Harris Springs Ltd v Howes

For limitation purposes, actual knowledge of damage attributable to negligence requires knowledge of the material facts constituting the essence of the complaint. Mere suspicion, or awareness of a real possibility which requires expert investigation before a definite view can be reached, is insufficient. The court must separately consider whether constructive knowledge should nevertheless be imputed under section 14A(10) of the Limitation Act 1980. That inquiry asks what a reasonable person in the claimant’s position would have done, including whether it was reasonable to seek advice from an alternative expert. Where the claimant reasonably relies on the defendant’s continuing professional advice, and that advice does not indicate significant damage or structural instability, earlier constructive knowledge will not necessarily arise.

The claimant brought proceedings against a structural engineer arising from alleged negligent foundation design for a factory extension. The parties agreed, for the preliminary limitation issue, that the defendant owed a duty of care, was negligent, and caused the alleged damage. The primary six-year limitation period had expired. The issue was whether the claimant had, or ought reasonably to have acquired, the knowledge required by section 14A of the Limitation Act 1980 more than three years before proceedings were commenced on 28 July 2006.

The central questions were whether the claimant knew, or suspected, that the foundations were inadequate and that the damage was attributable to that alleged defect, and whether it was reasonable to expect the claimant to obtain advice from another engineer before the floor slab cracked in 2003.

1. Preliminary issue. The claim was not statute barred. It was declared that the claimant did not have the knowledge required to bring an action for damages earlier than three years before 28 July 2006. The defendant was ordered to pay the claimant’s costs of the preliminary issue on the standard basis.
2. Under section 14A(5)–(9) of the Limitation Act 1980, the claimant needed knowledge of the material facts about the damage and that the damage was attributable, in whole or in part, to the alleged negligent act or omission. Knowledge that the conduct amounted to negligence was irrelevant.
3. Applying Haward v Fawcetts [2006] 1 WLR 682, the judge held that suspicion was not knowledge. Nor would knowledge of a real possibility of foundation problems, where expert assistance was still needed before a more definite view could be reached, necessarily amount to actual knowledge. The relevant question would then be whether further steps were reasonably required under section 14A(10).
4. The claimant’s actual knowledge was insufficient before the floor slab cracked in autumn 2003. The earlier movement, cracking and monitoring did not cause the claimant’s relevant personnel to know or suspect that the foundations were defective. The defendant’s advice repeatedly reassured the claimant and treated the movement as insignificant or seasonal.
5. For constructive knowledge, the court applied the approach stated in Adams v Bracknell Forest Borough Council [2005] 1 AC 76: the question was how a reasonable person in the claimant’s position would have acted. It was reasonable for the claimant to continue relying on the defendant, who remained willing to advise and did not identify a significant structural problem. The claimant could not reasonably have been expected to seek alternative engineering advice earlier.

Permission to appeal was refused because there was no real prospect of success.

First-instance determination of an agreed preliminary limitation issue. Permission to appeal was refused by the High Court.