The application before Mrs Justice O'Farrell on this occasion had been issued by GHW for:

(i) reverse summary judgment against Snowden in respect of the Additional Claim bought by Snowden against GHW. On the grounds that Snowden had no reasonable prospect of succeeding on the claim because it was statute-barred. Snowden conceded that its claim in contract was time-barred but opposed the application on the basis that its claim in negligence was not, either under s2 or s14A of the Limitation Act 1980.

(ii) strike out of Snowden's claim against GHW for contribution, pursuant to the Civil Liability (Contribution) Act 1978, on the grounds that the Additional Claim disclosed no valid cause of action. Snowden submitted that the contribution claim was arguable and no limitation issue arose.

Facts

Vinci was appointed by Princes Limited under a NEC3 contract executed by deed on 26 April 2012 to design and build its new warehouse and distribution facility.

Snowden was engaged by Vinci, under a subcontract dated 12 April 2013, executed as a deed and also based on the same model NEC3, to carry out the design, supply and installation of the structural reinforced concrete slabs as part of the works. GHW was in turn engaged by Snowden to carry out the design, complete with all calculations and drawings, for the reinforced concrete slabs. This was not back to back in that it was executed as a simple contract only.

The original design incorporated the break out and replacement of the existing concrete slab in an area of the works referred to as "the Low Bay Warehouse". However, the design was changed to include limited replacement of areas of the existing slab and the installation of an unbonded overlay slab on top of the retained slab. The design for the overlay slab was developed in May/June 2013. Installation commenced on or around 2 July 2013 and was completed by 9 July 2013, with the works at the Low Bay Warehouse being completed by 2 August 2013.

Vinci's case is that by September 2013, the floor had developed signs of damage and/or defects. Various remedial schemes were carried out in an attempt to address the damage/defect, but ultimately Princes removed and replaced the Low Bay Warehouse floor entirely. Princes then commenced an adjudication against Vinci for breach of contract in respect of defect caused by inadequate design of the floor. This adjudication was successful in a decision made on 2 April 2020. By further adjudication decision on 8 April 2021, Vinci was held liable for Princes costs of removing the overlay slab and the construction of the new floor.

On 10 September 2020, Vinci served a letter of claim on Snowden claiming an indemnity and/or damages flowing from the adjudication decision and Snowden's role in the design / installation for the floor. On 7 May 2021, and subsequently on 21 October 2012, Snowden and GHW entered into a series of standstill agreements suspending time for any limitation defence until 21 April 2022.

On 9 February 2022, Vinci commenced proceedings against Eastwood and Snowden, seeking damages of c.£2.5 million in respect of the sums paid pursuant to the adjudication decisions and costs. On 8 April 2022, Snowden served its defence, denying liability to Vinci and also served the Additional Claim on GHW, seeking an indemnity and/or contribution.

On 6 March 2023, GHW issued the application for summary judgment / strike out. In terms of the former, GHW averred that in relation to Limitation, it was common ground that any contractual claim by Snowden against GHW was statute barred by 7 May 2021. In relation to the claims in tort, the parties were in dispute as to the date of accrual of the cause of action, for the purposes of interpretation pursuant to s2 and s14A of the Limitation Act 1980.

GHW’s position was that Snowden suffered actionable damage when it relied on GHW’s allegedly negligent design, causing it to be exposed to Vinci’s claim, in around July 2013. Alternatively, damage to the overlay slab manifested by April 2014 at the very latest and the claim in tort accrued then.

Snowden’s position was that the date of accrual of the relevant cause of action in tort was the date of physical damage. Based on the evidence available, Snowden argued that there was a real prospect of establishing at trial that actionable damage did not occur to the overlay slab until after 7 May 2015. Alternatively, that pursuant to section 14A(4)(b) of the Limitation Act, the first date on which Snowden had the relevant knowledge required for bringing an action in damages in respect of the relevant damage was the date of Vinci’s letter dated 25 May 2018.

Decision

Shortly before the application came to be heard, the decision in URS Corp Ltd v BDW Trading Ltd had been handed down. Mrs Justice O'Farrell referred and relied upon the analysis of Mr Justice Coulson when considering the date of accrual of the date of the cause of action in circumstances where here, as in URS the defect caused no immediate physical damage.

Based on the principles in URS, Mrs Justice O'Farrell summarised that the date of accrual of a cause of action turned on the proper characterisation of the loss. If characterised as physical damage, the cause of action would accrue on the date of damage. If an economic loss case, the cause of action would accrue by the date of completion.

Based on the evidence before the Court, it had held that the overlay slab suffered material damage by March/April 2015 at the latest. Therefore, regardless of whether the Court adopted the date of completion of the Low Bay Warehouse floor or the date of physical damage as the date of accrual of any cause of action in negligence, any such cause of action accrued prior to May 2015. The Court therefore held that Snowden's claim in negligence, based upon s2 of the Limitation Act 1980 was statue-barred.

In terms of Snowden's reliance on S14A of the Limitation Act, the Court referred to its previous finding that by March/April 2015, all parties including Snowden were aware that serious damage had occurred. Therefore the issue for the court to decide was whether Snowden had real prospect of success in terms of attribution. In this regard the Court referred to the analysis summarised in Haward v Fawcetts [2006] 1 WLR 682 (HL).

Having considered these principles, Mrs Justice O'Farrell concluded that the Court was not in a position to conclude a view on this issue without conducting a mini trial on the documents, in contravention of the rules on Summary Judgment. The Court concluded that without such determination Snowden had a real (opposed to fanciful) prospect of succeeding on the issue at trial and rejected GHW's application for summary judgment.

In terms of Snowden's claim for contribution, the Court held there was a reasonably clear claim made against GHW and that there were no grounds for strike out. 

Comment

This case serves as an excellent summary of the key principles from the decision in URS and an example of their application, which will be of interest to those bringing or defending claims against designers of allegedly defective structures.

In terms of the construction industry, it serves as an important reminder that where a main contract is signed as a deed, important subcontracts further down the supply chain should be executed in a similar fashion, to ensure that all parties with any design responsibility are held to the same liability periods.