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Jenson v Faux – Scope of Duty under the Defective Premises Act 1972

Date: April 13, 2011

Expertise: Property Damage

1. This morning, the Court of Appeal handed down judgment on the scope of duty owed under section 1(1) Defective Premises Act 1972 (“the DPA”).

2. The judgment is required reading for all construction professionals and any builder involved with domestic dwellings. The decision 3. The Court of Appeal followed a previous unreported Court of Appeal decision of Saigol v Cranley Mansions (06.07.85) and held that the DPA only applied to the provision of a new dwelling.

4. This accorded with the decision of Mr Recorder Rupert Jackson QC (as he then was) in Jacobs v Morton & Partners (1994) 72 BLR 92 (which was not cited in Saigol) that the phrase “provision of a new dwelling”, “connotes the creation of a new dwelling. It does not include rectification of an existing dwelling”.

5. However, in Saigol, Hutchinson LJ (with whom McCowan and Aldous LJJ agreed) said:-

“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.”

6. The Court of Appeal held it was bound by the judgment of the Court of Appeal in Saigol.

7. Therefore, the question was whether on the facts of the case it was arguable that the identity of the refurbished and extended house or dwelling was “wholly different from the old” house or dwelling.

THE FACTS

8. Mr Green purchased a house.

9. He refurbished it by:- (i) extending the loft; (ii) changing the layout of the rooms on the first floor; (iii) extending the kitchen into the side return; and (iv) digging out the coal cellar and excavating a basement room.

10. Mr Faux was involved with the refurbishment works as an interior specialist and project manager.

11. Mr Green sold the refurbished house to Mr and Mrs Jenson.

12. Mr and Mrs Jenson claimed that the basement was not waterproofed properly and prone to flooding.

13. They sued Mr Faux for breach of duty under the DPA.

14. Mr Faux applied for summary judgment on the claim contending that the DPA did not apply to the works.

15. Ramsey J in the Technology & Construction Court refused to grant summary judgment holding that 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.

THE COURT OF APPEAL

16. The Court of Appeal, applying the principles above to the facts of the case held that it was not arguable that the house had, by way of the above works, changed its identity or was a new dwelling, the identity of which was wholly different from the old. 17. Longmore LJ (who gave the lead judgment with which Lord Neuberger MR and Etherton LJ agreed) said:-

“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 works, to my mind, have to be much more substantial than they were in this case before such a grey area was reached.”

18. Further, the extent and cost of the works would not be decisive as there may be cases in which small amounts of work might be needed to create a separate one-floor dwelling which would fall within the DPA. However, conversely, there could be very extensive works to a house or dwelling which would not make it a dwelling whose identity is “wholly different” from before.

19. Longmore LJ also pointed out that there are good reasons that caveat emptor has been the rule for many centuries. Further, buyers are always able to have surveys done.

20. The Court of Appeal allowed the appeal and gave summary judgment for Mr Faux on the Claimants’ DPA claim.

Significance

21. The important decision has wide significance for the construction industry and especially construction professionals.

22. The works carried out in this case were not unusual for the type of refurbishment works often carried out to terraced houses in London.

23. The extension of the DPA to any person who took “on work for or in connection” with the works to an existing dwelling would enable subsequent purchasers to sue any builders or construction professionals for any defect in the works which made the dwelling unfit for habitation. The builders or construction professionals would not be able to rely on the “pure economic loss” defence if sued under the DPA.

24. This is the second time in 18 months that the Court of Appeal has considered the DPA[1]. This demonstrates a renewed interest in the power, but also the limits, of the cause of action under the DPA.

Daniel Crowley of 2 Temple Gardens acted for Mr Faux, instructed by Ben Worthington of Trowers & Hamlins LLP

For further information or a copy of the Judgment please contact the Clerks at 2 Temple Gardens on 020 7822 1200 or clerks@2tg.co.uk

[1] See also Bole v Huntsbuild (2010) 127 Con LR 154

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