The Building Control (Amendment) Regulations 2014

1. The Building Control (Amendment) Regulations 2014 Fiona Forde B.L. The Law Library B.A. B.A.I. Mechanical & Manufacturing Engineering MSc.Construction Law and Dispute Resolution Postgrad. Dip. Construction Law & Contract Administration

2. Professional Negligence of Consultants Topics • Builders’ Liability • Negligence / Contract • Damages • Homebond • Building Control (Amendment) Regulations 2013 • Negligent Misstatement • Designers’ Liability • Building and Defects Claims • Building Control (Amendment) Regulations 2013 • Joint and Several Liability

3. Builders’ Liability Fiona Forde B.L. The Law Library B.A. B.A.I. Mechanical & Manufacturing Engineering MSc. Construction Law and Dispute Resolution Postgrad. Dip. Construction Law & Contract Administration

4. Builders’ Liability In the absence of words to the contrary there is to be implied: “…a threefold undertaking by the builder: (i) that the builder will do work in a good and workmanlike manner (ii) that he or she will supply good and proper materials; and (iii) that the house, built or to be built will be reasonably fit for human habitation.” Salmond & Heuston (19th edn) p 329 citing Billyack v Leyland Construction Co Ltd [1968] 1 WLR 471 and McGeary v Campbell [1975] NI 7

5. Builders’ Liability Negligence & Contract Existence of a contract between the builder and the owner does not mean that the owner’s rights are confined to contract: the owner may also in appropriate cases sue in tort. “I do not think that the existence of a contract of tenancy, or of liability under that contract, excludes liability in negligence. Liability under both heads may exist simultaneously: this Court so held in Finlay v Murtagh” Henchy J Siney v Dublin Corporation [1980] IR 400 at 412

6. Builders’ Liability  Negligence & Immunity Gallagher v N McDowell Ltd [1961] NI 26 • Dwelling house was erected by the defendants, a firm of building contractors, for the Northern Ireland Housing Trust. It was inspected by the Housing Trust’s architect and the plaintiff’s husband was the first tenant. • The plaintiff was injured when the heel of her shoe went through a floor board. • The floor board, when being laid had a defect which had been improperly repaired by the insertion of a plug of wood which gave way under the Plaintiff’s heel. • The Court of Appeal, reversing the trial judge, held that the defendants were under a duty to the plaintiff, as a lawful user of the house they had constructed, to take reasonable care in the repair of the hole in the defective floor board. • Lord McDermott LCJ held that while the immunities of vendors and lessors were well established, they must be confined to vendors and lessors: others could be liable for defects in realty.

7. Builders’ Liability Negligence & Immunity Dutton v Bognor Regis UDC [1972] 1 QB 373 • A builder applied for and received planning permission to erect a detached house on a piece of leasehold land owned by him. • During the course of construction, the foundations were inspected by an officer of the Urban District Council who negligently certified that the foundations complied with local byelaws. • The house was completed and was sold by the builder / owner to a Mr. Clarke in January 1960. • In December 1960 Mr. Clarke sold the house to the Plaintiff. • Some months later the house began to subside because of defects on the foundations.

8. Builders’ Liability Dutton v Bognor Regis UDC [1972] 1 QB 373 • The Plaintiff brought an action against the builder and against the council for negligence • However Lord Denning MR and Sachs LJ intimated that the immunity conferred on the builder / vendor of a house no longer existed.

9. Builders’ Liability Anns v Merton London Borough Council [1978] AC 728 • The owners of the property built seven maisonettes which they let in 1962 on long leases. • In 1970 structural defects manifested themselves in the buildings and the plaintiffs sued the builder/ owners. • They also sued the borough council for negligence in approving the foundations on which the block was erected and failing to inspect the said foundations. • Some of the Plaintiffs were original lessees, others held an assignment from original lessees. • The House of Lords, in respect of the supposed immunity enjoyed by the builder/vendor or lessor at common law, agreed with the Court of Appeal in Dutton’s case.

