THE SUPREME COURT
[Appeal Nos. 39/2016 and 40/2016]
LIAM BRANDLEY and WJB DEVELOPMENTS LIMITED
HUBERT DEANE trading as HUBERT DEANE & ASSOCIATES and JOHN LOHAN trading as JOHN LOHAN GROUNDWORKS CONTRACTOR
JUDGMENT of Mr. Justice William M. McKechnie delivered on the 15th day of November, 2017
1. This judgment concerns the commencement date of the six-year limitation period for property damage claims founded in the tort of negligence. The Appellants contend that the Court of Appeal has, in substance, applied a test of discoverability in this case, despite stating in its judgment that such was not the test. This Court certified three points upon which leave to appeal was granted, although in essence these points ask but one question: when does time run for the purposes of the Statute of Limitations in such claims? Of central importance to the determination of this appeal is when the cause of action in negligence accrued. That issue in turn hinges on what constitutes actionable ‘damage’ for the purposes of the law of negligence.
Definitions and Descriptions
2. As will become clear over the course of this judgment, there would appear to be five distinct possible starting points from which the clock might run for limitation purposes. This area of the law has been bedevilled with misdescription, lack of clarity and confusion between terms which are quite different, and with their interchangeable use when it is ill-judged and inappropriate to do so. Thus, it may be worth explaining in a little more detail at the outset what each of these different commencement points means. It will be appreciated that they form a spectrum of potential starting points for the limitation clock, with the date of the wrongful act being the earliest and thus the most defendant-friendly, and the date of actual discovery being – usually – the furthest along that spectrum and therefore the most beneficial to the plaintiff. What is meant by some of these events may seem obvious, and will be on some occasions, but not always; others must be ascribed a more technical meaning, and the distinction between them, even though subtle and nuanced, can be critical. In practice some of these dates may frequently coincide with one another, but that will not always be so.
3. The following list sets out just what is meant by each of these terms for the purposes of this judgment:
Each of these descriptions is deliberately succinct as the same are intended as an interpretive tool to aid the reader in navigating this judgment. It should be noted, however, that such terms are more fully discussed in the rest of this judgment and are again summarised, in greater detail, in the conclusion section hereof.
i. The date of the wrongful act – this refers to the date on which the defendant committed the act or omission said to constitute the wrong, even if the consequent damage did not result on that same date. This is the date of the breach of duty.
ii. The date that the damage occurs – this refers to the date on which the loss which is sought to be recovered actually happened, even where that is subsequent in point of time to the wrong which caused it.
iii. The date that the damage is manifest – this refers to the date on which the damage was capable of being discovered and capable of being proved, even if there was no reasonable or realistic prospect of that being so.
iv. The date of discoverability – this refers to the date on which the damage could or ought with reasonable diligence to have been discovered.
v. The date on which the damage is actually discovered – this refers to the date on which the plaintiff in fact discovered the property damage.
Background and Procedural History
4. This case arises out of alleged negligence, breach of duty, including breach of statutory duty, and breach of contract in the construction of two houses at Sycamore Court, Corrolough, Williamstown, Co. Galway. Mr. Liam Brandley, operating through his company, the Second Named Plaintiff/Respondent, WJB Developments Ltd., was the developer of this project. Mr. Brandley and the company are collectively referred to in this judgment as “the Plaintiffs” or “the Respondents”. The First Named Defendant/Appellant, Mr. Hubert Deane, is a consulting engineer who was retained to supervise the construction of the foundations and to inspect them when they were originally laid, as well as to certify, which he did, that the foundations and the houses built thereon were in compliance with the relevant planning permission and building regulations. The Second Named Defendant/Appellant, Mr. John Lohan, was the contractor whose work included laying the foundations of the houses; this was done in March, 2004. Mr. Deane and Mr. Lohan are together referred to as “the Defendants” or “the Appellants.”
