The 30 year retrospective limitation period is effective in ongoing litigation
The Court of Appeal dismissed both appeals – the First Appeal, the substantive appeal against Fraser J’s order on the preliminary issues, as well as the subsequent amendments appeal against the orders made by the Deputy High Court Judge (the Second Appeal).
The effect of Section 135 is a retrospective extension of the limitation period from 6 to 30 years. This gave BDW a new route, the DPA, through which to pursue its defects claim. Coulson LJ held that, although there was an exception to address claims that had been finally determined or settled (Section 135(6)), there was no exception relating to the rights of parties involved in ongoing litigation. The amendment effected by Section 135, which adds the extension to the relevant limitation position, is to be treated as always having been in force. As the judge stated:
"To put the point another way, since 1972, there was never a time when those extended periods did not apply."
Can developers be owed duties under the DPA?
BDW's position was that it was owed a duty by URS under the DPA as, under Section 1(1) DPA, URS was a person taking on work for or in connection with the provision of a dwelling, and BDW was a person to whose order that dwelling was being provided under Section 1(1)(a) of the DPA.
URS, on the other hand, argued that BDW owes a duty under the DPA and is not a person to whom a duty is owed, that it would be illogical that BDW, as a developer, could both simultaneously owe and be owed duties under the DPA. URS also argued that the DPA was a piece of consumer protection law which should protect individual occupiers, rather than on commercial organisations like BDW.
The Court of Appeal, however, decided that a developer in a similar position to BDW can both be owed and owe a duty under the DPA. This is clear from the words used:
"… the straightforward grammatical meaning of the words used in s.1(1)(a)"
In addition, there is nothing in the words of the DPA that limits the recipient of the duty to individual purchasers, rather than companies or commercial organisations. The judgment therefore confirms that, whilst it must relate to a dwelling, a claim under the DPA can be a business-to-business claim, as long as the claimant has, or in this case had, a legal or equitable interest in the resulting building.
In reaching this conclusion, the Court of Appeal also rejected an argument from URS that BDW had, in fact, suffered no loss under the DPA because BDW had sold the building by the time of the remedial works. It is not uncommon for a developer to sell on a development and then subsequently undertake remedial works. The Court of Appeal confirmed such a developer would be able to recover damages from other duty-holders under the DPA in such circumstances.
Seeking a financial contribution under the Contribution Act
Under the Contribution Act, a party is able to seek a contribution from other entities who are liable for the same damage. BDW remediated the structural defects that came to light and then sought a contribution, towards the costs of remedial work, from URS, on the basis that both parties were liable to the owners of individual flats for the same damage.
URS argued that, before BDW could bring a claim under the Contribution Act against URS, a claim against BDW or at least an intimation of a claim or the settlement of such claim by BDW, was needed. The remediation works had been carried out by BDW at a time when (a) BDW had no proprietary interest in the developments and (b) BDW would have had a limitation defence in respect of any claim from the owners (because the BSA and the extended limitation periods it introduced had not been enacted at that point in time).
The Court of Appeal held that there is nothing in Section 1(1) of the Contribution Act to suggest that the making or intimation of a claim was a condition precedent to the bringing of a contribution claim. Coulson LJ stated
"… I conclude that, as a matter of statutory interpretation, and as a matter of policy, there is no requirement or obligation for A to serve some sort of formal claim on B before C’s liability to make a contribution to B arises."
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