Cladding claims and concealment under the Limitation Act 1980

Posted: 18/08/2020

Key takeaways

The case of RG Securities (No.2) Ltd v (1) Allianz Global Corporate and Specialty (2) Building Lifeplans Ltd (3) R Maskell Ltd [2020] EWHC 1646 (TCC) is a reminder of the high hurdle set by the court for any party to achieve summary judgment in a claim.

It also provides an important confirmation of one aspect of the law relating to concealment under s.32(1)(b) of the Limitation Act. More specifically, that a limitation period can be re-started by deliberate concealment even if the defendant had acquired a limitation defence prior to the concealment (with the effect that the defendant can be deprived of that defence).

Facts of the case

RG Securities Ltd (RGS) is the freehold owner of St Francis Tower in Ipswich, the largest residential tower block in Suffolk. RGS alleges that there are defects with the cladding system (and other fire safety aspects of the building), which were installed during refurbishment works carried out between 2006 and 2009. RGS alleges that the cladding system is more flammable even than that used on the Grenfell Tower and that overall remedial costs total approximately £3.5 million.  

RGS is bringing a claim against, amongst others, R Maskell Ltd, which undertook the refurbishment works. RGS purchased the building in 2015 from a company that is a wholly owned subsidiary of Maskell.

RGS issued proceedings in December 2019 and its action appears to centre on a claim that Maskell was in breach of a statutory duty owed under the Defective Premises Act 1972. In response, Maskell asserts that the limitation period for such a claim (being six years from the completion of the works) expired long before RGS issued proceedings in December 2019.

In reply, RGS has advanced a case that Maskell concealed from RGS, during the transaction to purchase the building in 2015, that the building did not have building regulations approval. As such, RGS says it is entitled to rely upon s.32 of the Limitation Act 1980, with the effect that the limitation period in the claim is re-set and does not begin until it discovered this concealment, which it says was in May 2018 (when the local building control team told it of the absence of building regulations approval).

Section 32 of the Limitation Act allows for the postponement of a limitation period in the case of fraud, concealment or mistake. Section 32(1)(b) provides that where any fact relevant to a claimant’s right of action has been deliberately concealed from them by the defendant, the limitation period shall not begin to run until the claimant has discovered the concealment (or could with reasonable diligence have discovered it).

RGS contends that this occurred in this case in that Maskell deliberately concealed from RGS the lack of building regulations approval pre-purchase in 2015, and this amounted to a concealment of a fact relevant to its cause of action. For its part, Maskell denies it committed any deliberate concealment. However, it also argued that (even if it had) any concealment had occurred after the expiry of the limitation period (ie after six years from completion) and, as a matter of law, this precludes RGS from running a concealment case seeking to postpone the start of that limitation period.

Court’s decision

As this was a defendant’s summary judgment application, the court was not deciding whether RGS had proved its concealment case. Rather, the relevant question was whether Maskell had shown that the concealment case had no realistic prospect of success.

The court found that Maskell had not overcome this hurdle for two main reasons. Firstly, the court concluded that the fact that the limitation period might have already expired by the time of the alleged concealment does not prevent RGS bringing its concealment case. As a matter of law, a defendant’s deliberate concealment will re-start the limitation period (from the date of discovery or imputed discovery) regardless of whether, by the time of concealment, the defendant had already acquired a limitation defence.

Secondly, on the evidence currently available (and accepting that further evidence might emerge before trial), the court held that RGS has a realistic prospect of proving its case on concealment. From the available evidence, it appeared to the court that the fact that the building did not have building regulations approval was not disclosed to RGS, and arguably was deliberately concealed from it. Further, RGS has a realistic prospect of proving any proven deliberate concealment was by Maskell notwithstanding that it was Maskell’s subsidiary company that sold the building to RGS in 2015.  

As such, RGS’ case goes forward with the prospect that, in due course, there may be a full hearing of its concealment case at trial.

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