(1) BAXALL SECURITIES LIMITED (2) NORBAIN SDC LIMITED v (1) SHEARD WALSHAW PARTNERSHIP (2) SHAW WHITMORE PARTNERSHIP (3) BIRSE CONSTRUCTION LIMITED (4) FK ROOFING LIMITED (5) FULLFLOW LIMITED

A latent defect is the concealed flaw in workmanship or design, not merely the danger resulting from it. In a commercial building, a defect is patent if it would have been discovered by the inspection that the defendant could reasonably anticipate, including skilled advice ordinarily obtained by a purchaser or tenant. Actual inspection, or competent performance of the inspection, is unnecessary.

The appropriate drainage design capacity must be assessed without counting overflow capacity. Overflows are supplementary protection for blockages and rainfall exceeding the design rate. Where the claimant should have discovered and remedied the absence of overflows, and that remedy would have prevented the damage, a separate latent underdesign does not restore causation.

The respondents occupied separate parts of an industrial unit whose valley gutter lacked overflows and whose siphonic drainage had been designed for a rainfall intensity of 75 mm per hour, although 150 mm per hour was appropriate.

After floods in May and September 1995, the Technology and Construction Court held the architects liable for the second flood, but not the first. The absence of overflows was treated as patent and the underdesign as latent. The architects appealed, arguing that the overall system was adequate and that the second flood was not legally attributable to them. The respondents cross-appealed on the finding that the absence of overflows was patent.

1. Appeal allowed; cross-appeal dismissed. The order below was set aside on the basis that the architects were not liable for the second flood. The respondents were ordered to pay 50 per cent of the appellants’ costs.
2. The cross-appeal failed. A reasonably diligent surveyor inspecting a commercial building should have discovered the absence of overflows, particularly where previous flooding had been reported. The defect was therefore patent, regardless of whether the surveyors actually discovered it or performed their task competently.
3. The proposed method of treating drainage and overflow capacity as a single balancing exercise was rejected. The design rate had to be assessed independently. Overflows were intended to deal with water in excess of that rate, and could not be used to validate an otherwise underdesigned system.
4. A latent defect is the actual concealed flaw, rather than the propensity to cause damage. A defect is patent where it would have been discovered by the inspection reasonably anticipated in the circumstances. Actual knowledge, or a reasonable opportunity for such discovery, will ordinarily negative the duty of care or break causation, unless it was reasonable for the claimant to leave the danger unremedied.
5. On causation, the effective remedial measure would have been the installation of overflows or equivalent supplementary drainage. That measure would have prevented both floods. The underdesign did not constitute an independent effective cause capable of reconnecting the chain of causation after the respondents’ failure to discover and remedy the absence of overflows.
6. The court also confirmed that it could vary or alter its judgment before perfection of the order, although that jurisdiction was exceptional. A fair opportunity to address an issue was a sufficient reason to reconsider the draft conclusion.

• Court of Appeal (Civil Division) allowed the architects’ appeal and dismissed the occupiers’ cross-appeal.
• Technology and Construction Court, HH Judge Bowsher QC, held the architects liable for the second flood but not the first, and awarded £612,153.02 plus interest.