High Court: Irish family fails to make case against company providing structural defect warranty

About this case:

• Judgment:
  External link

Personal injury proceedings

A family of four have brought proceedings seeking damages for personal injuries against four defendants arising from the purchase of a residential property in a scheme of residential units in Mallow, Co. Cork.

The Wilkinson family entered into a building contract for the construction of what was to become their family home in November 2006, and as a result of what they say are very serious defects in the premises, the family vacated the house and claim to have suffered personal injuries consequent upon the damp condition of the house.

This High Court judgment was given in a motion by the third defendant, the National House Building Guarantee Company Limited trading as HomeBond, which provided a warranty to the purchasers in respect of the construction of the premises.

HomeBond sought an order that the action against it be struck out on the ground it was bound to fail, invoking the inherent jurisdiction of the court as well as Order 19, rule 28 of the Rules of the Superior Courts.

The Wilkinson’s also commenced breach of contract proceedings against HomeBond and the other defendants under the building agreement in which HomeBond is sued on foot of the guarantee or warranty issued to the Wilkinson’s in October 2006.

The personal injuries summons was issued on 8th July 2014, after the plaintiffs had obtained an authorisation to commence the proceedings from the Personal Injuries Assessment Board.

The case against HomeBond

The claim against HomeBond in these proceedings was made in breach of contract and negligence, expressly linked to what was described as a “warranty in relation to the building in respect of major structural defects”.

Personal injuries, loss, damage, inconvenience and upset were claimed to have been suffered by the Wilkinson’s by reason of the breach of contract and negligence of HomeBond, its servants or agents, and the particulars of negligence pleaded are that HomeBond failed

(a) To provide cover in line with the HomeBond guarantee in circumstances where a major structural defect exists and where the plaintiffs have complied with all notification requirements under the said HomeBond agreement.

(b) To properly certify adequately or at all the foundations of the dwelling before the concrete was poured.

(c) To certify adequately or at all the roof construction of the dwelling by wrongly issuing the final completion certificate.

HomeBond did not dispute that they provided the warranty and a HomeBond engineer or architect inspected the laying of the foundations and certain other structural works in the course of construction, thereafter issuing a final notice and the written warranty.

The primary fault with the premises related to defective foundations and resulted in significant damp penetration.

HomeBond issued a certificate before the sale closed and the building contract was completed by the parties thereto. Significant structural repair work, possibly including demolition and reconstruction, will be required and the Wilkinson’s abandoned the dwelling by reason of health concerns.

The family claimed that HomeBond did not merely approve the drawings but engaged in an active inspection of the premises in the course of construction and that the certificate provided by it must be seen in that context.

The HomeBond guarantee provided a warranty limited to €200,000 in respect of structural defects that become apparent in a newly built dwelling within ten years of the date of the bond.

Within the guarantee however, there was a provision entitled “Exclusions from/Limitations to liability - Major Defects” stating that “neither HomeBond nor its servants or agents shall have any liability whatsoever (and irrespective if how it arises) to a purchaser in relation to any claim for damages, expenses or other compensation relating to any act or omission concerning the dwelling. In particular, HomeBond shall have no liability in relation to any negligence or default in inspecting (or failing to inspect a dwelling)”.

Therefore, in its express terms the guarantee was limited to the provision of a warranty in respect of structural defects and expressly excluded any claim for damages arising, inter alia, from the issuing of the Final Notice or in respect of any negligence in inspecting or failing to inspect a dwelling the subject matter of the warranty.

The proceedings were founded in a claim that HomeBond negligently issued a certificate of completion, or negligently carried out an inspection of the premises, and in particular of the foundations and the roof construction, and that in the circumstances the Final Notice was wrongfully and negligently issued.

Justice Baker was satisfied that the relationship between the parties was one governed wholly by the HomeBond document in the absence of any plea or any fact which might ground an alternative source of those obligations. Accordingly, Justice Baker held that the proceedings must be considered within the legal relations established by the agreement, and not otherwise.

Furthermore, the Wilkinson family pleaded their action on the HomeBond guarantee or warranty, but on a true construction of the documents they excluded the claim, and the documentary evidence could not possibly sustain the claim.

In those circumstances, Justice Baker stated that the HomeBond agreement did not sustain these proceedings, and indeed expressly excluded it.

Conclusion

Justice Baker stated that the claim was one founded in a contract of warranty contained in a written document; that contract expressly excluded liability for the claim as pleaded; and no special relationship claimed to have come into existence either as a result of a representation or the assumption of additional liabilities by HomeBond

In exercising the inherent jurisdiction of the court, Justice Baker decided to strike out the claim of the Wilkinson family against HomeBond on the grounds that the claim was bound to fail.