THE HIGH COURT
			1999 No. 5881P
BETWEEN 
JOHN O’DONNELL AND SYLVIA O’DONNELL
			PLAINTIFFS
AND 
KILSARAN CONCRETE LIMITED AND TOM CURRID CONSTRUCTION LIMITED 
			DEFENDANTS

JUDGMENT of Mr. Justice Herbert delivered the 2nd day of November, 2001
On the 19th May, 1987 the Plaintiffs entered into a contract in writing, but not under seal, with the second named Defendant to build a dwelling house at Rathanoragh, Strandhill Road, Sligo.  The work was carried out using a cavity wall system with solid five newton concrete blocks 100mm x 440mm supplied by Spollen Concrete Limited to the second named Defendant.  It is accepted by the parties that there was no privity of contract between the Plaintiffs and Spollen Concrete Limited for whose torts, (if any), in this transaction the first named Defendant has accepted responsibility.
An Architects Certificate of Practical Completion was issued in March 1988 and the Plaintiffs moved into occupation the same month.  A number of defects were identified in what is commonly referred to as a, “snags list” and these matters were attended to by the second named Defendant in 1989.
In 1991 cracks appeared in the outside walls of the house in the area of the garage wing which joins the main structure at a right angle to its long axis.  This cracking was attributed, - the evidence does not indicate by whom, - to settlement of the structure.  The existing plaster in this area was removed and the area was replastered, I assume by the second named Defendant or by someone on its behalf, though this is not clear by the evidence.  
In 1997 the second named Plaintiff decided that she would like to replace the existing window in the lounge area of the house with a bay window.  Mr. David Lawlor, the architect who designed the house was consulted.  In the course of discussions in May 1998, the second named Plaintiff drew Mr. Lawlor’s attention to cracking in the plaster of the lower section of the outside wall of the main structure of the house adjoining the garage block and in the garage itself.  Mr. Lawlor consulted Mr. Roderick McLoughlin, a Civil Engineer, and he examined the walls in October 1998.  Mr. McLoughlin identified the problem as due to the presence of more than 0.5% iron pyrites in the concrete blocks with which the wall was constructed.  This mineral undergoes a chemical reaction if the wall becomes water saturated in the presence of oxygen and this reaction results in splitting and rust staining of the blocks.  The speed with which this deterioration takes place is accelerated by increased temperature.  Mr. McLoughlin when crossexamined by Counsel for the Defendants was unable to express any opinion as to the cause of the cracking in the garage area in 1991.  He stated that settlement cracks can occur many years after a structure is built.  He said that he had concluded after discussing the matter with the first named Plaintiff that the cracking which he had identified as due to an excess of iron pyrites in the cement blocks was of recent origin.  The fact that no complaints were made to the second named Defendant by the Plaintiffs after 1991 lends support to this view.  In answer to Counsel for the Defendants Mr. McLoughlin agreed that the cement blocks used in the construction of this dwelling house were unsuitable and defective from the outset and should not have been used for either the inner or outer sections of the cavity walls. 
On the 4th June, 1999 a plenary summons was issued by Mullaneys, Solicitors for the Plaintiffs claiming damages for breach of contract, misrepresentation, negligence and breach of duty on the part of the Defendants their servants and/or agents.  On the 18th November, 1999 a statement of claim was delivered claiming damages for breach of contract on the part of the second named Defendant, negligence and breach of duty on the part of both Defendants and breach of statutory duty on the part of the first named Defendant.  A defence was delivered on the 3rd February, 2000 on behalf of all the Defendants.  In addition to the other pleaded defences the Defendants specifically pleaded the provisions of Section 11(1)(a) and 2(a) of the Statute of Limitations, 1957, as amended and extended by the Statute of Limitations (Amendment) Act, 1991 and say that the claim of the Plaintiffs is time barred.  By way  of a special reply delivered on 1st March, 2000 the Plaintiffs plead that their cause of action accrued within six years prior to the commencement of the action and is therefore not time barred.  
This is a Trial of a Point of Law prior to Trial which was set down for hearing under Order 25 of the Rules of the Superior Courts, 1986 as to whether the claims of the Plaintiffs, (if any), in Contract or in Tort are time barred.
        Subsection 11(1)(a) of the Statute of Limitations 1957 provides as follows:-
“The following actions shall not be brought after the expiration of six years from the date on which the cause of action accrued -
(a) Actions founded on simple contract.”

