Broster & Ors v Galliard Docklands Ltd & Anor

In negligence claims concerning defects in a building, the court must assess the structure realistically and avoid artificial subdivision into separate components or dwellings. Physical damage to an integrated building caused by a defect in its roof or foundations is ordinarily damage to the thing itself, not damage to other property. The complex structure theory does not provide an escape from that rule. The Latent Damage Act 1986 creates a fresh cause of action for a later owner only where an original owner had already acquired a qualifying negligence cause of action in respect of damage to property. A pre-existing defect, without physical damage, does not satisfy that requirement. Nor can a later cause of action extend from an earlier claim for capital diminution to subsequent physical damage.

The claimants were owners or subsequent purchasers of houses forming a six-unit terrace designed and constructed by the second defendant for the first defendant. During high winds, the common roof lifted and fell back onto the walls, causing damage. The claim alleged negligent design and construction, including failure to strap the roof joists to the walls.

The claimants relied on negligence, contractual obligations and section 3 of the Latent Damage Act 1986. The second defendant applied at an early stage, contending that the pleaded physical damage was damage to the building itself and that no qualifying original cause of action had accrued before the properties were sold. The central questions were whether the common roof and separate dwellings should be treated as distinct property, and whether section 3 supplied a fresh cause of action.

The court concluded that the claimants had no realistic prospect of success on the case pleaded.

1. Damage to the building itself. The terrace was constructed as one physically linked and homogeneous structure with a common roof. It would be artificial to treat each roof segment as separate from the common roof, or the roof as separate from the walls below. The pleaded damage therefore fell within the rule that a duty of care in negligence does not ordinarily protect an owner against damage to the defective building itself.
2. Complex structure theory. The approach in Murphy v Brentwood DC [1991] 1 AC 398, and the reasoning in Bellefield Computer Services Ltd v E Turner & Sons Ltd [2000] BLR 97 and Payne v John Setchell Ltd [2002] PNLR 7, required a realistic assessment of the structure. Separate ownership or use of the terrace units did not make the common roof, or the units beneath it, separate property for this purpose. The exploding-boiler type exception could not be applied to these facts.
3. Latent damage. Section 3 of the Latent Damage Act 1986 requires an original negligence cause of action involving damage to property before a later purchaser can obtain a fresh cause of action. Before the sales, the pleaded facts disclosed only a defect and, at most, economic loss or capital diminution. No physical damage had occurred. The later physical damage was not the same damage or negligence as any earlier capital-diminution claim and could not be imported into section 3.
4. Alternative analysis. Even assuming a viable design complaint, the developer’s possible claim was for economic loss, potentially measured by capital diminution or reasonable repair cost. The judgment also noted that, absent a sale at an undervalue reflecting the defect, economic loss might not be established, referring to Abbott v Will Gannon & Smith Limited [2005] BLR 195.

The claim was dismissed in substance on the pleaded case. Costs and consequential matters were reserved for further argument.

This was a first-instance decision in the High Court’s Technology and Construction Court. The proceedings had been transferred from Winchester County Court; no earlier judgment determining the merits was stated.