10. Builders’ Liability Anns v Merton London Borough Council [1978] AC 728 “That immunity, as I understand it, rests partly on a distinction being made between chattels and real property, partly upon the principle of “caveat emptor” or, in the case where the owner leases the property, on the proposition “for fraud apart there is no law against letting a tumbledown house”. But leaving aside such cases as arise between contracting parties, the terms of the contract have to be considered … I am unable to understand why this principle or proposition should prevent recovery in a suitable case by a person who has subsequently acquired the house, on the principle of Donoghue v Stevenson: the same rules should apply to all careless acts of a builder: whether he happens to also own the land or not. I agree generally with the conclusions of Lord Denning MR on this point (Dutton’s case). In the alternative, since it is the duty of the builder (owner or not) to comply with the byelaws, I would be of the opinion that an action could be brought against him, in effect for breach of statutory duty by any person for whose benefit or protection the byelaw was made. So I do not think that there is any basis here for arguing from a supposed immunity of the builder to immunity of the council.”

11. Builders’ Liability  Damages In Colgan v Connolly Construction Company (Ireland) Ltd [1980] ILRM 30 (HC) the plaintiff, who was the second owner and occupier of a dwelling house sued the defendant building company for damages in respect of defects in the dwelling house. McMahon J stated: “I am satisfied….that the principle of Donoghue v Stevenson applies to the relationship between the builder of a house and a subsequent occupier so as to entitle the occupier to recover damages against the builder for personal injuries caused by defects in the house which are attributable to the negligence of the builder and which are not discoverable by the kind of examination which the builder could reasonably expect the occupier to make before occupying the house.”

12. Builders’ Liability Damages Colgan v Connolly Construction Company (Ireland) Ltd [1980] ILRM 30 (HC) Held: • The plaintiff would be entitled to damages for personal injuries caused by defects in the building and damages in respect of expense incurred in removing “defects in the dwelling which threaten the health and safety of the occupier”, if such damages arose (which in this case they did not). • However in the case of defects of quality which did not pose a threat to the health or safety of the occupier, the court held that the liability of the builder rested in contract only. • Accordingly the plaintiff in the Colgan case was not able to recover damages for defects in the internal plaster or for defects in the porch roof. • Defects in the main roof of the dwelling were recoverable in so far as they could easily result in personal injury.

13. Builders’ Liability Damages Anns v Merton [1978] A.C. 728 Junior Brooks v Veitchi [1983] 1 AC 520 However in the UK the law had developed with the decisions of Anns v Merton and Junior Brooks v Veitchi [1983] 1 AC 520 where the House of Lords held that it was appropriate to compensate Plaintiffs for non-dangerous, qualitative defects in the house the Plaintiffs had purchased, occasioned by the builder’s negligence.

14. Builders’ Liability Anns v Merton [1978] A.C. 728; • Opened the door to a flood gate of tortious claims in the UK involving defective building work. • Low threshold for claims set by Wilberforce LJ stating: “The damages recoverable include all those which foreseeably arise from the breach of the duty of care… these damages may include damages for personal injury and damage to property. In my opinion they include damage to the dwelling house itself.”

15. Builders’ Liability Damages Ward v McMaster [1985] IR 29 (HC) Costello J • Approved the Anns/Junior Brooks approach to damages in a decision which was not challenged in the Supreme Court on appeal. • Moved away from Colgan on the basis that it had been handed down before Junior Brooks v Veitchi which changed the law in the UK.

16. Builders’ Liability Damages Ward v McMaster [1985] IR 29 • The plaintiffs, a married couple, purchased a house from McMaster and moved into possession in 1981. Shortly thereafter they discovered that the house was grossly substandard, structurally unsound, a source of danger and a risk to health. • They vacated the house and sued the vendor/ builder, the local authority (for breach of statutory duties) and the auctioneer who valued the property for the local authority.