5. The two houses in question were part of a small terrace of three houses which were constructed on one common raft foundation. The Plaintiffs’ case is that the two houses developed cracks in December, 2005. It is their contention that this happened as a result of the use of inadequate, soft and compressible materials in the foundations, in that the wrong type of stone was used. As the issue on this appeal concerns the Statute of Limitations, it is useful at the juncture to set out a timeline of the relevant dates. They are as follows:
The precise date of completion of the houses was the subject of some debate at trial – see paras. 15 and 17, infra.
• The foundations were completed in March, 2004.
• On the 4th September, 2004, Mr. Deane issued his Certificate of Compliance with planning permission and with the building regulations.
• The houses in question were completed some time between September, 2004 and January/February, 2005.
• In December, 2005, Mr. Brandley observed that cracks had appeared in each of the houses.
• The Plaintiffs issued their Plenary Summons on the 30th November, 2010.
6. It is worth pointing out as part of the lead-in that the other house on the common foundation, which was completed earlier than the other two at the behest of its prospective purchaser, was also the subject of litigation. Its owner, Mr Aidan Conneely, sued both defendants named in this case, as well as WJB Developments Limited, in respect of cracks that appeared in his house in December, 2005. In those proceedings, which did not involve a limitation issue, the High Court determined that both the engineer and contractor were negligent, although since the amount of damages had been agreed by these parties, it was not necessary to apportion liability as between them. The claim over against WJB Developments for a contribution was dismissed by judgment of the High Court delivered on the 11th November, 2011.
7. As is well known, the general limitation period for an action founded on tort (subject to several exceptions, such as personal injuries and defamation actions) is six years from the date on which the cause of action accrued (section 11(2)(a) of the Statute of Limitations 1957, as amended (“the Statute of Limitations” or “the 1957 Act”)). The Plaintiffs’ case is one founded solely on common law negligence, as it is acknowledged by all that their cause of action in contract is clearly statute-barred. The critical question, therefore, is when did the cause of action accrue: if the relevant date is March or September, 2004, then the proceedings are out of time and the claim cannot proceed; on the other hand, if, as the Plaintiffs contend, the cause of action accrued when the cracks appeared in December, 2005, then their case was initiated within time. It was with this sole point that the judgments of the High Court, the Court of Appeal and now this Court are concerned.
The High Court
8. As above noted, the Plenary Summons issued on the 30th November, 2010, with the Statement of Claim being dated the 9th March, 2011. The particulars of negligence alleged against Mr Deane included, inter alia, the furnishing of a certificate that both houses were structurally sound, failing to ensure that adequate material was used in the foundations, and failing to supervise or adequately monitor the work carried out by Mr Lohan. As against Mr Lohan it was alleged, inter alia, that he caused or permitted a defective and dangerous foundation to be laid, that he used materials that were soft, compressible and inappropriate for use as constituent elements of a foundation, and that he caused or permitted cracks to appear in the houses. Mr Lohan’s Defence was delivered on the 25th July, 2012, and that of Mr Deane followed on the 15th November, 2012. Both Defendants alleged, as their only substantive plea, that the claim was statute barred having regard to the Statute of Limitations 1957. By Notice of Motion dated the 15th July, 2014, the First Named Defendant sought a trial of preliminary objections raised in his Defence, namely, the plea concerning the time bar (and related matters which are no longer relevant), with a view to having the Plaintiffs’ claim against him dismissed without a determination on the merits.
9. Mr Deane’s application was heard by Barr J. in the High Court. The learned judge delivered a reserved judgment on the 28th November, 2014. He took the view that as there was a factual dispute between the parties as to when the actual damage occurred to the property, the same could not be determined on affidavit only. In such circumstances it would be necessary to hear oral evidence in order to reach a conclusion on that issue and thus on the Statute of Limitations point. The application was therefore refused, but the limitation plea was allowed to remain a live issue, to be determined thereafter as part of the trial of the action.
10. Curiously, there does not appear to have been any similar application made by Mr Lohan or his company; however, in light of the fact that the limitation point was now to be determined as part of the overall case, these defendants fully engaged with this issue as if they too had separately sought to have the claim dismissed under the 1957 Act.
