Lewisham v MR Ltd

For limitation purposes, a tortious claim for economic loss accrues when the claimant first suffers the relevant loss, not necessarily when defects become apparent or when practical completion is certified. Where a manufacturer’s alleged duty concerns supervision, inspection or quality control during construction, the relevant damage occurs when defective work is carried out and the manufacturer’s supervisory duties end. Practical completion under a building contract does not postpone accrual of a tortious claim against a manufacturer with no responsibility for completing the works. A claim may therefore be summarily disposed of where the pleaded breaches necessarily occurred more than six years before proceedings were commenced.

The claimant contracted with a main contractor for overcladding works to two residential tower blocks. The main contractor subcontracted the supply and installation of the manufacturer’s proprietary system. The defendant manufacturer had no contractual relationship with the claimant, but was alleged to owe a tortious duty of care in relation to supervision, inspection and quality assurance during the works.

The defendant sought summary judgment under CPR 24 on the ground that those causes of action accrued before 11 October 1996 and were barred by section 14 of the Limitation Act 1980. The claimant contended that damage occurred on 8 November 1996, the certified date of practical completion. The issues were the nature of the damage relevant to the alleged duty and when it occurred.

1. Summary judgment granted. The claimant had no real prospect of succeeding on the pleaded tortious claims concerning the defendant’s work and quality-control procedures, supervision and inspections during the overcladding works.
2. The pleaded duty, if it existed, was a duty not to cause economic loss by allowing work to be carried out which failed to conform to the main contract. The alleged failures concerned ensuring proper workmanship and conditions during installation, rather than completing or remedying the works.
3. A cause of action in tort accrues when the relevant damage is first suffered: [1963] AC 758 and [1983] 2 AC 1. The relevant damage was suffered when defective installation occurred. The fact that defects continued until practical completion did not postpone accrual.
4. The date of practical completion was irrelevant to the claim against the manufacturer. Practical completion was a creature of the main contract and might matter to claims against the main contractor or contract administrator, but the manufacturer’s supervisory duties arose during the subcontractor’s works and ended when those works ceased.
5. The reasoning in Invercargill City Council v Hamlin did not assist because English law had preserved a different approach from New Zealand law. New Islington and Hackney Housing Association Ltd v Pollard Thomas and Edwards Ltd supported the conclusion that accrual depends on the nature of the relevant duty and loss, not automatically on practical completion.
6. The proposed amendments relating to the barred claims were pointless and were refused. The court directed that further submissions be made on the precise form of order.