Is it possible to limit or exclude liability in response to claims under the Defective Premises Act? (1) Brenda Vainker and (2) Francois Vainker v Marbank Construction Limited & Others [2024] EWHC 667 (TCC); Jefford J

Background facts

In 1999, Mr and Mrs Vainker (the “Claimants”) purchased a house that was subsequently demolished in 2003 with the intention to re-build a new residential property known as The Croft at Walpole Gardens, Strawberry Hill, Twickenham (the “Property”). The Property was intended for Mrs Vainker to occupy on her retirement.

In 2009, Mrs Vainker met with SCd Architects Limited (“SCd”) and had allegedly outlined, or reasonably made SCd aware of, the following requirements for the design brief for the Property:

1. Environmentally friendly, modern house, using modern building techniques;
2. The Property had to have natural light and space in a calm and peaceful environment to enable her to practise meditation;
3. The Property was to be a home for herself and her two adult children and a base for Mr Vainker when he was in the UK;
4. The Property had to have 5 bedrooms (one for each member of the family);
5. The Property had to be easy to maintain suitable for the needs of someone growing older. The Property had to fall within their budget which was strictly limited by the family’s resources;
6. It was crucial that costs did not get out of control;
7. Mrs Vainker had never built a house before and was wholly reliant on the building professionals who became part of the project and had greater knowledge and expertise.

In mid-2011, the Claimants engaged SCd as Architects for RIBA Stages E-L pursuant to the standard terms of the RIBA Architect’s Appointment 2010 (the “Appointment”) for the re-build of the Property. Clause 7.3 of the Appointment contained a net contribution clause stating that ‘…the liability of the Architect shall not exceed such sum as it is just and equitable for the Architect to pay…’.

On 26 March 2013, Mrs Vainker entered a bespoke JCT Standard Building Contract Without Quantities 2011 with Contractor’s Design Portion (the “Contract”) with Marbank Construction Limited (“Marbank”). Clause 2.1 of the Contract provided that ‘The Contractor shall carry out and complete the Works in a proper and workmanlike manner and in compliance with the Contract Documents…’.

The works began in 2013 with the Property largely designed (and inspected) by SCd and constructed by Marbank. During the works, the Claimants made complaints about the state of the brickwork and water ingress. Practical completion was certified on 15 May 2014, following which the complaints of water ingress continued. After completion, an extensive snagging list was produced, and other defects were alleged, with numerous defects subsequently remedied.

The Claimants issued proceedings on 4 May 2020 alleging multiple defects and bringing claims in tort, contract and under the Defective Premises Act 1972 (“the DPA”) against SCd and Marbank. As part of the case management of the proceedings, the Claimants were directed to set out the defects in the form of a Scott Schedule. The Scott Schedule ran to 64 items which detailed defects in relation to brickwork, glass, Accoya, the green roof, rooflight, Jura worktops and tiles and the brise soleil and the glass balustrades installed throughout the Property. This article focusses on the glass defects as these were the most relevant defects which were considered under the DPA within this judgment.

(i) Defective Premises Act 1972

Section 1(1) of the DPA provides:

“Duty to build dwellings properly

(1) A person taking on work for or in connection with the provision of a dwelling (whether the dwelling is provided by the erection or by the conversion or enlargement of a building) owes a duty –

(a) if the dwelling is provided to the order of any person, to that person; and (b) without prejudice to paragraphs (a) above, to every person who acquires an interest (whether legal or equitable in the dwelling to see that the work which he takes on is done in a workmanlike or, as the case may be, professional manner, with proper materials and so that as regards that work the dwelling will be fit for habitation when completed.”

The Court referred to Rendlesham Estates Plc v Barr Ltd [2014] EWHC 3968 (TCC) which had previously considered the key case law and set principles regarding DPA claims. The application of these principles was largely fact-specific in this case, and the lengthy judgment raises important considerations. The Court found that a duty under section 1(1) of the DPA would be owed to Mrs Vainker by both SCd and Marbank, as the dwelling was provided to her order and that a duty would be owed to Mr Vainker as a person with a proprietary interest in the dwelling.