11. The case itself, which was heard before Kearns P. on the 16th April, 2015, proceeded in a very truncated fashion, with the learned President declaring at the outset that as the point was essentially a net legal one, “only short formal evidence [would] be required to establish the key dates of the laying of foundations, the purchase by the client [and] when the defects became apparent”. As no objection was taken to this, the case proceeded thus. Accordingly, only two witnesses gave evidence: Mr Brandley and Mr Deane.
12. Following his direct examination, Mr Brandley was cross-examined by counsel on behalf of each Defendant. Mr Deane then gave evidence, and was cross-examined by counsel for the Second Named Defendant and counsel for the Plaintiffs. As will be seen, the Appellants/Defendants very much put all of their eggs in one basket, in that negligence was quite freely admitted; their defence, in effect, certainly on the liability side, relied solely on the success of the limitation plea. This must surely have been the correct approach in light of the High Court’s findings in the earlier Conneely case (see also paragraph 6, supra, and paragraphs 37 and 38, infra).
13. First, however, to deal with Mr Brandley’s testimony. The following exchanges from his examination-in-chief are of relevance to the issue before the Court:
“Q. Was there any damage evident when [Mr Conneely] bought the [first] house from you … when he moved in in December, 2004?
A. No none, none whatsoever.
Q. You, in fact, do you know Mr Conneely?
A. I do, I used drink in the same bar in the same town. I knew him well like.
Q. When was the first time that you became aware of any damage to his house or when did the damage occur to his house?
A. It would be December, 2005. Around that time he came to me and he said he had cracks appearing in the walls. And I thought they might be just hairline cracks. You get cracks from first off in any house so he said it was December 2005 going into 2006 I looked at it again.
Q. What happened as a result of that?
A. The cracks got worse and … then he came back to me then again and I hired an engineer to look at it.
Q. Then we know that ultimately he brought proceedings against you and the other two parties that were the subject matter of the previous case. Now, in relation to house 2 and 3, can you indicate when damage occurred to those houses?
A. Probably hairline cracks appeared in 2005, or the end of 2005 into 2006 there was hairline cracks like.
Q. You had been renting out those houses yourself. Did you go to inspect after Mr Conneely complained or how?
A. Oh I did. I looked around to see what was there in the other two but it looked like hairline cracks. Then he [came] back to me later on and said they were getting worse so I hired an engineer to look at it.
Q. Prior to letting out those houses in January/February 2005, was there any damage to them at that stage?
14. Following a brief aside, the direct examination continued as follows, starting with an intervention from the judge:
“The President: […] The issue is did the damage occur prior to six years before the 30th November, 2010, or did it not. That is the real issue.
Q. You know what the issue now is in the case Mr Brandley. The judge has just succinctly summarised it. As far as you are aware, when did the damage start?
A. December 2005, into 2006 Aidan Conneely came to me about the cracks and that. That is the first time I seen any of them.
Q. There was never any complaint to you before that?
Q. And when you were renting out the property in early 2005 was there any damage?
A. Tenants never said anything.
Q. Did you see any damage yourself?
A. Not until I went in and looked and I seen hairline cracks afterwards but I never had reason to go into the houses because they were rented and they made no complaint to me so.”
15. Under cross-examination, Mr Brandley accepted that the last certificate issued by Mr Deane was dated the 4th September, 2004, and that this defendant had no further dealings with the development after that, although he stressed that the houses were not finished until December, 2004. He refused to accept that the foundations must have been defective from the day they went in, and maintained that he saw no flaws or “snags” in the house prior to December, 2005. He also acknowledged that he himself had been sued over the foundations by Mr Conneely a number of years before the issue of his own proceedings in 2010.