17. Builders’ Liability Damages Ward v McMaster [1985] IR 29 (HC) Having examined the holding in Junior Brooks, Costello J concluded: “There is no doubt that this case has extended the liability of a builder for loss sustained by defective workmanship. I find its reasoning persuasive and I have no difficulty in applying it. It follows from it that the concept of reasonable foresight is one to be employed not only in deciding in a given case whether a duty of care exists, but also can be employed in determining its scope. Applying this concept to the present case it seems to me that the duty of care which the defendant owed to a purchaser of the bungalow which he built was one relating to hidden defects discoverable by the kind of examination which he could reasonably expect his purchaser to make before occupying the house….”

18. Builders’ Liability Damages Ward v McMaster [1985] IR 29 (HC) “…. But the duty was not limited to avoiding foreseeable harm to persons or property other than the bungalow itself (that is a duty to avoid dangerous hidden defects in the bungalow) but extended to a duty to avoid causing the purchaser consequential financial loss arising from hidden defects in the bungalow itself, (that is a duty to avoid defects in the quality of the work). It seems to me that the defendant should have foreseen that if he caused the bungalow to be so badly constructed as to force the plaintiff and his wife to leave it that this would cause them both inconvenience and discomfort and so he owed a duty both to the plaintiff and his wife not to cause hidden defects which would result in such inconvenience. This conclusion is consistent with the decision of the Supreme Court in Siney in which the Court upheld an award of damages in negligence to the plaintiff and his family for the inconvenience that each suffered.” Costello J [para. 44]

19. Builders’ Liability Damages “These developments justify me in holding that in this country as in England, the immunity in tort of a builder who owns the land on which the house is built and who subsequently sells it to a purchaser (or who lets it to a lessee) no longer exists. And I am satisfied both on principle and on authority that in this case the first named defendant when building the bungalow owed a duty of care to the person to whom he might subsequently sell it, based on the neighbour principle established in Donoghue v Stevenson. There are no facts arising under contract or otherwise that require that that duty should be restricted or limited in any way …” Having examined the existing authorities Costello J Ward v McMaster [1985] IR 29 at 42

20. Builders’ Liability Damages: The Present Position in the UK • Yet in Britain subsequent to Ward v McMaster, the House of Lords in D&F Estates Ltd v Church Commissioners [1989] AC 177 and even more emphatically in Murphy v Brentwood DC: isolated and essentially repudiated Junior Brooks • A once off exceptional decision • Based on the particularly close proximity between the parties • Clear reliance on the defendant’s expertise.

21. Builders’ Liability Damages: The Present Position in the UK Murphy v Brentwood District Council [1991] 1 AC 398 (HL) • Also in Murphy the House of Lords explicitly overruled its earlier decision in Anns and to classify damages directly sustained as a result of defective building work as economic loss which in only extremely limited circumstances could be recoverable. • In the absence of a “special relationship” giving rise to an assumption of responsibility between the parties, recovery was now normally restricted to damages arising from actual physical injury to persons or to property other than the property that was the subject of the alleged negligence.

22. Builders’ Liability Damages: The Present Position in the UK Murphy v Brentwood District Council [1991] 1 AC 398 (HL) Oliver LJ: “I have found it impossible to reconcile the liability of the builder propounded in Anns with the previously accepted principles of the tort of negligence and I am able to see no circumstances from which there can be deduced a relationship of proximity such as to render the builder liable in tort for pure pecuniary damage sustained by a derivative owner with whom he has no contractual or other relationship.”

23. Builders’ Liability Damages: The Present Position in the UK Robinson v RE Jones Contractors Ltd [2010] EWHC 102 (TCC) Judge Davies held that a builder entering into a contract with a first time buyer that incorporated a requirement to employ all reasonable skill and care was enough to ground a finding that the requisite “special relationship” or tortious relationship of proximity existed between the parties. This appeared to offer a first time buyer statute barred in contract an opportunity to rely on the existence of the contract to ground the basis of the tortious duty of care and in particular support a claim for economic loss against the builder. 

24. Builders’ Liability Damages: The Present Position in the UK Robinson v RE Jones Contractors Ltd [2010] EWHC 102 (TCC) However the Court of Appeal overturned Judge Davies Murphy v Brentwood followed with Jackson LJ stating “The law does not automatically impose upon every contractor or sub-contractor tortious duties of care co-extensive with the contractual terms and carrying liability for economic loss. Such an approach would involve wholesale subordination of the law of tort to the law of contract.”