(ii) Discovery of a patent defect

Marbank had installed toughened glass rather than toughened laminated glass in various locations throughout the Property. For the glass balustrades to the staircases, specification clause L30/552 provided for ‘15mm toughened and laminated glass, Class A to BS 6206’. The Claimants’ case was not that the use of the wrong glass was defective but that it was a patent defect that ought to have been observed by SCd undertaking inspections with reasonable skill and care.

The expert’s joint statement agreed that the toughened glass balustrades deflected or wobbled more than the experts agreed was permitted. Moreover, the Claimants relied on the fact that the toughened glass without a handrail was contrary to Building Regulations and that a reasonably competent architect with inspection duties would have identified that the installed glass was not laminated. Further, the Claimants submitted that the use of toughened glass instead of laminated glass without a handrail rendered the house unfit for habitation, as if the staircase was damaged or failed, then there would be nothing else to hold on to or inhibit a fall. In any event, it was agreed that on the proper construction of the specification and the drawings, the Contract required toughened and laminated glass in the balustrades to the staircase.

Jefford J therefore found that the Property was unfit for habitation under the DPA due to the health and safety risk posed by the inadequacies in the glass balustrades, noting that ‘…if it is damaged or fails there is nothing else to hold on to or inhibit a fall. If laminated the risk would be minimal to non-existent’.

Jefford J stated that ‘[i]t is unlikely that a defect that is only aesthetic or inconvenient would render a dwelling unfit for habitation‘. Jefford J rejected SCd’s arguments that a handrail would be an adequate remedy (see below) and found that ‘[t]he recoverable damages should, therefore, be the cost of making the dwelling fit for habitation in the way it would have been had the services been supplied in a professional manner’.

(iii)  What are reasonable remedial works?

In relation to remedial works, SCd argued that the wholesale replacement of the glass balustrades with toughened laminated glass would be disproportionate to the benefit, and that a handrail could be added to the top of the glass balustrades to prevent falling and ensure compliance with Building Regulation K2 (although the Defendants’ respective architect experts did not explain how this would be achieved). Both Marbank and SCd argued that this was a failure on the Claimants’ behalf to mitigate their losses.

As above, Jefford J rejected SCd’s arguments that a handrail would provide an adequate remedy. Whether the specification had been met was relevant as to whether the works had been undertaken in a professional manner and to defining the reasonableness of remedial works.

Jefford J found that a handrail would not have been an appropriate remedial solution as it would have been ‘wholly contrary to the design intent in the House’. Jefford J also highlighted that ‘[a]lthough the duty under section 1 is construed as a duty to achieve the outcome that the dwelling is fit for habitation, there is a constituent element of the duty which is to see that the work that is undertaken is done in a professional manner.  Where the defendant has failed to see that the work is done in a professional manner and the result is that the dwelling is not fit for habitation, there is nothing in the statute to limit the damages recoverable in respect of the failure to see that the work is done in a professional manner to the minimum necessary to put the dwelling into a habitable condition.  The damages should more naturally reflect the failure to see that the work was done in a professional manner…’

Jefford J ruled that it was reasonable for the Claimants not to allow Marbank to return to remediate the glass balustrades in circumstances where there was a potential issue regarding the fixings, which Marbank refused to properly engage with. Further, the Court noted that the commercial relationship between the parties was relevant as Marbank had issued a Letter of Claim in relation to the final account (which effectively further muddied the position on the remedial works and whether it would be paid to return to the Property). The Court found that failing to provide the Defendant with the opportunity to undertake remedial works is not in itself a failure to mitigate and that the burden of proof is on the Defendant to show that the Claimant failed to take reasonable steps to mitigate their loss.

(iv) Net contribution clauses under the DPA

SCd sought to rely on the net contribution clause contained in the Appointment to limit its liability in respect of the defective glass balustrades to a maximum of 20%. The Claimants argued that (i) the net contribution clause could not exclude or restrict liability pursuant to section 6(3) of the DPA; (ii) the clause did not apply on its proper construction; and (iii) in any event, it required a notional apportionment of liability on the principles in the Civil Liability (Contribution) Act 1978 and SCd had not sought apportionment of liability by Part 20 proceedings.