16. In his own examination-in-chief, Mr Deane stated that he had been asked to submit a Commencement Notice for the project, that the foundations were in situ in March, 2004 and that he sent the Notice in early April, 2004. He said that the last certification of the development was on the 4th September, 2004. Mr Deane gave evidence that he certified that the houses were in compliance with building and planning regulations and that the foundations were put in in a good manner; however, he also said that he had not inspected the stone going in, but instead had inspected the steel in the foundation when that was in. It is worth setting out the entirety of the brief cross-examination of Mr Deane by counsel on behalf of Mr Lohan. It went as follows:
“Q. Mr Deane, the foundation was defective, isn’t that right?
A. It appears so.
Q. It was defective in that or because inadequate materials were used in its construction?
A. That is what I am led to believe. I didn’t inspect the stone going in but that is what we’re led to believe.
Q. If you had carried out an inspection, you would have detected the difficulty, wouldn’t you?
A. Absolutely, yes.
Q. Putting it another way, whether you carried it out or anyone of your skill would have carried it out, they would have detected the flaw or the defect in that foundation?
Q. They would have done so at any time from the moment the foundation was laid, which is March 2004?
Q. The flaw was there from the very beginning?
A. It appears so.
Q. The defect, the problems that [are] set out through the Plaintiff’s legal team, the complaint that they didn’t use proper materials. Would you accept [that] Mr Lohan did not use proper materials and do you accept that to be the case?
A. It appears to be the case at this stage.
Q. And, as I say, it is in March 2004 [that] the foundations were laid and then of course the rest of the construction continued but it is now a problem that is going to emerge hereafter?
Q. The flaw, the defect, the want of care on the part of the constructor has taken place, isn’t that right?
A. Correct. Yes.”
17. Mr Deane was next cross-examined by counsel for the Plaintiffs. The following relevant exchanges occurred:
“Q. You didn’t inspect the foundations that were opened and poured, or did you?
A. I didn’t inspect the dig. The foundations were opened at steel level before they poured the concrete and I would consider that an open foundation which would be trenches and the steel laid in place and it is shuttered out ready to receive concrete.
Q. In fairness to you, Mr Deane, you do accept you carried out an inadequate inspection and you are not trying to stand over that, isn’t that right?
A. I probably should not have done what I did at the time. If right was right I should have gone back and taken out the forty or fifty loads of fill. The project was right beside my own office. We are all mates. We all socialise together. I don’t think I would be too well got if I ordered fifty loads of stone to come out and I had to inspect a dig.”
Mr Deane disagreed when it was put to him that the building was finished only in December, 2004; he stated that he would not have issued a certificate of compliance in September of that year if he had not considered that the houses were complete. Although the houses needed fits outs, painting etc. ahead of a prospective purchaser moving in, Mr Deane was of the view that the structures of the houses were finished in September, 2004. He also stated that he had no idea when the cracks appeared in the houses.
18. That was the entirety of the evidence. Having heard from the two witnesses, the President concluded that the Plaintiffs could not succeed. He took the view that the case law firmly excludes a discoverability test:
“I have come to the conclusion, somewhat regretfully, that the plaintiff can’t succeed and no authority has been opened to me to displace the views expressed by Ms Justice Dunne … in Murphy v. McInerney Construction Limited  IEHC 323, along with other cases which are referred to by Mr Justice Barr in his judgment, [which] firmly exclude a discoverability test as being the relevant starting date and I would have thought if there was any authority that could be invoked on behalf of the plaintiff in this particular case it would have been … [and] that they would have been included in a book of authorities which comprehensively laid out the law to suggest that a different view could be taken and it was open to the Court to take a different view than has been taken in the cases and judgments of Mr Justice McCarthy and the judgment of Mr Justice Birmingham and the judgment of Ms Justice Dunne.”
The reference to Mr Justice McCarthy must relate to the judgment of McCarthy J. in Hegarty v. O’Loughran & Edwards  1 I.R. 148 and the reference to Mr Justice Birmingham must refer to his judgment in Hegarty v. D&S Flanagan Brothers Ballymore Ltd and ors  IEHC 263, both of which are referred to later in this judgment.
