fire brigade who came out and looked at the position and advised them that they could do nothing effective to help. Mr. Sunderland then opened a trench from the site of the septic tank across the end of the garden to a deep hole which he dug. He also constructed a second trench from the house to take off water which was not going down the surface water drains and to take off water which seems to have flooded from the waste-pipe. These measures did not make any considerable improvement. The trenches and hole filled with water and the flooding continued with smelly and stagnant water around the house. Following the end of the flooding in April, 1980, the plaintiffs had to carry out some redecoration inside the house and repaint parts of the outside.
In the following winter flooding recurred in December and continued in the early months of 1981. But it was less severe and Mr. Sunderland attributed this to the fact that a neighbour who owned land at the rear of the house and an approach running at the east side of the house excavated a long deep channel to the east which drew off some of the flood water. Flooding in the garden and around the house tended to continue in subsequent years though to a less serious degree as a result of the excavation conducted by Mr. Sunderland’s neighbour. The flooding which the plaintiffs described in December, 1979, and which continued into April, 1980, was clearly illustrated by photographs taken by Mr. James Callary in February, 1980, and proved in evidence. Apart from this flooding in 1980 and subsequent years the septic tank and lavatories would not function for much of the year when the flooding occurred.
Dr. Niall Bunni, a consulting engineer, then gave evidence that the house, as built, was on a site one to two feet lower than the site for which planning permission existed originally. He said the actual site of the house was lower than the surrounding area and it was obvious from the ordnance survey map that a drainage problem existed at this site. As a result of his tests and investigations he was satisfied that for several months of the year the water table was very close to the surface of the site and even in the summer and autumn was never far below the surface. This, together with the fact that the site was in a depression, resulted in flooding whenever a certain amount of normal rainfall occurred. The position could only be remedied in his view by constructing a drain, a substantial drain, to the river Fane which was several hundred yards distant. Such a drain would need to cross the lands of two or three intervening landowners, one of whom would not consent to its construction.
Dr. Bunni expressed the view that the liability of this area to flooding or at least warning signs that it was liable to flooding should have been apparent to Louth County Council and that before giving permission for retention of this house they should have prepared a contour map of the immediate area, investigated the level of the water table and conducted percolation tests. Further Dr. Bunni asserted that in default of a drain to the river Fane no drainage depending on a septic tank could function effectively at least in the winter and spring and in any case it was established that the septic tank as constructed had no soak-away or percolation area and was incapable of functioning properly for that reason also.
For the County Council Mr. Joseph Osborne, a consulting engineer, gave evidence. He disagreed with Dr. Bunni about the site being situated noticeably in a depression or as appearing noticeably likely to flood. He said that if the septic tank were properly constructed at a higher level it could function provided a proper percolation area was constructed. There is a sharp difference of view between these two professional engineers and I have to decide what evidence I should accept. Having considered the matter and seen the photographs and maps which have been put in evidence I am not satisfied that the area of this site should at once be recognised as vulnerable to flooding. I have no doubt that it is vulnerable but I am not satisfied that a person who simply conducts an inspection of it ought to be alerted to that risk and to that extent I accept Mr. Osborne’s evidence and reject Dr. Bunni’s. However, I am not at all satisfied that the defects relating to flooding and to the septic tank are capable of remedy by the methods recommended by Mr. Osborne. On this aspect, Dr. Bunni’s conclusions seem to me more convincing and probably correct, namely that until an effective drain is constructed from this site to the river Fane it will continue to suffer from flooding and will be unsuitable for a septic tank. There is no present possibility of constructing such a drain owing to the refusal of consent of an intervening landowner over whose land it would have to pass. I am satisfied that the plaintiffs are now five years after the purchase left with a site and dwellinghouse with the very serious defects described.
