Cases - Baxall Securities Ltd v Sheard Walshaw Partnership

Record details

Baxall Securities Ltd v Sheard Walshaw Partnership
EWCA Civ 09
Contract administration

The defendant architects were held to owe a limited liability to a subsequent purchaser of commercial property in tort, notwithstanding the absence of a contractual relationship. The duty was owed in respect of damage caused by a latent design defect to property other than the defective item of work itself.

The defendants had been employed on the RIBA conditions to design and supervise the construction of a warehouse between 1989 and 1992 and had issued a final certificate to the contractor in December 1992. The detailed design of the roof drainage was carried out by a specialist subcontractor. The claimants subsequently occupied the warehouse. In 1995 two floods penetrated the roof of the building and damaged the claimant's goods. The floods were caused by the inability of the drainage system to cope with heavy rainfall.

The claimants brought an action in tort against the defendants, alleging that they had negligently failed to design the drainage system to cope with anticipated rainfall. The defendants denied negligence and denied that they owed a duty of care to the claimants as subsequent occupiers of the affected building rather than the client who had engaged the architects.

On appeal the claim failed because the cause of the two floods was found to be a patent defect (the absence of overflows) which should have been spotted by the claimants' surveyors. The claimants' failure to identify the defect broke the chain of causation between the defendants' negligent design and the damage suffered.

As to the duty owed by an architect to a subsequent owner or occupier, the court held that (save where the claim rested on the kind of liability found in Hedley Byrne v Heller), there was only a limited duty:

  1. First, the duty must be owed in respect of property other than that which is the subject of the design.
  2. Secondly, a duty is only owed in relation to damage consequent upon an undiscoverable defect, i.e. a latent defect.