19. The learned President also noted that Mr Brandley may have recourse to an alternative remedy arising from the fact that no proceedings were commenced within the statutory period; that, however, was a matter for another day. However, in the absence of any law being opened to suggest a different view on the limitation point, Kearns P. was of the opinion that he had no alternative but to uphold the Defendants’ contention and dismiss the Plaintiffs’ claim.
20. The above represents the entirety of the judgment; as such it can be seen that no findings of fact upon which his conclusion was based were made or set forth therein. In particular, it does not appear that the High Court determined, as a matter of primary or secondary fact, when the cracks in the properties occurred or became manifest. This failure presents considerable difficulties in a number of areas, including those of analysis, determining the appropriate test, and, depending on what that test might be, in deciding what final Order this Court can or should make.
The Court of Appeal
21. The plaintiffs appealed to the Court of Appeal. The judgment of that Court was delivered by Ryan P. (Irvine and Hogan JJ. concurring) on the 2nd March, 2016 ( IECA 54). The learned President of that Court took the view that Kearns P. “was in error in this case”; as he explained at paragraph 15 of his judgment:
“15. … It is clear that negligence by itself without the accompaniment of damage or loss is not actionable. The plaintiffs did not suffer damage at the time when the defective foundations were installed. When the defective foundation was put in, the only complaint that the plaintiffs could have had was that the foundation was defective. They had not suffered any damage at that point – there was merely a defective foundation – but that is not damage of a kind that is actionable in tort. Indeed, it seems to me to be very questionable whether there was an action in breach of contract at that time, but I do not have to consider that on this appeal.”
22. The President then referred to recent jurisprudence in the neighbouring jurisdiction which in his view made it clear that financial loss in respect of specific defects does not give rise to a cause of action in negligence unless the defects result in damage to other property (see Robinson v. P.E. Jones (Contractors) Ltd.  3 WLR 815). Returning to the case at hand, Ryan P. found that the cause of action accrued in December, 2005, as the defective foundations did not constitute ‘damage’ for the purpose of the tort of negligence:
“17. The evidence here is that the foundation of these houses was defective, but it did not cause damage at that time. It caused damage in December 2005. The evidence is not that there was hidden damage which became discoverable at a later point; it is that the damage resulting from the defective foundations happened in December 2005.
18. It seems to me to be clear that no damage resulted to the plaintiffs in March 2004 when the foundations were installed. I do not agree that the plaintiffs had any right of action at that point. They could not prove any loss. Moreover, it seems to me that it would have been quite open to the second defendant, Mr. Lohan, or the first defendant, as the consulting engineer, to have subsequently discovered or decided to investigate the condition of the foundations. They would have been entitled to put right any defects that they identified and the plaintiffs would have had no right of action as a result. There could have been some delay in the completion of the project, but that would have given rise to entirely different considerations. In respect of the specific acts of negligence, the fact that the defendants might have identified the defects and remedied them is an illustration of the absence of loss at that point and the unavailability to the plaintiffs of any right of action there and then.”
23. The learned President noted that these observations were “no more than an expatiation upon the proposition outlined in [Hegarty v. O’Loughran & Edwards  1 I.R. 148 (“Hegarty v. O’Loughran”)], namely, that the cause of action does not arise until loss or damage have been sustained by the plaintiff.” Accordingly, he found that the Defendants had “pitched the beginning of the period of limitation at too early a point that does not take account of the requirement that damage be actually suffered by the plaintiff in order to complete the cause of action” (para. 20). Ryan P. therefore allowed the appeal. Given the express admissions of negligence, he would have remitted the matter to the High Court for an assessment of damages only, but as that issue was not before the Court of Appeal he left it as a question to be decided by the High Court.
