Mind the gap: building safety law discrepancy between NI and England & Wales

The recent decision in Ulster Garden Villages Ltd v Farrans (Construction) Ltd [2024] has caused quite a stir. It highlights the current disparity between the law on defective premises in England & Wales, as compared with Northern Ireland, in terms of limitation periods and the protections offered to the residents of buildings where safety issues arise.

The judgment has prompted a Ministerial statement on increased protection for homeowners by the Department for Communities. In his statement to the Assembly expressly referencing this court decision, Minister Gordon Lyons stated that the disparity “places people in Northern Ireland at a clear disadvantage compared with their counterparts in other regions of the UK” and promised an accelerated legislative process to bring the same extended limitation periods into effect in Northern Ireland.

Defective premises legislation

The existing defective premises legislation in both jurisdictions creates statutory duties relating to residential dwellings that must be fit for habitation at the time of completion. The disparity arises from the fact that, as part of the legislative changes resulting from the Grenfell tragedy, sections 134 and 135 of the Building Safety Act 2022 (BSA) have taken effect in England & Wales, but they have no application in Northern Ireland.

In terms of the primary duty, which is to carry out work in a workmanlike or professional manner with proper materials so that the dwelling is fit for habitation at completion, those provisions of the BSA extend the limitation period in England & Wales from 6 to 15 years prospectively for claims accruing after 28 June 2022, and from 6 to 30 years retrospectively for claims that accrued before 28 June 2022.

Clearly, these massively extended limitation periods afford significantly enhanced protection to affected residents in England & Wales, whereas in Northern Ireland, the unamended limitation period means that a claim for breach of the statutory duty under the Defective Premises (NI) Order 1975 (the DPO) faces in most cases a cut off date of 6 years from practical completion of the works.

The decision in Ulster Garden Villages Ltd v Farrans (Construction) Ltd [2024] has placed a spotlight on this issue – it related to an application for strike out of the claim on the basis of limitation ie that the writs were issued more than 6 years after practical completion and so were out of time.

Background

The dispute arises out of the construction of a mixed use development in the centre of Belfast, which included 9 levels of residential flats (level 2 to level 10) known as Victoria Square – practical completion was certified on 5 March 2008.

In February 2019, one of the reinforced concrete structural columns failed causing damage in 2 of the apartments – occupants of the 2 apartments were immediately evacuated, followed by the evacuation of the occupants of all of the apartments on 10 April 2019, due to a risk of further movement in the building. It has been alleged that some remedial works were carried out, but the Plaintiffs have been unable to state by whom and when – the original contractor’s position is that they have not carried out any remedial works.

The lead Plaintiff in these proceedings is Ulster Garden Villages (UGV), that acquired 54 (out of 91) apartments in the premises in September 2011. The other Plaintiffs in this action are individual owners of various apartments in the development. The Defendants include the contractor and the professional team ie the architect, and engineer (the First to Third Defendants). There is no contractual link between the Plaintiffs and the First to Third Defendants, so the claims are both for breach of statutory duty and in negligence.

It is the alleged breaches of statutory duty under article 3 of the DPO relating to defective design and/or workmanship made by the Plaintiffs against the First to Third Defendants that we consider in this review.

The strike out application

As the Court set out, when considering a strike out application, it must consider the Plaintiffs’ case at its height and then assess if it is unarguable – “inevitably a high hurdle”.

The limitation arguments

The text of article 3(1) of the DPO setting out the primary duty (as referenced above) is identical to the text of s1(1) of the Defective Premises Act 1972 which applies in England and Wales. A claim under the DPO however has to be made within 6 years of the date of completion of the works. Here, this would be March 2014, and the Writs in these proceedings were not issued until April 2020 onwards.

The Plaintiffs’ primary argument was that the limitation period for breach of statutory duty restarted as a result of the defective remedial works. It also contended that the later repairs amounted to concealment as a result of which, the limitation period should run from the date of the Plaintiffs’ knowledge of the structural defects, which was when the damage became evident in February 2019.

As set out above however, the Plaintiffs have been unable to say when and by whom the defective remedial works were carried out. The First to Third Defendants argued that, as the Plaintiffs were in occupation from September 2011, the defective remedial works (which they had not undertaken) must have been carried out prior to September 2011, as otherwise the Plaintiffs would have been aware of them. So, it was argued, even if (as the Plaintiff contends) time for limitation purposes ran from the remedial works, the Plaintiffs were out of time anyway, as the Writs were issued at least 8.5 years after the Plaintiffs took occupation, therefore well outside the 6 year period following the alleged remedial works.

Additionally, (it was argued) a fresh cause of action under the DPO for breach of statutory duty will only arise if the remedial works are carried out by the same person/company - this (the contention that the original contractor carried out the remedial works) was denied by the First to Third Defendants and was not even pleaded by the Plaintiffs.

The decision

The Court held that the pleaded case did not disclose a direct cause of action under the DPO which survived the limitation period.

As part of the decision, the Court did not accept the Plaintiffs’ contention that the 6 year limitation period was “reset” as a result of the remedial works. In line with previous case law, there would (in principle) be 2 separate causes of action:

1. one relating to the quality of the original building work in respect of which the cause of action arose when the dwelling was completed; and
2. the other, relating to the quality of the remedial work in respect of which the cause of action arose when the remedial work was finished.

The Plaintiffs’ case on concealment also failed as the pleaded case and evidence did not satisfy any of the 3 requirements set out by the Supreme Court in Canada Square Operations Ltd v Potter [2023]:

“(i) a fact relevant to the claimant’s right of action; (ii) the concealment of that fact from [a claimant] by the defendant, either by a positive act of concealment or by a withholding of relevant information; and (iii) an intention on the part of the defendant to conceal the fact or facts in question”.

The DPO claims were struck out by the Court.

Future extensions of the limitation period

The Minister for the Department of Communities has stated an intention “to ensure the swift passage” of the legislation to bring Northern Ireland into line with England & Wales in terms of the amended limitation periods to protect such residents.

Until the text of the new legislation has been published, the future position of the Victoria Square Plaintiffs’ DPO claims is unclear. In England & Wales, s135(3) of the BSA provides that the new DPA limitation provisions are to be treated as “always having been in force” thus potentially reviving such claims (in that jurisdiction). The potential counter is found in s135(6) which provides that the new limitation periods will not apply to claims settled or finally determined before the new provisions came into effect. In many cases, strike out will be a final determination but query the position where the strike out was based purely on the claim being time-barred?

Looking to England & Wales where s135 took effect on 28 June 2022, we reported here on the Court of Appeal decision in BDW Trading Ltd v AECOM Infrastructure & Environment UK Ltd [2022]. This is now being appealed to the Supreme Court to be heard in December 2024, and one of areas of consideration is the meaning and effect of s135 of the BSA.

If the Northern Ireland legislation mirrors s135 BSA, that Supreme Court decision will be pivotal in terms of such claims. Meanwhile however, we await sight of the draft legislation and the Assembly’s consideration of the proposed text. This will be of particular interest to construction professionals and their insurers in terms of the ambit of historic building safety claims that may arise once the new legislation takes effect.