I now turn to consider their claims against the three defendants. As against the first defendant it is pleaded that the contract contained an express term that the first defendant would remedy structural defects in the dwellinghouse which manifested themselves within a period of six years; and it is contended that failure to provide adequate site drainage or any suitable sewerage system was a structural defect. The provision in the contract is expressed in the following words:” “The purchaser requires a structural defects indemnity for a minimum period of six years, such indemnity to include all services.” It is further pleaded that the contract for purchase contained an implied term that the house had been designed, located and constructed to reasonable standards and would be free from defects. It is also pleaded that the first defendant owed a duty of care to the plaintiffs to ensure that this house was built in a place and manner which was reasonably suitable for such a building.
The first defendant gave evidence that he was an electrician employed by the E.S.B. and that he built this house himself with the aid of direct labour whom he employed with the intention of living in it with his family. He had no previous building experience. He bought the site with the benefit of an existing planning permission. He says the site was pointed out to him by the vendor and that he assumed the planning permission covered the site and commenced to build without any further investigation or enquiry. Prior to building he does not seem ever to have checked the planning permission or made any check in regard to the suitability of the site. When the house was built he never lived in it but decided to sell it for financial reasons. Before selling he discovered that the site on which he had built the house did not have any planning permission and he then applied for permission to retain the structure under s. 28 of the Local Government (Planning and Development) Act, 1963, and this application was granted by Louth County Council as the planning authority. After it had lain vacant for two years it was sold to the plaintiffs. The statement of claim alleges that by reason of the defendant’s negligence, the plaintiffs have suffered loss, damage, deterioration of health, personal inconvenience and discomfort. There was evidence of great inconvenience and discomfort and some evidence of health deterioration. In any event, the liability to severe flooding and the incomplete drainage by septic tank which was rendered incapable of functioning by reason of the high water table on the site leading to flooding are both matters which were likely to affect the health of the plaintiffs. But the principal evidence of the second plaintiff concerned the financial loss suffered by the plaintiffs by reason of the fact that the house with all the defects complained of is worth only half the market value it would have if it were free from these defects. I have to consider whether this loss is recoverable as damages for breach of a common law duty to take care owed by the first defendant or for breach of contract.
If this defendant is considered simply as a vendor, there is considerable authority for saying that the rule caveat emptor applies, and that unless there are warranties given the purchaser must look out for himself.
In McGowan v. Harrison [1941] I.R. 331 at p. 337 Maguire P. cited with approval the dictum of Atkinson J. in Otto v. Bolton and Norris [1936] 2 K.B. 46 at p. 52:”
“It is settled law that the vendor of a house, even if also the builder of it, gives no implied warranty as to its safety. A purchaser can make any examination he likes, either by himself or by somebody better qualified so to do. He can take it or leave it, but if he takes it, he takes it as he finds it. It is, perhaps, the strongest example of the application of the maxim ‘caveat emptor’.”
Then there is the fact in the present case that the first defendant was not only the vendor; he was also the builder and while he says he built it for his own use, he had decided even before it was complete to sell it and he never went into occupation himself. It must, I think, have been within his reasonable contemplation at a very early stage that he might sell this house at some time and possibly when it was completed. In these circumstances, did the builder owe a duty of care on the principle of proximity at common law to the plaintiffs who became the purchasers?
In Colgan v. Connolly Construction Co. (Ireland) Ltd. [1980] I.L.R.M. 33, the plaintiff, who was the second owner of a dwellinghouse, sued the defendant building company for damages in respect of defects in the dwellinghouse. McMahon J. in the High Court, having accepted the reasoning of Lord McDermot in Gallagher v. N. McDowell Ltd. [1961] N.I. 26, said at p. 36:”
“I am satisfied . . . that the principle of Donoghue v. Stevenson applies to the relationship between the builder of a house and a subsequent occupier so as to entitle the occupier to recover damages against the builder for personal injuries caused by defects in the house which are attributable to the negligence of the builder and which are not discoverable by the kind of examination which the builder could reasonably expect the occupier to make before occupying the house.”