Subsection 11(2)(a) of the Statute of Limitations 1957 as substituted by Section 3(2) of the Statute of Limitations (Amendment) Act, 1991 provides as follows:-
“Subject to the paragraph (c) of this subsection and to Section 3(1) of the Statute of Limitations (Amendment) Act, 1991 an action founded on Tort shall not be brought after the expiration of six years from the date on which the cause of action accrued.”
Paragraph (c) relates to actions for damages for slander and Section 3(1) of the Statute of Limitations (Amendment) Act, 1991 relates only to actions for personal injuries.  Accordingly the relevant period of limitation in tort applicable in this matter is six years from the date on which the cause of action accrued.
Counsel for the Defendants, who are the Applicants in this preliminary trial of a point of law, argued that any cause of action of the Plaintiffs in contract accrued when the breach of contract occurred, that is in 1988 when the defective blocks were used by the second named Defendant in the construction of the dwelling house.  Misrepresentation on the part of the Defendants their servants and/or agents is pleaded in the plenary summons in this case but is not pursued in the Statement of Claim and no argument based upon fraud or fraudulent concealment was addressed to the Court on behalf of the Plaintiffs/Respondents at the hearing of this preliminary trial of a point of law.  Accordingly, in my judgment any cause of action in contract accrued prior to March 1988 when the Architect issued his Certificate of Practical Completion and consequently became time barred prior to the 4th June, 1999 the date when the plenary summons was issued.
The Plaintiffs/Respondents plead a cause of action in negligence only against the first named Defendant and plead a cause of action in negligence as an alternative plea against the second named Defendant.  Counsel for the Defendants/Applicants did not argue, and in my judgment correctly so having regard to the Statement of the Law in this Jurisdiction expounded by the Supreme Court in the case of Finlay v. Murtagh [1979] IR 249, that the  existence of a contractual relationship between parties precludes the injured party from seeking a remedy in tort on the same facts.
In the case of Hegarty v. O’Loughran [1990] IR 148 at 158, Griffin, J., in the Supreme Court stated that:-
“..... When the wrong is not actionable without actual damage as in the case of negligence, the cause of action is not complete and the period of limitation cannot begin to run until the damage happens or occurs”

However, once the damage occurs, it is clear from the decisions of the Supreme Court in that case and in the case of Tuohy v. Courtney and Larkin and Ors [1994] 3 IR 1, that time begins to run and continues thereafter to run, except in those cases to which Part III of the Statute of Limitations 1957, the Statute of Limitations (Amendment) Act, 1991 and the Statute of Limitations (Amendment) Act, 2000 apply.  These statutory provisions are not relevant to the matters at issue in this action.
Counsel for the Plaintiffs/Respondents argued that the damage in this case did not occur until 1997 or 1998 and that accordingly their cause of action did not accrue until then.  Counsel for the Defendants/Applicants argued that the damage occurred in 1988 or alternatively in 1991 and that accordingly the Plaintiffs’ right to recover in tort is time barred.
Counsel for the Plaintiffs/Respondents relied upon the decision of the House of Lords in the case of Pirelli General Cable Works Limited v. Oscar Faber and Partners (a Firm), [1983] 2 AC 1.  Counsel for the Defendants/Respondents relied upon the decision of O’Hanlon, J., in the case of Doyle v. C. and D. Providers (Wexford) Limited [1994] 3 IR 57, a decision of the High Court on appeal from the Circuit Court and the decision of Geoghegan, J., (then of the High Court) in the case of Irish Equine Foundation Limited v. Robinson and Ors [1999] 2 ILRM 289 at 290.
In the case of Pirelli v. Oscar Faber and Partners (a Firm)  Lord Fraser of Tullybelton delivering the unanimous verdict of the House of Lords held as follows at page 16 of the Report:-
“..... There is an element of confusion between damage to the Plaintiff’s body and latent defect in the foundations of a building.  Unless the defect is very gross it may never lead to any damage at all to the building.  It would be analogous to a predisposition or natural weakness in the human body which may never develop into disease or injury.  The Plaintiff’s cause of action will not accrue until damage occurs, which will commonly consist of cracks coming into existence as a result of the defect even though the cracks or the defect may be undiscovered and undiscoverable.  There may perhaps be cases where the defect is so gross that the building is doomed from the start and where the owner’s cause of action will accrue as soon  as it is built, but it seems unlikely that such a defect would not be discovered within the limitation period.  Such cases, if they exist, would be exceptional.”

