England and Wales Court of Appeal (Civil Division) Decisions

IN THE HIGH COURT OF JUSTICE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
THE HONOURABLE MR JUSTICE RAMSEY

		Royal Courts of Justice Strand, London, WC2A 2LL
		13/04/2011

Lord Justice Longmore:

Introduction

1. Before 1^st January 1974, it was generally considered that a purchaser of a house had no remedy in respect of defects against either his vendor (unless the agreement stipulated otherwise) or against any person doing work at the house before the date of the purchase, see Lynch v Thorne [1956] 1 WLR 303.
2. Many thought that this state of affairs was unsatisfactory particularly if (as in Lynch v Thorne) the builder was himself the vendor. The Law Commission considered the matter and produced a report in which they recommended that persons who take on work for or in connection with the provision of a dwelling should owe a duty, to the person to whom the dwelling was provided and to any person who later acquired any interest in the dwelling, to see that the work he takes on is done in a workmanlike or professional manner. But the person who took on such work and owed such duties had to be a person taking on work for or in connection with "the provision of a dwelling". If he did not provide a dwelling, he was not to be under this new duty. As a result of this recommendation, Parliament enacted the Defective Premises Act 1972 ("the 1972 Act").

The Facts

3. Mr and Mrs Jenson are the freehold owners and occupiers of a residential property at 105 Leathwaite Road, Battersea, London SW11 6RN, which they purchased from a Mr Green in November 2007. At the time of purchase it had a basement converted out of a coal cellar, a ground floor, a first floor and a loft.
4. In 2003 Mr Green arranged for works to be carried by the defendant who provides services as an interior specialist and project manager. These works were carried out between October 2003 and April 2004. The defendant did not actually do the work himself but it is accepted that he "took on work for or in connection with" the house in Leathwaite Road within the meaning of the 1972 Act.
5. Mr Green in a witness statement describes the scope of the works as follows:-

i) The loft area was re-modelled and extended to support a new glass structure and skylights containing an office and guest bedroom;

ii) the first floor was re-modelled to change a bedroom into a second bathroom; this involved the replacement of all internal partitions and, while work on the basement was done, the demolition of a bedroom in order to relieve the load on the kitchen and basement below;

iii) the ground floor works consisted of gutting the floor in its entirety and replacing the kitchen replacing over a bigger area; this was done by removing internal partitions and replacing part of the external (southern) wall of the house with a new cavity wall;

iv) by way of replacing the coal cellar, a new basement was excavated to create a large space with shower room/WC and a washing/laundry room, cinema screen and indoor gym. There was internal and external access to the basement.

6. Mr and Mrs Jenson claim to have suffered loss as a result of damage caused by flooding to the new basement area, allegedly due to problems concerning the waterproofing applied to the basement; they allege that the waterproofing applied to the basement was defective because the basement was subject to repeated water penetration. They accordingly began proceedings against the defendant (with whom they had, of course, no contract) pursuant to the 1972 Act.
7. The defendant issued an application for summary judgment maintaining that s. 1 of the 1972 Act only applies to the provision of a new dwelling and on the facts here the house was the same dwelling both before and after the works; the defendant did not therefore provide a dwelling for the purpose of owing the duties set out in the 1972 Act.
8. The judge held that the question whether the defendant had provided a dwelling was a question of fact and degree, unsuitable for summary determination because it could arguably be maintained that the identity of the new dwelling was different from the identity of the old dwelling. There is now an appeal brought with permission of Tomlinson J.

The Law

9. Section 1(1) of the Act provides:-

"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 paragraph (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 … so that as regards the work the dwelling will be fit for habitation when completed."

10. Cases on the relevant part of this section exist but are not easy to find. In the unreported case of Saigol v Cranley Mansions (6^th July 1995), Mrs Saigol had extensive alterations done to her 5^th floor flat in the block of flats known as Cranley Mansions. One of the many questions debated was whether, if the relevant defendant had done the works, he owed the duty set out in section 1(1) of the 1972 Act. Hutchison LJ (with whom McCowan and Aldous LJJ agreed) said at pages 32-33:-

"It appears to me that, as a matter of construction, the section is directed to the provision of a new building…

It seems to me, as I have already said, that the meaning of sub-section (1) is clear. The Act applies to provision of a dwelling whether by erection or the conversion or enlargement of a building. The contrast between the words I have emphasised indicates that a new dwelling is contemplated. Had the draftsman intended that the Act should apply to the enlargement of an existing building he would have said so. The provision of which the Act speaks is the provision of something – a dwelling – which has not existed before."

11. He proceeded to reject the argument that "enlargement of a building" included "enlargement of a dwelling" and continued:-

"Had the sixth floor been enlarged or converted so as to produce a separate flat then the Act would have applied to that work. Moreover, one can envisage a case in which the works to an existing dwelling were so extensive as to justify the conclusion that they had provided a new dwelling, the identity of which was wholly different from the old: but that is not the case here."