In the Supreme Court in Siney v. Corporation of Dublin [1980] I.R. 400 at p. 421 Henchy J. expressed the view (which was not strictly necessary to the decision in that case) which was also relied upon by McMahon J. in Colgan v. Connolly Construction Co. (Ireland) Ltd. [1980] I.L.R.M. 33 that:”
“Following on Donoghue v. Stevenson [1932] A.C. 562 it has been established by a line of decisions (such as Dutton v. Bognor Regis Urban District Council [1972] 1 Q.B. 373; Anns v. Merton London Borough [1978] A.C. 728 and Batty v. Metropolitan Realisations Ltd. [1978] Q.B. 554) that where a person, including a builder or a local authority, carelessly provides a dwelling in which there is a concealed defect which the occupier could not have discovered by inspection, the person who provided the dwelling may be liable in negligence for personal injury or economic loss suffered as a result of the defect.”
Relying on the authority of the views expressed in these two judgments I am prepared to hold that in the present case the first defendant owed a duty of care to the plaintiffs in the siting and construction of this house and its drainage system comprising a septic tank.
When the first defendant took it on himself to build this house which at some time was likely to be sold and which at some stage during or after the completion of the building he decided to sell, he was under a duty in relation to the siting and construction of the house, including its drainage system, to exercise the care and skill which a reasonably careful and skilful builder would show in the circumstances. I have come to the conclusion that he singularly failed to exercise such care or skill in the siting of the house and in the construction of the drainage system with a septic tank which for many months of the year is incapable of functioning by reason of the ambient water table and is further seriously defective by reason of the failure to provide any proper soak-away or percolation area. In my judgment these matters also constitute a breach of contract of the express structural defects indemnity having regard to the terms in which this is expressed. At this point it is convenient to state that having regard to the express terms of this contract, I do not find that any terms that this house would be designed located or constructed to a reasonable standard or free from defects ought to be implied.
I turn back to the question of breach of common law duty and to the judgment of McMahon J. in Colgan v. Connolly Construction Co. (Ireland) Ltd. [1980] I.L.R.M. 33 where at pp. 36-37 he continues:”
“I think it is clear in the case of defects in the dwelling which threaten the health or safety of the occupier that he is entitled to recover expense incurred in removing such defects where he discovers them before they have caused injury. The right to recover damages of that kind was considered to be beyond question by Lord Denning M.R. in Dutton v. Bognor Regis [1972] 1 All E.R. 464 at p. 474 and by Lord Justice Sachs in his judgment in the same case at p. 490. It was also the view of Lord Wilberforce in Anns v.Merton LBC [1977] 2 All E.R. 492 because at p. 505 Lord Wilberforce dealing with the application of the Statute of Limitations held that a cause of action arose. “When the state of the building is such that there is a present or imminent danger to the health or safety of persons occupying it”.
I therefore hold that the plaintiff is entitled to the cost of making the roofs safe and making good the small portion of defective plaster which I have mentioned as a possible danger. I assess the damages under this head at £300.
The defect in the porch roof is due to an inadequate flashing and this is admitting moisture which is causing a damp patch on the sittingroom wall. It is a defect which did not appear until the last year or so but unless it is remedied there will be a gradual deterioration of the fabric of adjoining parts of the dwellinghouse. It is not, in my view, a defect which threatens the health or safety of the occupiers. The defect in the internal plasterwork consists of the absence of a proper bond between the plaster and the blockwork walls over large areas. This defect has existed since the house was built and is probably due to the fact that the plaster was applied before the blockwork was properly dried out. I do not consider it a threat to the health or safety of the occupiers and it is in the nature of a defect of quality in the house. The existence of an inadequate cavity in the external walls is also a defect of quality. The house is not as well insulated as if the walls had a cavity of proper width. The defect does not affect the health or safety of the occupiers or the durability of the dwelling.
