Wilkinson v Ardbrook Homes Ltd

• Jurisdiction: Ireland
• Judge: Ms. Justice Baker
• Judgment Date: 22 July 2016
• Neutral Citation: [2016] IEHC 434
• Court: High Court
• Docket Number: [2014 No. 5957 P]
• Date: 22 July 2016

BETWEEN

SPENCER WILKINSON, EMILY HURLY-WILKINSON,

JOSHUA HURLEY-WILKINSON (A MINOR SUING BY HIS MOTHER AND NEXT FRIEND EMILY HURLY-WILKINSON)

AND

BENJAMIN HURLEY-WILKINSON (A MINOR SUING BY HIS MOTHER AND NEXT FRIEND EMILY HURLY-WILKINSON)

PLAINTIFFS

AND

ARDBROOK HOMES LIMITED, PADDY MCGEE (WEXFORD) LIMITED, NATIONAL HOUSE BUILDING GUARANTEE COMPANY LIMITED TRADING AS HOMEBOND

AND

MHL & ASSOCIATES LIMITED

DEFENDANTS

[2016] IEHC 434

Baker J.

[2014 No. 5957 P]

THE HIGH COURT

Tort – Damages & Restitution – Contract – Defects in dwelling – Contract of warranty – Breach and negligence of contract obligations – Practice & Procedures – O. 19, r. 28 of the Rules of Superior Courts – Exclusion of liability – Striking off the proceedings – Exercise of inherent jurisdiction

Facts: The plaintiffs had filed proceedings for damages for personal injuries against the defendants on account of the defects in residential premises purchased by the plaintiffs against the defendants. The first and second named plaintiffs entered into a building contract with the third named defendant for the construction of family home, which they had to vacate due to alleged serious defects. The first and second named plaintiffs also sued the third named defendant for breach of contract. The third named defendant now sought an order to strike out the proceedings against it on the ground that it was bound to fail and invoked inherent jurisdiction of the Court as well as o. 19, r. 28 of the Rules of Superior Courts. The essence of the plaintiffs' allegations was that the third named defendant negligently issued a certificate of completion which had rendered the third named defendant liable for breach of contract and further for damages.

Ms. Justice Baker by exercising its inherent jurisdiction struck out the claim of the plaintiffs against the third named defendant in the proceedings, on the grounds that the claim was bound to fail. The Court held that where a claim was the one founded wholly in the contract and the contract itself excluded liability for such negligence, the claim was liable to be dismissed. The Court held that the claim filed by the plaintiffs arose from the contract and the contractual obligation, which excluded itself from the liability claimed and it did not pertain to any collateral contract, misrepresentation or assumption of any additional or special duty arising out of the contractual obligations. The Court held that in the absence of plea of being unaware of the limited liability clause specified in the third named defendant's guarantee or warranty contract, it was certain that the plaintiffs were well aware of it and had entered into the contract with the third named defendant at their own. The Court held that in the present case, it was necessary for the Court to exercise its inherent jurisdiction to strike out the proceedings, as the continuation of the proceedings would result in cost and expenditure to the third named defendant associated with the claim of the plaintiffs. The Court observed that its jurisdiction to dismiss a case under o.19, r. 28 of the Rules of the Superior Courts was distinct than the inherent jurisdiction. The Court held that while exercising its jurisdiction under the said o.19, the Court was restricted to an analysis of the claim as pleaded and ascertained whether those pleaded matters would likely succeed at trial while under the inherent jurisdiction, the Court had discretion to look beyond and examine the documentary evidence when it governed the legal rights and obligations of the parties.

JUDGMENT of Ms. Justice Baker delivered on the 22nd day of July, 2016.

1 The plaintiffs have brought proceedings seeking damages for personal injuries against each of the four defendants arising from the purchase of a residential property in a scheme of residential units in Mallow, Co. Cork. The first and second plaintiffs are husband and wife, and third and fourth plaintiffs are their children. The parents entered into a building contract for the construction of what was to become their family home on 13th November, 2006, and as a result of what they say are very serious defects in the premises, the family has vacated the house and claim to have suffered personal injuries consequent upon the damp condition of the house.