Further, Jefford J held that SCd’s net contribution clause did not cover this liability as section 6(3) of the DPA provides: ‘Any term of an agreement which purports to exclude or restrict, or has the effect of excluding or restricting, the operation of any of the provisions of this Act, or any liability arising by virtue of any such provision, shall be void’.

Jefford J noted that there was no express limitation of the basis on which liability arises and that were it enforceable the clause would apply to concurrent liability in tort, as Jefford J could “see nothing in the clause would distinguish liability for breach of the DPA and, as a matter of construction, it would apply to that liability”. In any event, the clause was found not to apply due to the application of section 6(3) of the DPA. Jefford J did not comment on whether any attempt to limit liability under the DPA was enforceable.

(vii) Claims in contract and tort

Whilst it was agreed that Marbank’s failure to undertake the works as specified was a clear breach of contract, the parties accepted that any claim in contract in respect of design was time-barred, as all relevant breaches occurred well before practical completion on 4 May 2014 and, therefore, more than 6 years before the commencement of proceedings.

In relation to the claims in tort, SCd also advanced a limitation defence averring that the Claimants had the requisite knowledge of damage before 4 May 2017 when a glass panel exploded. SCd submitted that this event indicated a defect in the Property that would either concern design or construction and/or inspection and therefore would have been the responsibility of either SCd or Marbank or both.

Jefford J found that Mrs Vainker clearly had sufficient knowledge to commence investigations as soon as the glass exploded, which was evidenced from the fact that she had contacted Marbank about the issue. The Court stated that it was for the Claimants to prove that they did not have the requisite knowledge and, on the facts presented, concluded that the Claimants had not done so. The Court found that Mrs Vainker had the requisite knowledge for time to start to run under section 14A of the Limitation Act 1980 and that any claim in tort was time-barred.

Comment

This case confirms and provides guidance on some key topical issues in relation to the application of the DPA. Firstly, it confirms that whilst a defect must be more than only aesthetic or inconvenient for there to be a breach of the DPA, the design intent of the property in question is relevant and that the measure of damages must reflect the intended and likely outcome had the services been provided in a workmanlike or professional manner.

Further, although the application of the extended scope and limitation periods under the DPA, as a result of the Building Safety Act 2022, were not in issue or specifically considered by the Court, the decision provides a refresher on the necessary ingredients required to prove a successful claim under section 1 of the DPA.  Whilst the Court criticised the disproportionate amounts of time generally spent on all defects in a high-level manner, the decision offers a wider interpretation of the DPA than previous cases, as Jefford J’s comments confirm that the duty owed under the DPA potentially extends to a wider pool of types of defects, as opposed to just those that result in unsafe buildings.

The decision also highlights the position that the Court adopts in determining a reasonable award of damages under the DPA and is a reminder that the Court can consider other factors beyond those that restore the dwelling to a habitable condition, including the client’s design briefs/specification and intentions for the project. Further, if an item is likely to deteriorate over time (even if it was not known about at the time), then claimants may point to this being a defect rendering a dwelling unfit for habitation, such that the dwelling was unsafe at practical completion. However, the aggregate effect of all the defects, and their impacts, should be considered on completion and must be judged by reference to the applicable standards at the time (and by reference to all types of persons reasonably expected to occupy the dwelling).

This case also illustrates the Court’s approach to allegations that the Claimant has not mitigated its losses and emphasised that the Claimants must take reasonable steps, which will be relevant to those defending claims arising from the reasonableness of remedial works.

The judgment also affirms the understood position that the wide wording of section 6(3) of the DPA excludes reliance on contractual caps on liability, including net contribution clauses. Whilst the exclusion under section 6(3) of the DPA is clearly worded, this specific point has received limited consideration by the Courts to date, therefore this decision reinforces the principle. This should be borne in mind when considering potential liability and negotiating contracts for projects or claims falling within the remit of the DPA.

The case also helpfully confirmed other important points regarding defects claims, and the application of pre-trial communications and settlements to multi-party litigation, which are not covered in this article and should be reviewed by those involved in any defects claims.