I have therefore to consider whether these defects which reduce the value of the dwellinghouse and, in the case of the leak from the porch roof, damaged the fabric of it are matters for which damages can be recovered by the occupier under the principle of Donoghue v. Stevenson.
I do not think that the English decisions already referred to recognise any right to recover damages for defects of these kinds. In Anns v. Merton LBC [1977] 2 All E.R. 492 damages were held to be recoverable in respect of damage to the dwellinghouse itself from defective foundations. That case was an action brought not against the builder but against the local authority for breach of their duty to take reasonable care to secure compliance with the building bye-laws. The defect was a danger to the health and safety of the occupiers of the dwelling. Lord Wilberforce said at (p. 505):”
‘In my opinion they [the damages] may also include damage to the dwelling house itself; for the whole purpose of the byelaws in requiring foundations to be of a certain standard was to prevent damage arising from weakness of the foundation which is certain to endanger the health or safety of the occupants.’
In my opinion it does not follow from this that damages for damage to the dwellinghouse itself which does not threaten health or safety are recoverable against the builder. The builder’s breach of duty was not a duty arising under a bye-law designed to ensure that the foundations are adequate to bear the house and thereby protect health and safety but of the common law duty of care recognised by the principle of Donoghue v. Stevenson. I think that it is a duty to take care to avoid defects in the product which may cause personal injury or damage to property but the product itself has not been regarded as falling within the scope of the duty. The obligation of the builder or manufacturer in regard to the quality of his product is, in my view, something which ought to rest in contract only. It is not of the same nature as his common law duty under the principle of Donoghue v. Stevenson because that duty is founded upon the concern of the law to see that the product is not a cause of injury or damage to persons or property subsequently affected by it. Where a defect is such that no question of such
injury or damage arises I see no good reason for extending the principle of Donoghue v. Stevenson to defects in the quality of the product itself. I would therefore hold that the plaintiff is not entitled to recover damages for the defects in the internal plaster (other than that mentioned) for the defect in the porch roof and for the builder’s failure to provide an adequate cavity in the external walls.”
I do not in the present case have to consider simply a defect of quality in the construction of this house, or to decide whether the right to recover damages extends to defects which are only defects of quality as opposed to those which are likely to affect health and safety. The defects with which I am concerned are likely to affect the health and safety of the plaintiffs. A rather different question arises as to the appropriate measure of damages.
In regard to the flooding the evidence, which I accept, has been that it can only be effectively remedied by the construction of a substantial drain to the river Fane; that this is not possible owing to the absence of consent of an intervening landowner and that in any case the cost of constructing this drain would be very substantial. The other alternative remedy suggested in evidence was the raising of the entire site on which this house is situated. The cost of this was estimated to be of the order of £100,000.
In my view the cost of each of these remedies is disproportionately large in comparison to the market value of this house and to the amount by which its value has been depreciated by the defects complained of, and it would not be just or reasonable between the parties to adopt either as the measure of damages. In these circumstances and being guided by the principles expressed by the Supreme Court in Munnelly v. Calcon Ltd. [1978] I.R. 387 I think it is appropriate to apply as the measure of damages the amount by which the market value of the plaintiffs’ house has been devalued by reason of the first defendant’s negligence.
I accept the evidence of Mr. Brown the auctioneer from the firm of Donal Myles, Drogheda, that the market value of the house today, if it were free of defects, is £45,000, but that with its existing defects and in its present state no normal individual would buy it. In his opinion if it was put up for sale with all its defects, someone might offer half its market value with a view to spending money on it to make it good and that was probably the best that could be obtained for it, but there was no guarantee that such a purchaser could be found. In these circumstances, I assess the plaintiffs’ damages in respect of the condition of the house at £24,000.
