Rendlesham Estates Plc & Ors v Barr Ltd

Under section 1 of the Defective Premises Act 1972, a dwelling is assessed at completion by reference to contemporary standards. Fitness for habitation requires reasonable occupation without material risk to health or safety and without undue inconvenience or discomfort. The assessment is fact-sensitive and considers defects cumulatively.

An individual apartment, potentially including an exclusively used balcony, is a dwelling. Common and structural parts are not themselves dwellings, but work to them may be carried out in connection with the provision of each apartment. Latent defects and risks of structural failure may establish unfitness. A claimant may recover the reasonable cost of works necessary to restore fitness, even where the works benefit other leaseholders.

The claimants owned or occupied apartments in two blocks constructed by Barr in Leeds. They alleged that defects in the apartments, common parts and structural elements made the apartments unfit for habitation when completed. The claim was brought under section 1 of the Defective Premises Act 1972, together with claims for remedial costs, diminution in value, distress and inconvenience, and related losses.

The principal issues were the meaning of dwelling, the scope of work done in connection with the provision of a dwelling, the test for fitness for habitation, representative proceedings, causation, the measure of damages and the effect of maintenance or refurbishment.

1. Construction of section 1. Each apartment, together with its balcony and possibly other parts to which the occupier had exclusive access for living, was a separate dwelling. The common parts and basement car park were not part of any particular dwelling. Nevertheless, their construction was work carried out in connection with the provision of each apartment because the structural and common parts served the apartments and were subject to shared rights and financial responsibility.
2. Fitness for habitation. The relevant condition was that at completion, extended to the end of any relevant defects liability period. The apartment had to be capable of occupation for a reasonable time without risk to health or safety and without undue inconvenience or discomfort. The assessment was one of fact and degree, considering defects as a whole. Persistent and more than minor damp or mould, hazardous access or escape routes, significant security inconvenience, fire-safety defects, and a real risk of structural failure during the design life could establish unfitness. Cosmetic defects alone could not.
3. The standard of design and workmanship was judged by the standards prevailing when the work was carried out. A defect did not cease to be actionable merely because it could be remedied cheaply. That consideration went to damages and mitigation. Ordinary maintenance or refurbishment which a reasonable owner ought to have undertaken could break the causal connection, but not where it would be futile or merely postpone the consequences of defective construction.
4. The court rejected the proposed representative proceedings under CPR 19.6 because unfitness was an essential and apartment-specific element of each cause of action. The claimants therefore did not have the same interest as all other leaseholders.
5. Barr was liable for numerous defects, including defective external glazing, roofs, walkways, internal partitions and shower trays. The owners of affected apartments could recover the reasonable cost of works necessary to restore fitness, including the full cost of repairing common parts where that was necessary, subject to safeguards preventing double recovery. The claim succeeded in part, with further assessment and directions required for unresolved apartments and heads of loss.