25. Builders’ Liability Damages: The Present Position in the UK Robinson v PE Jones Contractors Ltd [2010] EWHC 102 (TCC) Lord Justice Jackson, giving the leading judgment, said: “Absent any assumption of responsibility, there do not spring up between the parties duties of care co-extensive with their contractual obligations. The law of tort imposes a different and more limited duty upon the manufacturer or builder. That more limited duty is to take reasonable care to protect the client against suffering personal injury or damage to other property. The law of tort imposes this duty, not only towards the first person to acquire the chattel or building, but also towards others who foreseeably own or use it.” Robinson v Jones, note 1, para 68.

26. Builders’ Liability Damages: The Present Position in the UK Robinson v PE Jones Contractors Ltd [2010] EWHC 102 (TCC) He qualified this, saying: “If the matter were free from authority, I would incline to the view that the only tortious obligations imposed by law in the context of a building contract, are those referred to in [the paragraph above]. I accept, however, that such an approach is too restrictive. It is also necessary to look at the relationship and the dealings between the parties, in order to ascertain whether the contractor or sub-contractor “assumed responsibility to his counter-parties, so as to give rise to Hedley Byrne duties” Robinson v Jones, note 1, para 82.

27. Builders’ Liability Damages: The Present Position in the UK Robinson v PE Jones Contractors Ltd [2010] EWHC 102 (TCC) Earlier in his judgment, he said: “In my view, the conceptual basis upon which the concurrent liability of professional persons in tort to their clients now rests is assumption of responsibility.”  Robinson v Jones, note 1, para 74.

28. Builders’ Liability Damages: The Present Position in the UK Robinson v PE Jones Contractors Ltd [2010] EWHC 102 (TCC) He went on: “When one moves beyond the realm of professional retainers, it by no means follows that every contracting party assumes responsibilities (in the Hedley Byrne sense) to the other parties co-extensive with the contractual obligations. Such an analysis would be nonsensical. Contractual and tortious duties have different origins and different functions. Contractual obligations spring from the consent of the parties and the common law principle that contracts should be enforced. Tortious duties are imposed by law, as a matter of policy, in specific situations.” Robinson v Jones, note 1, para 76.

29. Builders’ Liability Damages: The Present Position in the UK Robinson v PE Jones Contractors Ltd [2010] EWHC 102 (TCC) Concluding: “There is no reason why the law of tort should impose duties which are identical to the obligations negotiated by the parties.” It followed that the existence of a contract did not, without more, necessarily create a tortious duty.., because one has to look at the relationship between the parties to see if there has been an assumption of liability.  Robinson v Jones, note 1, para 79.

30. Builders’ Liability Damages: The Present Position in the UK Robinson v PE Jones Contractors Ltd [2010] EWHC 102 (TCC) The Court of Appeal judgment: “In Murphy v Brentwood the House of Lords had returned to the orthodox and principled basis of tortious duty for negligently inflicted harmin holding that if a building defect became apparent before injury or damage is caused, the loss sustained is purely economic and in the absence of a special relationship of proximity is not recoverable in tort.” Robinson v Jones, note 1, para 44.

31. Builders’ Liability Damages: The Present Position in the UK Broster v Galliard Docklands Limited [2011] EWHC a1722 (TCC), [2011] BLR 569, 137 ConLR 26 The principles of Murphy v Brentwood were further adopted in Broster v Galliard Docklands Limited [2011] EWHC a1722 (TCC), [2011] BLR 569, 137 ConLR 26 where the owners of a terrace of six house issued proceedings against a builder and developer in relation to damage emanating from defects in the terraced roof. The Court echoing Murphy found that the claim was for damage “to the thing itself” and so the Claimants were not entitled to economic loss.

