Supreme Court Revisits Limitation Periods In Property Damage Claims

Author:Mr Kevin Harnett and Rachel Kemp
Profession:Maples and Calder
 
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The Supreme Court recently unanimously upheld a decision of the Court of Appeal relating to when time begins to run on the six year limitation period for claims in negligence for property damage. The case1 represents an important development of the applicable principles in this frequently contested area of construction cases.

Background and Facts

The plaintiff developers sued the defendants (a ground works contractor and civil engineer) for what was said to be their negligence in constructing and certifying the construction of the foundations of two properties in Galway. The foundations were completed in March 2004 and were certified as compliant and structurally sound in September 2004. Cracks in the walls of the properties were observed in December 2005 and proceedings were issued in November 2010.

The defendants pleaded that the plaintiffs' claim was statute-barred as the proceedings had not been issued within six years from the date that the plaintiff suffered damage due to the defendants' negligence.

The critical issue to be determined was the date on which the plaintiffs suffered damage, such that a cause of action in negligence accrued. The Statute of Limitations 1957 provides that proceedings for negligence must be commenced within six years of the accrual of the cause of action.

High Court and Court of Appeal

In the High Court, Mr Justice Kearns, held that the plaintiffs' proceedings had not been instituted within the statutory time limit and dismissed the claim. He concluded that the damage was suffered and the cause of action had accrued at the date of the laying of the foundations in March 2004 and thus the proceedings had to be issued within 6 years of that date. He referred to the relevant Irish decisions in this area which firmly excluded a discoverability test in assessing the accrual of a cause of action in negligence.

The Court of Appeal reversed this decision and held that damage was suffered by the plaintiffs in December 2005, the date on which the cracks were observed, rather than at the date of the installation of the defective foundations in March 2004. The cause of action therefore accrued as of December 2005 and the plaintiffs' claim was issued in time. This decision was then appealed to the Supreme Court by the defendants.

The Supreme Court

The Supreme Court recognised five distinct points in time at which the clock might run for limitation purposes in such property damage claims:

The date of the wrongful act; The...

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