One-off houses and certificates – McGee v Alcorn & Friel 2016

The issue of liability for negligent and inspection and certification of new houses has been widely debated since the introduction of the Building Control (Amendment) Regulations, 2014.  The potential liability for certifiers gave rise to a good deal of concern before the Regulations were introduced, and for good reason.  There is a substantial risk that a negligent certifier will be held liable for the cost of putting right defects to a house in the event of negligent inspection or certification.   This is the issue that was before O’Malley J in the High Court in the February 2016 decision in McGee v Alcorn.

The plaintiffs, Mr. and Mrs. McGee, bought a house in 2008 for €430,000.  Alcorn was the building contractor, and Friel was the architect technician who issued certificates confirming that he had inspected the construction of the house, that the foundations and ground conditions were satisfactory and suitable, and that the house complied with the Building Regulations.

The foundations, in fact, had been built so badly that the house began to crack and tilt.  The engineer retained by the McGees to inspect the damage to their house described the workmanship as ‘pathetically bad’; the court described the house as having been built on a  ‘bizarrely defective’ foundation; two of the house’s windows were not built on any foundation, and the house was built on ‘made-up’ ground, not suitable for building.

Alcorn, at the time of the judgment, had left the country and had a judgment in default marked against him.  This left Friel carrying the liability for the entire loss.

The case is of interest to construction professionals and their advisers for a number of reasons.

Firstly, the court had no difficulty in finding that the technician owed a duty of care to the purchasers of the house, although there was no contract between them.    For this purpose the court adopted the traditional test of negligence, finding that there was proximity between the McGees and Friel, that the loss to the McGees was reasonably foreseeable, and that it was fair, just and reasonable to impose a duty of care to purchasers

‘on persons such as engineers and architects who provide certificates of this nature to builders.  Most people buying a modern house, and most of the lenders to whom they will go for mortgages, will require such certificates and will rely upon them.  Self-certification by a builder does not seem a realistic alternative.  It is simply untenable to suggest that the person who holds himself out as professionally qualified to assess, and in a position to certify, the quality of the house and the workmanship of its construction, should not thereby be required to take care in giving such certification’.

The defendant’s counsel had argued that the cost of repairing the house was ‘economic loss’, which is not recoverable under the law of negligence, except in limited circumstances.      The court, however, found that those circumstances existed, as the case, although argued as a claim in negligence, effectively amounted to a claim in negligent misstatement, for which economic loss is recoverable.

The court awarded €129,000 in damages for repair of the house; €38,525 for reinstatement of finishes and redecoration; €75,000 for the reduction in value to the house caused by the permanent ’tilt’; €11,000 for replacement of chimneys, and €25,000 in respect of distress and inconvenience during the works, which was exacerbated by the fact that the plaintiffs and their three young children continued to live in it during the construction works.

A striking feature of this case is that it related to a rural ‘once-off’ house, singled out for exemption for building control by SI 365/2015 and widely welcomed by politicians, particularly in rural areas.  (http://paulconnaughton.ie/2015/07/29/easing-of-building-regulations-welcome/) I criticised this exemption in my letter to the Irish Times here.

 

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