32. Builders’ Liability Damages: The Present Position in the UK Broster v Galliard Docklands Limited [2011] EWHC a1722 (TCC), [2011] BLR 569, 137 ConLR 26 The policy adopted by the English courts in the context of building claims was referenced by Akenhead J in Broster as follows: “Whilst one can of course have sympathy for owners of premises such as those who find themselves in the type of predicament these Claimants experienced, there are or were, some types of protection available. It is clear from the Particulars of Claim that some or all of them had the ten year protection of NHBC warranties. They could arguably have had, subject to limitation, some protection under the Defective Premises Act 1972….. Given the policy of the law in this area, it is not obviously unjust or unreasonable that the scope of any duty of care is limited.” 

33. Builders’ Liability Damages: The Present Position in the UK Broster v Galliard Docklands Limited [2011] EWHC a1722 (TCC), [2011] BLR 569, 137 ConLR 26 Attempts to circumvent Murphy are prevalent, such as the use of the complex structure theory (argued unsuccessfully by the Claimants in Broster) which contemplates the separateness of the component parts of a building or structure such that a defect in one part causing damage to another can support a claim in tort.

34. Builders’ Liability Damages: The Present Position in Ireland • However the UK has explicitly: • Distanced itself from Anns and Junior Brooks upon which Ward v McMaster is based. • Moved to a much more restricted view on damages. • Has consistently stood over this narrower view. • What about Ireland?

35. Builders’ Liability Damages: The Present Position in Ireland In the Supreme Court decision of Glencar Explorations plc v Mayo County Council (No 2) [2002] 1 IR 112 Keane CJ sounded an ominous note indicating certain openness to revisit the question. HOWEVER While, referring to Murphy v Brentwood DC, he observed that the Supreme Court had not been invited in the instant case to override its earlier decisions inSiney and Ward v McMaster:

36. Builders’ Liability Damages: The Present Position in Ireland Glencar Exploration Plc v Mayo County Council [2002] 1 IR 84 142 The Supreme Court expressly reserved its position. Keane CJ stated: “In Siney v Corporation of Dublin [1980] IR 400 economic loss was held to be recoverable in a case where the damages represented the cost of remedying the defects let by the local authority under their statutory powers. Such damages were held to be recoverable following the approach adopted by the House of Lords in Anns v Merton London Borough [1978] AC 728. While the same tribunal subsequently overruled its earlier decision to that effect in Murphy v Brentwood District Council [1991]. I would expressly reserve for another occasion the question as to whether economic loss is recoverable in actions other than for negligent misstatement and those falling within the categories defined on Siney v Dublin Corporation and Ward v McMaster and whether the decision of the House of Lords in Junior Books Ltd v Veitchi Co.Ltd. [1983] 1 AC 520 should be followed in this jurisdiction.”

37. Builders’ Liability Damages: The Present Position in Ireland  Also: • Beatty v Rent Tribunal [2006] 2 IR 191 at 200 (SC) that Geoghegan J was “satisfied that the law on the question of recovery of damages for economic loss in a negligence action] has not been finally determined in Ireland notwithstanding some relevant obiter dicta of Keane CJ in Glencar..” • Glencar did not concern builders’ liability • McMahon & Binchy – Law of Torts Fourth Ed. – it would seem “just and reasonable” to impose a duty of care towards those who sustain economic loss in preventing injury, death or damage from resulting as a foreseeable consequence of a builder’s negligence in creating such a risk (page 506)

38. HomeBond Fiona Forde B.L. The Law Library B.A. B.A.I. Mechanical & Manufacturing Engineering MSc. Construction Law and Dispute Resolution Postgrad. Dip. Construction Law & Contract Administration

39. HomeBond Homebond • If the builder is registered with the company – the scheme intends to give purchasers of new dwellings purchased within the terms of the scheme a guarantee in respect of certain major structural defects (“Major Defects”) which occur within ten years after completion of the dwelling. • The liability period for the scheme is ten years from the date of issue of the final notice except for smoke damage and water damage in which case the limitation period is reduced to two years from the date of issue of the final notice. • The final notice refers to a notice which is issued following a final inspection of the building.

