In Ulster Garden Villages and others v Farrans (Construction) Limited and others,¹ the Court of Appeal of Northern Ireland considered when a claim is “finally determined by a court…” for the purposes of claims made under the Defective Premises Act 1972 (“DPA”). The outcome resulted in a claim that was originally struck out for being time-barred, being permitted to be reheard, despite the provision of s.135(6) of the Building Safety Act 2022 (“BSA”).
"It now appears any DPA claim previously “determined” by a court can be brought back within the scope of the BSA’s retrospective 30-year limitation period, provided that the original decision permitted leave to appeal at the time the BSA was passed."
It now appears any DPA claim previously “determined” by a court can be brought back within the scope of the BSA’s retrospective 30-year limitation period, provided that the original decision permitted leave to appeal at the time the BSA was passed (irrespective of whether the grounds for appeal relate to limitation).
The case concerns the construction of a mixed-use development in Belfast, comprising an office, 91 residential apartments, an internal service yard and basement car parking. Partial possession in respect of the apartments was certified in December 2007, whilst practical completion of the entire development was achieved in March 2008.
In February 2019, occupants of two of the residential apartments reported damage to a party wall. Upon investigation, defects within the structural columns were identified. Further investigations led to widespread structural and design defects being uncovered. All apartments were subsequently evacuated in April 2019, leading to the collective apartment owners issuing proceedings against the various parties responsible for the design and build of the development.
In summary, the claimants argued the defendants had breached their obligations under Article 3 of the Defective Premises (NI) Order 1975, to ensure that “…the dwelling will be fit for habitation when completed.”² In response, the defendants argued the claimants were time-barred from bringing any action, given practical completion was achieved in March 2008, and claims were issued over a period between April 2020-March 2021 (over 12 years post practical completion).
Significantly, Northern Ireland had not implemented legislation which reflected the BSA in England and Wales. Under English law, s.135(1) of the BSA provides a 30-year retrospective limitation period for claims made under s.1 of the DPA. No such limitation period was available to the claimants in Northern Ireland at the time the judgment was passed in March 2024.
At a summary judgment hearing, the claimants’ case was struck out on limitation grounds. Mr Justice Huddleston highlighted that even on the claimants’ best case, the claim fell outside of the limitation period, which at the time was six years as per Northern Irish legislation. Importantly however, the claimants successfully obtained leave to appeal from the court (on grounds unrelated to the limitation argument).
Since the judgment in March 2024, the Northern Ireland assembly has introduced (on an expedited basis), new legislation to align the law of Northern Ireland with the BSA. In doing so, the Defective Premises (Northern Ireland) Act 2024 was enacted, which has created an identical retrospective limitation period of 30 years, as that provided under the BSA.
"Since the judgment in March 2024, the Northern Ireland assembly has introduced (on an expedited basis), new legislation to align the law of Northern Ireland with the BSA. In doing so, the Defective Premises (Northern Ireland) Act 2024 was enacted, which has created an identical retrospective limitation period of 30 years, as that provided under the BSA."
Section 8(5) of the Defective Premises (Northern Ireland) Act 2024 also replicated s.135(6) of the BSA, which provides:
“Nothing in this section applies in relation to a claim which, before this section came into operation, was… finally determined by a court or (whether on the basis of limitation or otherwise…”.
This section became the focus of the court’s attention when the case was considered by the Northern Ireland Court of Appeal in November 2024.
Since the new limitation period meant the claimants were no longer time-barred, the defendants sought to rely upon s.8(5) of the Defective Premises (Northern Ireland) Act 2024. Referring to the judgment at first instance, the defendants argued the claimants could not rely upon the newly extended limitation period, since their claim had previously been struck out and therefore had been finally determined for the purposes of s.8(5).
In response, the claimants relied primarily on the fact that the decision of Mr Justice Huddleston was under appeal, and despite leave to appeal being permitted on grounds unrelated to limitation, the claim could not be considered to have been “finally determined.” Having reviewed the arguments of both sides in November, the Lady Chief Justice of Northern Ireland, set the parties for a hearing on 11 December 2024.
Prior to the hearing date, the defendants conceded that for the purposes of s.8(5) of the Defective Premises (Northern Ireland) Act, the case had not in fact been “finally determined”. The parties subsequently agreed a consent order to vacate the first instance judgment, and the entire matter will now return to the court for a full hearing.
Despite being under the context of Northern Irish legislation, the outcome provides significant guidance to parties as to how s.135(6) of the BSA is intended to operate. Although the parties agreed by consent (and therefore before a Court of Appeal judgment was handed down), the outcome offers a helpful indication to parties going forward that s.135(6) will not prevent claimants bringing an action even if that action had previously been decided, provided the underlying decision was the subject of an appeal at the time the BSA was passed.
London Associate Naveed Hanif also contributed to this article.
[1] [2024] NIKB 15
[2] Under English law, the identical obligation is enshrined within S.2A of the Defective Premises Act 1972