There has been evidence that the plaintiffs were put to much labour in digging trenches to abate the flooding, that they have had to live in conditions of dampness and flooding for several months each year, that they have had to spend money on redecorating which would not otherwise be necessary and that since Mr. Sunderland’s employment changed to Dublin he has had to travel to and from Dublin each day because the plaintiffs felt they could not afford to sell the house in its present condition, and instead of selling and buying another house in Dublin were obliged to continue living in this house. As a result Mr. Sunderland incurred travelling expenses to Dublin and back each working day. In respect of these matters I will award an additional sum of £3,000 damages. There will therefore be judgment against the first defendant for £27,000, as damages for negligence and for breach of contractual indemnity.
I turn now to consider the liability of Mr. Flynn-Rogers, an architect, having regard to the scope of his engagement. The duty of care which an architect undertakes is related to and determined by the scope and terms of his engagement, that is of the work which he is engaged to carry out. Mr. Flynn-Rogers says he was asked to inspect the house by the plaintiffs as prospective purchasers as a matter of urgency and to give a report. He interpreted this and I think reasonably in the circumstances as meaning a”walk through” visual inspection of the property. In such circumstances his duty of care and skill relates to the inspection and report. His duty is to inspect the building with the eye of a competent architect and to draw the inferences which such an architect would draw from what he sees. If there are physical signs which would alert him to the existence or possible existence of some problem or danger he would be obliged to warn or recommend that they be investigated further. But the building is not his building or his client’s and the fabric or construction may only be opened with permission of the owner and he will not normally recommend this unless he has cause to believe it is necessary.
Having considered all the evidence I find that Mr. Flynn-Rogers carried out the inspection and made his report as he was engaged to do. I am not satisfied that there were any physical signs either in the building or the septic tank or the site which should have alerted him to problems. In particular I am not satisfied that either a view of the site should have suggested it was in a significant depression, which might involve the risk of flooding, or that the level of the ventilators in the house walls should have alerted him to some such risk or that a view of the septic tank should have led him to recommend that it should be opened up or tested in operation. Further I accept that an engagement to conduct an urgent visual inspection of a premises and provide a report does not by itself impose a responsibility on an architect to examine ordnance survey maps or the documents of the planning application made by the builder and the planning permission or to check whether there has been compliance with them or not. In most cases compliance with the planning permission is the subject of a requisition by the purchaser’s solicitor and an answer by the vendor and in the event of the reply being unsatisfactory no doubt an examination of the planning documents may be undertaken or requested by the purchaser’s solicitor. I have therefore come to the conclusion that the allegations of breach of contract and of negligence made by the plaintiffs against Mr. Flynn-Rogers have not been made out.
The claim against Louth County Council gives rise to different considerations. The plaintiffs’ claim against this defendant is that as the planning (and housing, sanitary and health) authority for the administrative area in which the dwellinghouse is situated they owed a duty to the plaintiffs in the granting of planning permission for the erection of this house and in the granting of the permission for its retention. The plaintiffs allege that these defendants were negligent and in breach of that duty of care firstly, in permitting its erection on a site liable to serious flooding, and which was unhealthy and insanitary; and in permitting the construction of a septic tank on a site where it was unable to function and the construction of an insanitary sewer system. And secondly, in granting a permission to the first defendant to retain this house and drainage system notwithstanding these matters and the fact that the dwellinghouse had been erected on a site materially different to the site in respect of which planning permission had initially been granted. For the purpose of this action the plaintiffs’ claim has been concerned with an alleged breach of a common law duty of care owed by Louth County Council to the plaintiffs in carrying out their duties as planning authority under the Local Government (Planning and Development) Acts, 1963-1976.
The legal principles applicable to a claim of this kind have recently been considered by Costello J. in Ward v. McMaster [1985] I.R. 29. At pp. 49 and 50 of the report he comes to the following conclusion:”
“Whilst not attempting in any way to summarise all the conclusions which are to be derived from the authorities which I have just quoted, it seems to me that for the purposes of this case I can apply the following principles:”
(a) When deciding whether a local authority exercising statutory functions is under a common law duty of care the court must firstly ascertain whether a relationship of proximity existed between the parties such that in the reasonable contemplation of the authority carelessness on their part might cause loss. But all the circumstances of the case must in addition be considered, including the statutory provisions under which the authority is acting. Of particular significance in this connection is the purpose for which the statutory powers were conferred and whether or not the plaintiff is in the class of persons which the statute was designed to assist.
