Deliberate concealment and cladding claims
Posted: 19/02/2025
In the adjudication giving rise to the court’s decision in BDW Trading Ltd v Ardmore Construction Ltd [2024] EWHC 3235 (TCC), the adjudicator was asked to (and did) find that the main contractor, Ardmore, had deliberately omitted cavity barriers and concealed this fact.
This issue arose because the developer, BDW, was seeking a postponement of the limitation period under section 32 of the Limitation Act 1980. In spite of the extension of the limitation period for claims under the Defective Premise Act 1972 (DPA) from six to 30 years from completion, section 32 has been invoked in cladding claims with greater frequency in recent years. This article considers how the courts have applied it to defect claims and the evidence required.
Section 32 of the Limitation Act 1980
Section 32 relevantly provides:
‘(1) … where in the case of any action for which a period of limitation is prescribed by this Act, either—
…
(b) any fact relevant to the plaintiff’s right of action has been deliberately concealed from him by the defendant; or
…
the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it.
References in this subsection to the defendant include references to the defendant’s agent and to any person through whom the defendant claims and his agent.
(2) For the purposes of subsection (1) above, deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty.’
This was the subject of recent clarification from the Supreme Court in Canada Square Operations Ltd v Potter [2023] UKSC 41 regarding payment protection insurance. The court confirmed that what is required to satisfy section 32(1)(b) is:
- a relevant fact to the claimant’s right of action;
- the concealment of that fact from the claimant by the defendant, either by a positive act of concealment or by a withholding of the relevant information; and
- an intention on the part of the defendant to conceal the fact or facts in question.
As regards section 32(2), the reference to a ‘deliberate breach of duty’ requires that the defendant knows it is committing a breach of duty or intends to commit the breach of duty. The duty could be a requirement to comply with a design/specification.
In the context of section 32(1)(b) and section 32(2), deliberate means just that; recklessness will not suffice.
What do other cases regarding building defects tell us?
How might this be applied where the relevant fact is that elements of an external wall system, ie fire/cavity barriers, have been omitted or defectively installed, and this was concealed behind cladding panels? Prior cases regarding other building defects are instructive.
The case of Trustees of the London Hospital v T P Bennett & Son and others 13 ConLR 22 was a claim by a hospital against an inspecting architect, engineer and building contractor, responsible for building a nurses’ home.
Sometime after construction, bulges appeared in brickwork cladding. When opened up, it became apparent that concrete nibs had been hacked back by the contractor to accommodate the cladding.
Limitation was in issue, and it was alleged that the contractor had deliberately concealed the hacking back of the nibs. The judge said:
‘…I have come to the conclusion that the only possible explanation is that deliberate steps were taken to conceal what was going on from those whose duty and in whose interest it would have been to stop it. This was destruction on a massive scale. Approximately 80 nibs were either hacked back to some extent or hacked right back, leaving the reinforcement exposed. No bricklayer or operative acting in that way could fail to know what he was doing was wrong, and accordingly would take all possible steps to conceal it… There can be no question that the contractor's supervisory staff must have been aware of what was going on, but the undoubted fact that the architect throughout the period that the brick cladding was going up was unaware that the large number of nibs were being hacked leads me to the inference that deliberate steps were being taken by those concerned to conceal from him the wrongful and destructive work that was being done. Evidence of deliberate concealment must, in the nature of things be circumstantial, as it is hardly likely that the wrong doer will come forward to confess his guilt.’