Application for Leave to Appeal to this Court
24. The Defendants/Appellants each sought leave to appeal from the entire decision of the Court of Appeal, which applications were opposed by the Plaintiffs/Respondents. By a Determination dated the 1st June, 2016 ( IESC DET. 70), this Court, having asked rhetorically whether the law was altered by the Court of Appeal, held that the applications had raised a matter of general public importance and granted leave to appeal on the following points:
i. Does time run for the purpose of the Statute of Limitations in property damage claims from when the damage is manifest? (“Manifest”)
ii. Does time run for the purpose of the Statute of Limitations in property damage claims from when the damage is discovered? (“Discovered”)
iii. Does time run for the purpose of the Statute of Limitations in property damage claims from when the damage occurs? (“Occurs”)
25. As will readily be appreciated, these three points in essence represent separate possible answers to what is really the overarching question to be determined on this appeal; simply put, it asks from when does time run for the purpose of the Statute of Limitations in property damage claims? Indeed, although leave was not granted directly on any further possibility, it will also be necessary, as is evident from paras. 2 and 3, supra, to address a fourth and even a fifth option, namely, whether time runs from when the act or omission said to constitute negligence took place (“the Wrongful Act”) or from when the damage could or ought reasonably to have been discovered (“Discoverability”). It will become apparent over the course of this judgment that the key issue in this case is the question of what constitutes actionable ‘damage’ for the purposes of the tort of negligence, for the same will determine when the cause of action can be said to have accrued.
Submissions of the Appellants
26. The written submissions filed on behalf of each Appellant are virtually verbatim copies of one another. Therefore, unless otherwise indicated, the following can be considered to represent the position of both Appellants. They submit that the Court of Appeal erred in law in holding that the defective foundations did not constitute damage for the purposes of the tort of negligence, and that that Court misapplied the established test for determining the date on which a cause of damage founded on property damage accrues in law. It is submitted that the Court of Appeal should have dismissed the Plaintiffs’ appeal based on Mr. Deane’s evidence that he would readily have detected defects in the foundations had he inspected them when they were laid in March, 2004. That Court, in failing to hold that the defective foundations constituted damage, and finding instead that damage only occurred when cracks appeared in the walls of the houses in December, 2005, in substance applied the test of discoverability, despite unequivocally stating earlier in its judgment that that was not the test to be applied in property damage claims in negligence.
27. The Appellants submit that there was uncontroverted evidence from Mr. Deane to the effect that the foundations were defective from the moment they were laid. The Court of Appeal ignored this evidence and instead drew a notional and unreal distinction between the defective foundations and the cracks in the walls, with only the latter being recognised as ‘damage’. It is submitted that there was no evidential or other basis for the Court of Appeal to treat the defective foundations other than as damaged foundations and therefore actionable damage. Thus ‘damage’ clearly occurred in March, 2004 or, at the latest, September, 2004, so far as the negligent certification by Mr. Deane is concerned; either way, proceedings were not commenced until November, 2010, in excess of six years after the critical date. The cause of action is therefore statute barred.
28. The Appellants refer to much case law in support of these submissions. Hegarty v. O’Loughran is relied upon for the proposition that the time limit in negligence actions begins to accrue on the date on which damage actually occurs and manifests itself, and not from the date on which damage is discovered. They also cite the decision in Irish Equine Foundation Ltd v. Robinson  2 IR 442, where the High Court (Geoghegan J.) held that the defects in the roof of an equine centre had manifested themselves from the time that the building had been erected and not on the later date when leaks occurred. The plaintiff’s claim in that case was, accordingly, held to be statute-barred, as proceedings had not issued within six years of the construction of the buildings. The Appellants further rely on the judgment of Dunne J. in Murphy and Anor v. McInerney Construction Ltd  IEHC 323 as authority for the submission that there is no discoverability rule for property damage claims under Irish law.