40. HomeBond Member warrants: • The dwelling will be built with suitable and adequate materials and in a workmanlike manner so as to ensure structural stability. (s. 3.1) • The member will attend to any Major Defect in the dwelling either by remedying the Major Defect or paying the cost of the remedial works to the purchaser, with the agreement of HomeBond. (s. 3.3)

41. HomeBond Homebond warrants: • If the member defaults on their warranty Homebond will attend to any Major Defect in the dwelling either by remedying the defect or at its discretion by paying the cost of the remedial works to the purchaser. (s. 3.2) • The warranty on the part of HomeBond is subject to notification requirements (3.4) and exclusions / limitations (s. 3.6) and can be revoked automatically if the member enters into liquidation or if a receiver or an examiner is appointed to the member’s business or undertaking and at the date of the appointment of the liquidator, receiver or examiner, the dwelling is still vested in the member (s. 3.2(b))

42. HomeBond  Exclusions: • Homebond is not bound to compensate the owner for anything other than the cost of remedying the Major Defect or paying a sum equal to any diminution in value of the dwelling arising from the presence of the major defect. • In particular the HomeBond scheme does not cover any financial or consequential economic losses or loss or damage to property not being a Major Defect (3.6(a)) • HomeBond does not cover any defect which is the result of negligence on the part of someone other than the Member or his sub-contractor (3.6(a)). • Nor is the scheme liable for any defect which is covered by a policy of insurance or in relation to which the legislation provides for compensation. • The scheme expressly excludes any defect which is the result of drawings, materials, designs or specifications which have been provided for or on behalf of the original purchaser.

43. HomeBond Exclusions: • Damages arising from hair cracks, shrinkage, expansion, dampness caused by normal drying out or condensation, wear and tear or gradual deterioration, or any defects in the central heating system (s. 3.6(a)). • Defects arising from the installation or lifts and swimming pools (s. 3.6(a)). • Homebond’s liability is limited to €200,000 in respect of any major defect or any number of major defects for any one dwelling and the overall limit of liability in respect of any one dwelling (3.6(b)) and the overall limit of liability in respect of any one member of the scheme is €2,000,000 for claims made in respect of Major Defects although this limit may be increased by HomeBond at their discretion. (s. 4.1).

44. HomeBond Exclusions: • HomeBond shall have no liability to make any payment to a Purchaser unless HomeBond is satisfied that there are sufficient monies in the Guarantee Fund both the defray that payment and any other resulting or incidental costs (having regard to the contingent or other liabilities of Homebond). (s. 4.3) • Neither HomeBond nor the Member shall have any liability to any successor in title of the Purchaser named in this Agreement who acquired title after the Dwellings owner at the relevant time knew (or ought to have known) of the Major Defect, or where reasonable examination by a competent surveyor, architect or engineer would have disclosed a Major Defect. (s.3.6(b))

45. The Building Control (Amendment) Regulations 2014 Fiona Forde B.L. The Law Library B.A. B.A.I. Mechanical & Manufacturing Engineering MSc.Construction Law and Dispute Resolution Postgrad. Dip. Construction Law & Contract Administration

46. The Building Control (Amendment) Regulations 2014 The New Regulations (1 March 2014)

47. The Building Control (Amendment) Regulations 2014 The Main Changes

48. The Building Control (Amendment) Regulations 2014 The Main Changes I New Commencement Notice Requirements II New 7 Day Notice Requirements III New Certificates of Compliance on Completion IV The New Forms (The Schedules)

49. The Building Control (Amendment) Regulations 2014 I Commencement Notice Requirements Section 7: New form and requirements for Commencement Notice (Amendment of Article 9 of the Principal Regulations)

50. The Building Control (Amendment) Regulations 2014 Commencement Notice must be accompanied by: 9(1)(b)(ii) 3 Certificates of Compliance in the form set out in the Second Schedule • a Certificate of Compliance (Design) • a Certificate of Compliance (Undertaking by Assigned Certifier) • a Certificate of Compliance (Undertaking by Builder) 2 Notices of Assignment in the form set out in the Second Schedule • a Notice of Assignment of Person to Inspect and Certify Works (Assigned Certifier) • a Notice of Assignment of Builder