Alderson & Anor v Beetham Organisation Ltd.

Where a builder or developer undertakes further work after completion for the purpose of rectifying defective original work, section 1(5) of the Defective Premises Act 1972 may give rise to a separate cause of action. The further work need not successfully cure the defect. A misdiagnosis may leave the dwelling unfit for habitation and still constitute a failure in respect of the remedial work. Liability may arise from omission as well as positive work. Limitation for the second cause of action runs from completion of the further work, but the claim remains confined to matters connected with that work.

The claimants purchased two basement flats in a development completed in 1994. Damp and mould appeared in 1995. The defendant undertook works to flagstones, drainage and a downpipe, but the damp-proofing defect remained and the flats continued to be unfit for habitation.

Proceedings issued in January 2001 alleged breach of the statutory duty under section 1 of the Defective Premises Act 1972. The Technology and Construction Court struck out the claims as statute barred, holding that limitation ran from completion of the original development. The appeal concerned whether the later works fell within section 1(5), so that a fresh cause of action accrued when those works were completed.

1. Disposition. The appeal was allowed unanimously. The order striking out the claims was set aside and the case was remitted for trial.
2. Statutory structure. Section 1(1) of the Defective Premises Act 1972 imposes a statutory duty on a person taking on work connected with providing a dwelling. The work must be carried out in a workmanlike or professional manner, with proper materials, and so that the dwelling is fit for habitation when completed. Section 1(5) recognises two distinct causes of action. The first concerns the original work and accrues on completion of the dwelling. The second concerns further work undertaken to rectify the original work and accrues when that further work is finished.
3. Remedial-work inquiry. Judge LJ identified two fact-sensitive questions: whether the purpose of the further work was to rectify defects in the original work, and whether the remedial work met the statutory standards. The distinction between misfeasance and nonfeasance was immaterial. An omission may constitute a failure to carry out remedial work in a workmanlike manner, consistently with [1991] 1 WLR 783. The proviso is concerned with work undertaken to rectify the original work, rather than merely with solving an unidentified problem.
4. Application. The further works were undertaken in response to the damp and with the purpose of making the flats fit for habitation. They failed to address the defective damp-proofing system, and the flats remained unfit. The failure therefore gave rise to a cause of action in respect of the further work, notwithstanding that the physical works carried out were themselves competently performed. Longmore LJ used the common-law analogy in [1966] 1 WLR 1317, but emphasised that the statutory scheme independently provided the second cause of action. Proceedings issued before the resulting limitation period expired.
5. Qualification and orders. Aldous LJ left open the hypothetical case involving two separate causes of unfitness where only one was rectified. The respondent was ordered to pay the appellants’ costs of the appeal and below, subject to detailed assessment, and the other procedural orders were set aside.

1. Court of Appeal (Civil Division): In [2003] EWCA Civ 408, the appeal was allowed, the order of the Technology and Construction Court was set aside, and the case was remitted for trial.
2. Queen’s Bench Division, Technology and Construction Court: HHJ Mackay, sitting as a deputy judge, ordered on 3 October 2002 that the claims be struck out as statute barred.