12. Apparently unknown to the Court of Appeal in Saigol, Mr Recorder Rupert Jackson QC (as he then was) had come to the identical conclusion in Jacobs v Morton (1994) 72 BLR 92 saying (page 105) that the phrase "provision of a dwelling":-

"connotes the creation of a new dwelling. It does not include rectification of an existing dwelling."

13. These authorities seem to have escaped the attention of this court in Bayoumi v Protim Ltd (unreported) 6^th November 1996 and the current editors of Clerk & Lindsell, Torts 20^th edition para 8-130 where it is said that the duty imposed by section 1 of the Act is owed "in respect of both new construction and improvements" but both parties agreed that we were bound by the judgment of this court in Saigol. Accordingly the question is whether on the facts of this case it is arguable that the identity of the refurbished and extended house or dwelling is "wholly different from the old" house or dwelling.

The Arguments

14. Mr Crowley submits that there is, on any view, no new dwelling on the facts of this case and that it would not be open to a judge at trial to conclude that there was.
15. Mr Sampson submits that the works to the property were so extensive that after the works were completed the property had changed to such an extent that it could be considered a new dwelling, the identity of which was wholly different from the old dwelling. He (rightly) did not submit that the basement was itself a new dwelling because it was never designed or intended to be a separate or self-contained dwelling, but he did say that the fact that the works in the basement were the main works and were an essential part of the whole works must (arguably) lead to the conclusion that a new dwelling had been provided.

Discussion

16. We naturally asked Mr Sampson what, if any, facts were in dispute and what further evidence, if any, there could be if there was a trial. In answer to these questions he said that, while Mr Green had said that save for the extension of the kitchen by 1m x 3m the footprint of the house was identical, that was not so because the side of the house had been extended by about 10 metres and the cellar had been extended in area to be 533% of its former size so that it was now the whole area of the house. He produced a clearer photograph than any in our bundles taken from the south-east corner of the house showing the extent of the new work (and in particular the new brick work) to the side extension and the loft. He accepted that the outward appearance of the front of the house (the west side) was the same as before but submitted that a new dwelling could be provided even if the façade was preserved; the truth was that the house had been completely hollowed out and instead of being an ordinary two-storey south London house it had become 4 storeys of luxury accommodation.
17. I am acutely conscious that Ramsey J, a TCC judge of very considerable experience, has decided that it is arguable that the works constituted the provision of a new dwelling "in terms of the identity being changed". But I have to say that I do not think that it is arguable. To say that this house at 105 Leathwaite Road in Battersea has changed its identity or (to use the phrase of Hutchison LJ) is "a new dwelling, the identity of which was wholly different from the old" just does not seem to me to be right. The issue is more of a metaphysical issue than an issue which could helpfully be resolved by the assistance of expert evidence and (to do him justice) Mr Sampson did not suggest expert evidence was required. There is no doubt a grey area within which it would genuinely be arguable that a dwelling had so changed that it had a different identity from before but works of extension or refurbishment would, to my mind, have to be much more substantial than they were in this case before such a grey area was reached.
18. Here there were undoubted changes to the existing loft and the existing cellar to create considerably more space than existed before, but the ground floor and the first floor were approximately the same in area and had much the same use as before. Even if a whole new floor had been added (which it was not) it could not be said that (for that reason alone) a "new dwelling" had been provided. The extent and cost of the works (we were told that they cost £400,000 in 2007) will not, in any event, be decisive. There may be cases in which a small amount of work might be needed to create a separate one-floor dwelling which would thus fall within section 1 of the 1972 Act; but there can be very extensive works to a house or dwelling which will not make it a dwelling whose identity is "wholly different" from before.
19. I am unpersuaded that a trial judge would be in any better position to determine whether a new dwelling was provided by the defendant than we now are (or indeed than Ramsey J was). The issues of disputed fact identified by Mr Sampson are no more than peripheral and the idea (mooted by him) that he might want to cross-examine Mr Green about the extent to which the footprint of the house had changed seems inherently unlikely when there are already photographs and detailed before and after drawings. If (as I believe) it would not be open to a judge, on the basis of the evidence likely to be available to him at trial, to conclude that the defendants had provided a new dwelling, it is better so to decide now rather than allow parties to incur yet more expense.
20. It will not be at all often, that, if a judge of a specialist court decides that a case is arguable, this court will disagree. Here the judge was allotted an hour and a half to determine not merely this issue but also an issue about representation. We were allotted a half day for the argument, where the law by which we are bound is clear, and we could afford (if at first somewhat reluctantly) the luxury of detailed consideration of photographs and plans. In these somewhat unusual circumstances I have come to the conclusion that what may have appeared to be arguable to the judge (on a no doubt busy day with other cases in his list) is not in truth arguable and that this court should, therefore, face up to that fact and so decide.
21. I appreciate that this outcome will be a disappointment to Mr and Mrs Jenson but there are good reasons why caveat emptor has been the rule in house purchases for many centuries. Buyers are always able to have surveys done as Mr and Mrs Jenson did in this case.
22. I would allow this appeal.

Lord Justice Etherton:

23. I agree.

Master of the Rolls:

24. I also agree.