(b) It is material in all cases for the court in reaching its decision on the existence and scope of the alleged duty to consider whether it is just and reasonable that a common law duty of care as alleged should in all the circumstances exist.”
Applying these principles, with the statement of which by Costello J. I respectfully agree, I must first consider the statutory framework within which Louth County Council as planning authority for the area was operating. The first defendant having erected the house on its site approximately 143 metres to the west of the site for which Louth County Council had on the 11th November, 1976, granted planning permission then applied on the 26th April, 1978, for a permission for the retention of the house under s. 28, sub-s. 1 of the Local Government (Planning and Development) Act, 1963. Section 28, sub-s. 1 provides:”
“The power to grant permission to develop land under this Part of this Act shall include power to grant permission for the retention on land of any structures constructed, erected or made on, in, or under the land on or after the appointed day and before the date of the application . . . (whether without permission granted under this Part of the Act or in accordance with permission so granted for a limited period only); and references in this Part of this Act to permission to develop land or to carry out any development of land, and to applications for such permission, shall be construed accordingly.”
This section refers back to and enlarges the scope of s. 26 which deals with permission for development. Section 26, sub-ss. 1 and 2 provide:”
“(1). Where ”
(a) application is made to a planning authority in accordance with permission regulations for permission for the development of land or for an approval required by such regulations, and
(b) any requirements relating to the application of or made under such regulations are complied with,
the authority may decide to grant the permission or approval subject to or without conditions or to refuse it; and in dealing with any such application the planning authority shall be restricted to considering the proper planning and development of the area of the authority (including the preservation and improvement of the amenities thereof), regard being had to the provisions of the development plan, the provisions of any special amenity area order relating to the said area and the matters referred to in subsection (2) of this section.
(2). Conditions under subsection (1) of this section may, without prejudice to the generality of that subsection, include all or any of the following conditions:
(a) conditions for regulating the development or use of any land which adjoins, abuts or is adjacent to the land to be developed and which is under the control of the applicant, so far as appears to the planning authority to be expedient for the purposes of or in connection with the development authorised by the permission,
(b) conditions for requiring the carrying out of works (including the provision of car parks) which the planning authority consider are required for the purposes of the development authorised by the permission,
(c) conditions for requiring provision of open spaces,
(d) conditions for requiring the planting of trees, shrubs or other plants or the landscaping of structures or other land,
(e) conditions for requiring the giving of security for satisfactory completion of the proposed development (including maintenance until taken in charge by the local authority concerned of roads, open spaces, car parks, sewers, watermains or drains),
(f) conditions for requiring roads, open spaces, car parks, sewers, watermains or drains in excess of the immediate needs of the proposed development,
(g) conditions for requiring contribution (either in one sum or by instalments) towards any expenditure (including expenditure on the acquisition of land and expenditure consisting of a payment under subsection (7) of this section) that was incurred by any local authority in respect of works (including the provision of open spaces) which have facilitated the proposed development, being works commenced neither earlier than the 1st day of August, 1962, nor earlier than seven years before the grant of permission for the development,
(h) conditions for requiring contribution (either in one sum or by instalments) towards any expenditure (including expenditure on the acquisition of land) that is proposed to be incurred by any local authority in respect of works (including the provision of open spaces) facilitating the proposed development, subject to stipulations providing for ”
(i) where the proposed works are, within a specified period, not commenced, the return of the contribution or the instalments thereof paid during that period (as may be appropriate),
(ii) where the proposed works are, within the said period, carried out in part only or in such manner as to facilitate the proposed development to a lesser extent, the return of a proportionate part of the contribution or the instalments thereof paid during that period (as may be appropriate), and (iii) payment of interest on the contribution or any instalments thereof that have been paid (as may be appropriate) so long as and in so far as it is or they are retained unexpended by the local authority,
(i) conditions for requiring compliance in respect of the land with any rules made by the planning authority under subsection (6) of this section,
(j) conditions for requiring the removal of any structures authorised by the permission, or the discontinuance of any use of the land so authorised, at the expiration of a specified period, and the carrying out of any works required for the reinstatement of land at the expiration of that period.”
