The Dodgy Chimney: or how a claim can go up in smoke

Contract claims must be commenced within 6 years of any breach, whereas claims in tort (i.e. where a breach of duty of care is alleged) must be commenced within 6 years of the date of the damage.

There is, though, an extension for latent defect claims, where a claim in tort can be commenced within 3 years of discovering the damage (or when the claimant knew or ought to have known about the damage). However, this is subject to a maximum limitation period of 15 years from the date the damage occurred.

The practical effect is that if a building owner has lost his chance to pursue a contract claim against the contractor, he may still be able to claim in tort.

This principle is discussed in Robinson v P E Jones (Contractors) Limited.

Jones built a house for Mr Robinson. The sale was completed in April 1992. During construction Mr Robinson requested an additional gas fire. Jones therefore built an extra chimney and engaged British Gas to install the fire.

In September 2004 British Gas serviced the fire which failed a safety test due to a defective flue. Mr Robinson and Jones were unable to reach a settlement over this issue. Mr Robinson therefore issued court proceedings in December 2006 arguing that Jones owed him a duty to take reasonable care to ensure that the chimney flue was constructed in accordance with good building practice and/or in accordance with Building Regulations. The cost of rebuilding the flue was put at £35,000.

Mr Robinson relied on the 3 year extension rule as a claim under the contract was out of time.

The Court had to deal with a number of issues and made the following findings:

•this was a claim for “economic loss”, i.e. for the cost of rebuilding the chimney;
•it was possible for a building contractor to owe a duty both under the contract and in respect of economic loss;
•in this case Jones did not owe a duty of care to Mr Robinson because Jones had limited its contractual liability to the extent set out in the NHBC Certificate. Jones had therefore excluded liability for tort, and this was not “unreasonable” under the Unfair Contract Terms Act (UCTA);
•had Jones owed Mr Robinson a duty of care in tort, the claim was not time barred because the claim was commenced within 3 years of Mr Robinson becoming aware of the damage.

Mr Robinson’s appeal was dismissed primarily on the basis that Jones had effectively excluded liability for tort. Both parties had been represented by lawyers when the contract had been entered into and so it could not be argued that Jones had assumed any responsibility to Mr Robinson beyond that agreed in the contract.

COMMENT: This decision is important because it demonstrates that building contractors can owe concurrent duties in both contract and tort. It also confirms that to recover “economic loss” there must have been an assumption of responsibility by building contractor not to cause such loss. The Court was therefore reluctant to allow a claim in tort to impose duties or obligations on a party which were greater than those agreed in the contract.

Importantly, building contractors can exclude liability in tort providing such a limitation of liability satisfies the UCTA test of reasonableness.