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Graham v Entec Europe Limited, Court of Appeal, 6 August 2003

16 September 2003
The issues

Limitation – Latent Damage Act – requisite knowledge

The facts

The Claimant brought an action against the Defendant in respect of negligent advice as to the causes of and recommendations for remedial work in respect of subsidence at his bungalow in Leamington Spa. The Defendant argued that the claim was time barred. Remedial works on the bungalow had been completed by August 1992. Further cracking in the structure became evident a month thereafter. Ordinarily therefore limitation would have expired well before proceedings were commenced on July 14th 2000. The issue for the Judge was whether or not the purposes of Section 14A of the Limitation Act (inserted by Section 1 of the Latent Damage Act 1986) the Claimant had the requisite knowledge before July 14th 1997. The Claimant stated that his knowledge was not available until he knew of the final conclusions of the experts appointed to advise his insurer’s loss adjusters in September 1997. The Judge dismissed the claim finding that it was statute barred. The Claimant appealed to the Court of Appeal.

The decision

Insurers for Mr Graham had retained a chartered surveyor and loss adjuster to investigate. He had submitted his first report in April 1991. The Defendants were instructed between July 1991 and August 1992. They made recommendations which the Claimant with the approval of his insurers adopted. After the remedial work was done minor cracks appeared. The chartered surveyor and loss adjuster were instructed again and he was authorised in turn to instruct engineers and a civil/structural engineer. That engineer reported to the loss adjuster in July 1997 concluding that the underpinning scheme that had previously been carried out did not properly address the problem of clay subsoil desiccation. The insurers decided that the cost of further work could not be justified and the Claimant’s bungalow was written off. When proceedings were brought in July 2000 they were brought by the insurers suing in the name of the Claimant. The Judge had found that the loss adjuster had had the necessary knowledge well prior to July 1997.

The Judge further found that the loss adjuster was an investigator appointed as agent of the insurers rather than as an expert whose help had been sought. Accordingly, the Judge had been right to impute to the Claimant the knowledge of the loss adjuster for the set purposes of Section 14A of the 1980 Act.

Appeal dismissed.

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