In that case the Defendants were a firm a consulting engineers who had been engaged by the Plaintiffs to advise them in relation to a building.  The building included a chimney about one hundred and sixty feet high.  The chimney was made of precast concrete.  Unfortunately the concrete used for the refactory inner lining of the chimney was partly made of a relatively new material called Lytag which was unsuitable for the purpose.  Cracks developed and eventually the chimney had to partly demolished and replaced.  The chimney was built during June and July 1969.  The Trial Judge found on the evidence that damage in the form of cracks near the top of the chimney, must have occurred not later than April 1970 which was more than eight years before the writ was issued.  
In the present case, Mr. McLoughlin, gave evidence that having seen the cracks in October 1998 and having discussed the matter with the first named Plaintiff, he, as an expert, was satisfied that the cracks which he identified as due to an excess of iron pyrites in the construction blocks were of recent origin.  He described the cracks as ranging from 2mm down to hairline.  No evidence was called by the Defendants/Applicants to refute this opinion despite the fact that a joint inspection was carried out by engineers for each party on the 16th April, 1999, as appears from a letter dated the 8th June, 1999 from Messrs Donal O’Hagan & Company  Solicitors for the Defendants/Applicants to Mullaneys, Solicitors for the Plaintiffs/Respondents.  The Defendants/Applicants did not offer any evidence to link the cracking which had occurred in the garage wing of the house in 1991 with that which Mr. McLoughlin categorised as of, “recent origin” in 1998.  After the 1991 cracking in the relatively limited area of the garage wing of the house had been remedied there were no further complaints by the Plaintiffs until May 1998.  In the circumstances I am satisfied  that the cracking due to the excess of iron pyrites in the block work of the dwelling house did not develop until well within the limitation period of six years prior to the 4th June, 1999 the date when the plenary summons in this action was issued.  To draw any other inference would be to attribute a wholly unnatural meaning to the phrase, “of recent origin” used by Mr. McLoughlin.
Counsel for the Defendants/Applicants submitted that if the law as stated by the House of Lords of the United Kingdom in  the case of Pirelli v. Oscar Faber and Partners (a Firm), was substantially in accordance with the law of this Country, this dwelling-house because of the defective block work was a building, “doomed from the start” so that the cause of action accrued and time began to run when the dwelling house was built in 1988.
Mr. McLoughlin agreed in cross-examination that the blocks were unsuitable from the start and should not have been used.  He said that the blocks were unsuitable only because of the danger of the eventuality which in fact occurred in this case.  He said that the blocks were otherwise capable of functioning but carried a risk which any competent builder would find unacceptable, and which could not be eliminated by the use of plastering or pebble dashing.  This risk was that a sufficiently rapid chemical reaction could occur within the blocks if they became water saturated  in the presence of oxygen, - a not unusual occurrence in the climatic conditions of the West of Ireland and this would result in cracking and rust staining of the blocks.  While Lord Fraser was prepared to assume that defects could exist which were so gross as to doom a building from the start he considered that such cases would be exceptional.  In  the Pirelli case it was held that the cause of action accrued in Spring 1970 when, as found on the evidence by the Trial Judge, damaged in the form of cracks near the top of the chimney must have come into existence whether observed at the time or not.  I find the essential facts of that case to be indistinguishable from the facts of the present case.  The presence of the iron pyrites like the presence of “Lytag”, was a latent defect in the structure which though predisposing the building to damage might never lead to any actual damage to the building at all.  In the case of Ketteman v. Hansel Properties Limited & Ors [1987] AC 189, it was pointed out by Lord Keith of Kinkel at p.205 of the report that a building should not be considered “doomed from the start”, for purposes of statutes limitation merely because it had a latent defect which must inevitably result in some damage at some later stage.
In my judgment the decision of O’Hanlon, J., in the case of Doyle v. C. and D. Providers (Wexford) Limited, [1994] 3 IR 57, does not assist the Defendants/Applicants.  Though damages for negligence and breach of duty was pleaded, there is no other indication from the judgment that any case in tort was argued before the learned Judge.  There is, for example, no reference in the report of the judgment of questions of liability for the sale of non dangerous defective products or of the recovery of damages for pure economic loss being raised and considered by the Court.  The learned Judge identified the date when the cause of action accrued as being the date when:- 
“..... The Defendant made delivery to him of materials which were at variance with those which he had ordered and which were the subject of the contract between the parties”