Kijowski v New Capital Properties Ltd 15 ConLR 1 arose out of cracking to a house, due to differential settlement and other causes. It was argued that the primary limitation period had expired. This argument was successful, but the court nevertheless went on to consider an argument of deliberate concealment. The judge surmised:
‘…it must be shown, in the context of a building case, that the builder has knowingly done bad work which is not of a trivial kind and which he has covered up, so that the bad work was not likely to be detected by a purchaser or his successors... I have no doubt at all that the failure to follow the approved plans in relation to the size of the joists at roof and first floor levels was deliberately concealed. No-one could have detected the defects in the first floor joists after the house was finished without uncovering the finished work… I reach the same conclusion in relation to the lack of bedding for the drains. The defendants knew that they had failed to provide any when they should have done. They covered in the work and must have known that the failure would probably not be detected... I also reach the same conclusion in regard to the hole broken into the front elevation of the house to accommodate the foul drains. The failure to provide a lintel was bad workmanship which was deliberately covered up. Whoever did this would have known that eventually it was likely to cause trouble. This defect would not have been discovered until trouble actually occurred.
‘What of the foundations? They were, as I have found, defective in that insufficient attention was paid to the presence of the oak tree and its roots. The defendants did not take any special precautions in the light of the NHBC recommendation to which I have referred. They knew that no-one would be likely to examine the foundations after they were covered in unless and until there was some movement of the structure giving rise to damage. I consider that it would be unconscionable were the defendants to be able to rely on limitation to defeat the plaintiffs' claim in these circumstances…’
Notably in these cases, the judges were willing to infer the necessary intent to conceal from the nature and extent of the physical defects.
In contrast, the necessary intent was not found in Kaliszewska v John Clague & Partners 5 ConLR 62. In this case, the defendant architect designed a bungalow for the plaintiff. Serious cracks appeared due to the inability of the foundations to withstand differential movements of the subsoil. The plaintiff sought to rely on the architect intentionally not following well-established practice or published guidance. The architect said in evidence that he regarded the guidance as ‘idealistic’. The judge said that:
‘It is argued that here was an architect who deliberately rejected current wisdom as idealistic and took a risk which he could not rationally justify because of his client's pocket without informing his client of these facts. If this was a true reflection of the situation at the time I would accept that this was deliberate concealment.”
However, he ultimately found:
‘I have no doubt that the defendant's design was defective, not because he knowingly took the risk of providing inadequate foundations, but simply because he was on this particular occasion incompetent. The truth, as I have already found, is that he did not appreciate the importance of the trees on this site. He simply thought that they were not large enough to create a problem… This is a straightforward case of an honest blunder, a defendant unaware that he was committing a wrong. I am not satisfied that he knew there was a risk of his foundations not being adequate.’
Returning to BDW v Ardmore, the court noted that BDW had alleged in the adjudication (and the adjudicator had found) that ‘[b]y omitting cavity barriers behind the Ispotherm system above the second storey of the Development, having sought advice from Alumasc who confirmed that cavity barriers were required… Ardmore deliberately breached its duty under the Building Contract and/or deliberately concealed these defects…’
Accordingly, it appears that the fact of the contractor having checked, and been told, that the barriers were required provided a sufficiently compelling basis for the experienced adjudicator to find that section 32 applied.
Comment
The multitude of defects often discovered in external wall systems can raise questions of whether only incompetence was at play. It is now painfully clear that historically there was widespread lack of care and/or competence, and in many cases this may not be strong enough evidence to show deliberate breaches of duty and/or concealment.
However, in cases where explicit advice and/or clear design requirements were not followed, there is potential to satisfy an adjudicator or court, on the basis of inference, that there has been deliberate concealment.
This may be particularly important where there is not (otherwise) a valid claim under the DPA, ie:
- the external wall system was installed as part of a refurbishment prior to 28 June 2022, not involving the creation of the dwelling(s) (such projects are covered by section 2A of the DPA after this date);
- the building, or the relevant part of it, is not residential;
- the relevant works were completed more than 30 years before 28 June 2022, when the relevant provision of the Building Safety Act 2022 came into effect extending the limitation period for DPA claims on completed projects;
- the defects are not such as to render the dwelling unfit for habitation, but do breach a contractual obligation, ie a performance specification. This may be unlikely to arise in the context of fire safety defects. Conceivably, it could for an issue relating to insulation and thermal/energy efficiency.
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