Pearson Education Ltd v Charter Partnership Ltd

Architect’s negligence – Building having inadequate capacity for rainwater drainage – Flood causing damage to tenant’s property – Whether likelihood of discovering defect following earlier flooding terminating duty of care – Whether defect ceasing to be latent upon earlier discovery of which tenant not informed – Whether limitation period expiring – Appeal dismissed The respondent became the tenant of warehouse premises upon acquiring the assets of the previous tenant (IBD). The appellant architect had drawn up the design and specifications of the building for the original developer in 1988; these had included a rainwater drainage system that was designed to cope with a rainfall intensity of 75mm per hour. In 1989, the appellant had approved the appointment of a subcontractor to design the system to that capacity. However, the appellant should have specified a capacity of 150mm.In 1994, a severe rainstorm caused flooding and damaged a stock of books owned by IBD. IBD’s insurer instructed loss adjusters, who discovered that the drainage system was inadequate. However, that information was not conveyed to IBD. Instead, IBD was told that the rainwater drainage system had been overwhelmed by a rainstorm of unusual intensity. The flood damage was repaired by the landlord.In July 2002, after the respondent had taken over the premises, the building flooded again, damaging the respondent’s stock of books. In 2004, the respondent brought a claim in negligence against the appellant. The appellant argued that no duty of care was owed. It maintained that, in any event, the 15-year limitation period prescribed by section 14B of the Limitation Act 1980 for bringing a claim had expired because the breach of any relevant duty of care had occurred in 1988, when it had first specified an inadequate capacity. The judge allowed the respondent’s claim.On appeal, the appellant submitted that the first flood had ended its potential liability in negligence because: (i) there was no duty of care in respect of a latent defect in circumstances where it was likely to be discovered by intermediate inspection before damage was caused; (ii) it had been reasonable to expect that the inadequate capacity would be identified and remedied after the first flood, such that further damage was not reasonably foreseeable; and (iii) the defect had ceased to be latent upon discovery of the inadequate capacity by the loss adjusters, such that the chain of causation had been broken.Held: The appeal was dismissed. 1. There was no authority for the proposition that a defendant would not be liable for the consequences of creating a dangerous defect in a chattel or realty merely because there was a possibility that the defect would be discovered by an intermediate inspection before the claimant was affected by it: Donoghue v Stevenson [1932] AC 562 distinguished; Clay v AJ Crump & Sons Ltd [1964] 1 QB 533 applied. The party responsible for a dangerous defect could not escape liability by claiming that it was reasonable to expect the claimant to discover the defect if the claimant had not in fact discovered it. Moreover, liability could not be avoided where there was a likelihood of discovery by a third party, or where a third party had discovered the defect, but the claimant remained unaware: Murphy v Brentwood District Council [1991] AC 398 distinguished. The judge had made no finding that the loss adjusters or the insurer that instructed them had been under a duty to report their findings to IBD.2. When specifying the capacity of the drainage system, the appellant had had no reason to expect that an inspection would be carried out that would reveal any error: Baxall Securities Ltd v Sheard Walshaw Partnership [2002] EWCA Civ 9; [2002] 1 EGLR 73; [2002] 17 EG 158 distinguished. It had been reasonably foreseeable that, had the appellant caused an inadequate drainage system to be installed in the warehouse, the owners of property in that warehouse might suffer flood damage to their property. The test of foreseeability in that context did not require foresight of the precise sequence of events resulting in any damage.3. Further, there was no basis in principle or authority for the appellant’s contention that the defect had ceased to be latent upon the loss adjusters’ discovery of it. The fact that a third party became aware of a latent defect was no reason to deem the defect to be patent to others who neither knew nor ought to have known of the discovery.4. Section 14B required the court to identify the latest negligent act or omission to which the respondent’s damage could be attributed. The relevant act or omission of the appellant was not its initial mistake in adopting an inadequate drainage capacity, but the later act of specifying to the subcontractor a design capacity that the appellant should have known was inadequate; that had occurred within the limitation period.Nicholas Dennys QC and Mark Chennells (instructed by Mills & Reeve, of Norwich) appeared for the appellant; Colin Edelman QC (instructed by Barlow Lyde & Gilbert) appeared for the respondent.Sally Dobson, barrister