The learned Judge then went on to remark:-
“..... The fact that the Plaintiff through no fault of his own may have remained in ignorance of the Defendants alleged breach of contract for a period of several years....... Did not prevent the claim becoming statute barred.”

Despite the headnote I am quite satisfied that this case was decided as a matter of Contract Law only.  The unsuccessful attempt by the Plaintiff to amend the pleadings immediately prior to the hearing of the Appeal by pleading fraud lends further support to this view.
In the instant case Counsel for the Defendants/Applicants submitted that as the damage pleaded by the Plaintiffs/Respondents in the Statement of Claim was solely economic loss, with no element of injury to any person or damage to any property other than the alleged defective structure itself they could not be successful in claiming damages based upon negligence.  Counsel for the Plaintiffs/Respondents argued that the Law in this Jurisdiction allows for the recovery of such damages and referred to the very well known decision of Costello, J., (as he then was) in Ward v. McMaster and Another, [1985] IR 29.
In my judgment the Court is not concerned with this issue at the Trial of this Preliminary Point of Law.  The Court is not at this time considering whether the Plaintiffs/Respondents have a case in tort or in contract: the sole issue now before the Court is whether, if such claims exist they are time barred.  The Court does not at this time express any view whatsoever as to whether the claims of the Plaintiffs/Respondents if they are not time barred, will or will not be successful in law or on the merits.
In my judgment the decision of Geoghegan, J., in the High Court in the case of Irish Equine Foundation Limited v. Robinson and Others, [1999] 2 ILRM 289 at 290 does not assist the Defendants/Applicants.  In that case the learned Judge accepted that if experts with the same qualifications as the Defendants experts had been retained by the Plaintiffs to inspect the roof in question just after it had been constructed they would, if the Plaintiffs allegations were correct, have reported that the roof was defectively designed.  The learned Judge says at page 294 of the report:-
“It would seem to me that if the roof, the subject matter of this action was defectively designed for the reasons suggested by the Plaintiff this would have been manifest at any time to any expert who examined it”.

Earlier in his judgment the learned Judge said:-
“ I think therefore that the Heagarty v. O’Loughlan decision must be taken as authority for the view that prior to the Statute of Limitations (Amendment), Act, 1991, the cause of action for personal injury did not arise until the injury was manifest.......”

He then concluded that these principles now applied only to cases of damage to property though he appears to express some hesitation in this regard.
In that case the learned Judge found on the evidence and the pleadings that it was manifest that the roof was incorrectly designed immediately after construction was completed or even before it was completed and that pure economic loss would inevitably be involved in making it good.  
In the present case I am satisfied on the evidence that the damage only came into existence not long prior to October 1989 or in the terminology used by Geoghegan, J., was not manifest until then.  It is not necessary for the Court to express an opinion on the vexed question of “discoverability”, because in this case the damage having come into existence not long prior to October 1998 it was drawn to the attention of Mr. Lawlor in May 1998 and by Mr. McLoughlin in October 1998 and the plenary summons was issued on the 4th June 1999 well within the limitation period. 
The Court therefore finds that the cause of action pleaded by the Plaintiffs/Respondents in contract is time barred, but that the cause of action against the Defendants or either of them pleaded in tort is not time barred.