In this case Louth County Council had to consider an application within the context of s. 26, sub-s. 5 by the first defendant for permission to retain the dwellinghouse he had constructed on an unauthorised site. The section prescribes that in dealing with such an application the planning authority shall be restricted to considering the proper planning and development of the area of the authority (that is in this case County Louth) including the preservation and improvement of its amenities, regard being had to the provisions of the development plan, the provisions of any special amenity area order relating to the area and to the matters referred to in s. 26, sub-s. 2 set out above. Without prejudice to the generality of the provisions of sub-s. 1, sub-s. 2 permits conditions in about ten separate categories to be attached to a planning permission. It appears to me that the provisions of s. 26, sub-s. 2 are intended to assist in the implementation of the proper development of the planning authority’s area in accordance with the development plan which has been adopted and of any relevant special amenity area order. They do not seem to me to be concerned with such matters as the specification or design of particular septic tanks or soak-away areas which might appropriately be the subject of local authority building regulations, nor I think are they concerned with the protection of individual houses against flooding due to a locally high water-table. Indeed in exercising its statutory functions by making a decision under s. 26 to grant a planning permission or under s. 28 to grant a permission for retention the planning authority is expressly restricted by the words of the section to consideration of the matters specified in this section. I find this view of these provisions strengthened by the terms of the title to the Local Government (Planning and Development) Act, 1963, and by the general scheme of its provisions. The Act is entitled an Act to make provision, in the interests of the common good, for the proper planning and development of cities, towns and other areas, whether urban or rural (including the preservation and improvement of the amenities thereof), to make certain provisions with respect to acquisition of land, to repeal the Town and Regional Planning
Acts, 1934 and 1939 and certain other enactments and to make provision for other matters connected with the matters aforesaid.
Among “the other matters connected with the matters aforesaid” for which provision is made by the Act, s. 86 in effect empowers the Minister for Local Government to make building regulations and indicates the matters which such building regulations may extend to. But in my view the fact that the Minister may make building regulations and the subject matter which may be provided for in such regulations are not matters which are within the purview of the planning authority when they come to consider an application under ss. 26 or 28 for permission. Here I should mention the fact proved in evidence that Louth County Council has not at any relevant time in this case adopted any building regulations for its administrative area and so there were no building regulations applicable to this house at the time of its construction.
Having considered the provisions of the Local Government (Planning and Development) Act, 1963, as constituting the statutory framework within which Louth County Council was operating, the purpose of these provisions, the way in which the plaintiffs’ claim against the County Council is framed by reference chiefly to the erection of a dwellinghouse in an area allegedly liable to flooding and with a drainage system which was incapable of function, I have come to the conclusion that, in regard to the matters complained of by the plaintiffs, a relation of proximity did not exist between Louth County Council and the plaintiffs; that the purposes for which these powers were conferred are quite different and distinct from and did not comprehend the subject matter of the plaintiffs’ complaints which more properly fall within the appropriate area of building regulations. In all the circumstances I conclude that in considering whether to grant the original planning permission and the ultimate permission for retention of the dwellinghouse Louth County Council did not owe the plaintiffs a common law duty of care in regard to the matters complained of by the plaintiffs and that to hold otherwise would not be just or reasonable in the circumstances. The plaintiffs’ claim against the second and third defendants will therefore be dismissed. There will be judgment against the first defendant for £27,000.