2 This judgment is given in a motion by the third defendant, the National House Building Guarantee Company Limited trading as HomeBond ('HomeBond'), which provided a warranty to the purchasers in respect of the construction of the premises. HomeBond seeks an order that the action against it be struck out on the ground it is bound to fail, and invokes the inherent jurisdiction of the court as well as O. 19, r. 28 of the Rules of the Superior Courts.

3 The first and second plaintiffs also commenced breach of contract proceedings against HomeBond and the other defendants under the building agreement in which HomeBond is sued on foot of the guarantee or warranty issued to those plaintiffs on 4th October, 2006.

4 The personal injuries summons issued on 8th July, 2014, after the plaintiffs had obtained an authorisation to commence the proceedings from the Personal Injuries Assessment Board.

The claim as pleaded

5 The claim against HomeBond in these proceedings is made in breach of contract and negligence, and is expressly linked to what is described as a 'warranty in relation to the building in respect of major structural defects'. Personal injuries, loss, damage, inconvenience and upset are claimed to have been suffered by the plaintiffs by reason of the breach of contract and negligence of HomeBond, its servants or agents, and the particulars of negligence pleaded are that HomeBond failed:

(a) To provide cover in line with the HomeBond guarantee in circumstances where a major structural defect exists and where the plaintiffs have complied with all notification requirements under the said HomeBond agreement.

(b) To properly certify adequately or at all the foundations of the dwelling before the concrete was poured.

(c) To certify adequately or at all the roof construction of the dwelling by wrongly issuing the final completion certificate.

6 Certain facts are not in dispute. HomeBond provided the warranty and a HomeBond engineer or architect inspected the laying of the foundations and certain other structural works in the course of construction, and thereafter issued a final notice and the written warranty. The primary fault with the premises relates to defective foundations and has resulted in significant damp penetration. HomeBond issued a certificate before the sale closed and the building contract was completed by the parties thereto. Significant structural repair work, possibly including demolition and reconstruction, will be required and the plaintiffs have abandoned the dwelling by reason of health concerns.

7 The plaintiffs claim, in particular, that HomeBond did not merely approve the drawings but engaged in an active inspection of the premises in the course of construction and that the certificate provided by it must be seen in that context.

8 In the present application, I propose, in line with the authorities, to assume that the defects in respect of which the plaintiffs claim are in whole or in part covered by the structural warranty provided by HomeBond.

The HomeBond guarantee

9 The HomeBond guarantee gives a degree of comfort to purchasers of newly built dwellings, and provides a warranty limited to €200,000 in respect of structural defects that become apparent in a newly built dwelling within ten years of the date of the bond. The HomeBond guarantee is part of the general legal framework put in place on the purchase of a newly built dwelling, and the HomeBond guarantee is furnished in the course of the conveyancing transaction and is usually processed through the solicitors for the purchaser. A builder must seek approval from HomeBond, and a builder or developer becomes a member of HomeBond once it satisfies certain conditions of registration. It is not doubted that HomeBond did provide the guarantee for the structural works in question or that the builder was a member of the HomeBond scheme. As part of the documentation provided by the builder or developer the plaintiffs obtained the benefit of the guarantee or warranty.

10 Certain provisions of the HomeBond guarantee are relevant to this action. Clause 3.6(b) of the agreement provides, under the heading 'Exclusions from/Limitations to liability - Major Defects', the following exclusion of liability:

'Neither HomeBond nor its servants or agents shall have any liability whatsoever (and irrespective if how it arises) to a purchaser in relation to any claim for damages, expenses or other compensation relating to any act or omission concerning the dwelling. In particular, HomeBond shall have no liability in relation to:

• any negligence or default in inspecting (or failing to inspect a dwelling); or

• investigating a purchaser's complaint.'

11 It is important to note in the context of this judgment that no argument was made by the plaintiffs that this limitation does not operate against them.

12 When the building works were deemed to be complete, HomeBond issued what was called a Final Notice (the 'Final Notice') which contained the following:

'This Notice is subject to the Terms and Conditions of the HomeBond Agreement and neither HomeBond nor its servants or agents shall accept any liability for any negligence or default in inspecting or failing to inspect the Dwelling in respect of the issue or contents of this Notice, in investigating complaints, or otherwise howsoever or whatsoever.'

13 The guarantee or warranty, therefore, in its express terms was limited to the provision of a warranty in respect of structural defects and expressly excluded any claim for damages arising, inter alia, from the issuing of the...