Liberty Syndicate Management & Anor v Campagna Ltd & Anor

A technical auditor’s duty is defined by the retainer and its commercial context. The auditor does not guarantee defect-free construction or compliance with every building regulation. The duty is to exercise reasonable skill and care to assess whether a property presents a standard insurance risk.

Intermittent inspections permit reasonable reliance on a competent contractor, but that trust must be earned. Auditors must inspect critical construction details, adopt increased vigilance where workmanship gives cause for concern, and carry out inspections at stages sufficient to observe important work. At final inspection, they must examine accessible roof spaces and the external envelope. Where plans are inadequate, they must investigate critical details on site or report the deficiency.

Liberty, insurers and syndicate members operating a latent defects scheme, claimed that Campagna, the scheme’s technical auditor in Ireland, had failed to inspect newly constructed residential properties with reasonable skill and care. The claim concerned three developments and various sample properties.

The hearing determined preliminary issues concerning the scope of Campagna’s contractual duty, the appropriate standard of care, the required inspections and information, and whether particular defects should have been identified. Issues of quantum and most questions of causation were reserved.

1. Scope and standard of duty. The scope of Campagna’s duty was determined by the retainer, construed in its commercial context. Campagna was not required to ensure that every building was defect-free, nor to perform the full function of a building control officer or a building surveyor inspecting an existing house. Its duty was to use reasonable skill and care to assess whether each property had been properly constructed and represented a standard insurance risk, particularly in relation to weather tightness and structural stability.
2. Inspections and reliance. Intermittent inspection necessarily means that some defects will escape detection. A technical auditor may reasonably rely on a contractor where there is no reason for concern, but that reliance must be earned. During initial inspections the auditor should see examples of critical details, including damp proof courses and cavity trays, before they are concealed. Increased vigilance is required where the quality of workmanship or conduct of the builder gives cause for concern. Routine opening-up of concealed work is not required without a proper reason.
3. Minimum inspection requirements. Foundation, pre-plaster and completion inspections were the minimum ordinarily required, subject to adequate notice. Additional visits were required where necessary to inspect critical details. The plan check should record the drawings and information examined, queries raised and responses received. Where plans were inadequate, the auditor had to investigate critical construction details on site or report the deficiency to MDIS.
4. Final inspections. A final inspection had to include a proper examination of the roof space, using a suitable ladder, and inspection of the roof and external envelope. Where roof-level access was unavailable, binoculars should be used where necessary. The auditor had to raise defects that created an insured risk and could withhold the Certificate of Approval.
5. Application. Campagna was in breach in relation to, among other matters, the unsupported canopies, inadequate checking of chimney stability, render applied after fascia boards and gutters, damage to the Mountgorry Wood roof, missing parapet cavity trays, defective roof-space detailing, valley gutters and lean-to junctions. It was not in breach in relation to the loose roof tiles, coping stones, balconies, the front parapet cavity tray, or certain unconnected ventilation arrangements where the evidence did not establish a breach.
6. The court determined the preliminary issues. The findings were recorded in the appendices, including that Certificates of Approval should not have been issued for most sample properties, while the certificate for apartment 10 at Mountgorry Wood was properly issued.