29. The Appellants cite the decision of this Court in Gallagher v ACC Bank PLC trading as ACC Bank  2 I.R. 620 (“Gallagher v. ACC Bank”) in support of the contention that it is not necessary for a plaintiff to wait for the full quantification of losses before commencing an action for damages and that the date of accrual for a cause of action for property damage commences when there is a defect/damage which is discernable and provable. In other words, time begins to run once provable property damage, which will require the plaintiff to incur costs in remedying it, and thereby a defect capable of attracting compensation, occurs in or to a plaintiff’s property. A defect in property which requires remediation therefore constitutes damage, and proceedings in respect thereof must be commenced within a period of six years. It is submitted that the date on which the foundations were laid in March, 2004, is the date on which damage was discernable and provable in the context of negligence. As the defective foundations are a particular of negligence alleged by the Respondents in their Statement of Claim, it follows that the cause of action accrued at that time, notwithstanding that subsequent damage was caused to the walls in December, 2005 and 2006.
30. The Appellants also cite the High Court decisions in Hegarty v. D&S Flanagan Brothers Ballymore Ltd and ors  IEHC 263 (Birmingham J.) and Murphy v. Joe O’Toole & Sons Ltd and Anor  IEHC 486 (Baker J.). Applying those cases to the facts of the within proceedings, it is said that it is clear that the foundations were laid more than six years prior to the commencement of the proceedings and that they were defective at that time; accordingly, any negligence and accompanying damage (i.e. the defects in the foundations which later caused further damage) occurred more than six years prior to the institution of proceedings, and therefore the claim is time barred. The Appellants moreover rely on the judgment in Murphy v. Joe O’Toole & Sons and that of O’Donnell J. in Gallagher v. ACC Bank in support of the contention that where a claim is made in both contract and tort, a court should scrutinise it carefully to ascertain whether the true cause of action is grounded in contract and should not engage in an artificial exercise of distinguishing between or decoupling the two claims. It is submitted that on either basis, the claim against the Appellants is statute barred.
31. Finally, Mr Deane has submitted that by reason of the undisputed evidence that his last involvement in the matter concluded with the certification in September, 2004, it should follow that as proceedings were not instituted within six years of that point the claim as against him is stale. He also asserts that as the reasonable inference from the judgment of the Court below is that the status of the works until in or about December, 2004 did not give rise to a cause of action, and as it was the Second Named Respondent as builder of the development who carried out works after March, 2004, it is difficult to avoid the conclusion that it was the Second Named Respondent which caused or contributed to the “damage” which rendered the matter actionable. Any such subsequent works were not certified by Mr Deane and thus there is no basis to bring a claim against him in relation to such works. Accordingly, Mr Deane contends that the claim against him, at least, must be statute barred.
Submissions of the Respondents
32. The core of the Respondents’ submissions is that the damage in this case occurred and manifested itself in December, 2005, and that the summons issued within time. There was no evidence of damage occurring or manifesting at an earlier date. They submit that the Appellants are asking the Court to hold that time runs from a period in which a defect was not manifest and was, as a matter of practicality, undiscoverable.
33. It is pointed out that Mr Brandley gave evidence that damage occurred in or around December, 2005 and that he was not challenged on his dates; instead Mr Deane, who did not in fact inspect the foundations or stone as laid at the time of his admittedly negligent certification, stated that had he carried out such an inspection, he may have detected a flaw or defect. The Respondents submit that this evidence of Mr Deane was self-serving speculation in the context of a preliminary application concerning the Statute of Limitations. Furthermore, Mr Deane did not give evidence to contradict Mr Brandley’s evidence as to when the damage occurred. As the onus of proof rested on the Appellants on the limitation point (see, for example, Clarke v. O’Gorman  3 I.R. 340 and Wicklow County Council v. Fortune  IEHC 406), it is submitted that the categorical evidence of Mr Brandley as to when the damage occurred and manifested itself should be preferred to Mr Deane’s speculation in relation to a defect.
34. The core of the Respondents’ submissions is that a defect does not equate to damage. They cite much case law in support of this proposition, including Pirelli General Cable Works Ltd. v. Oscar Faber & Partners  2 A.C. 1, London Congregational Union Incorporated v. Harriss and Anor  1 All ER 15 and Ketteman v. Hansel Properties Ltd.  1 AC 189. They state that this was acknowledged by Birmingham J. in Hegarty v. D&S Flanagan Bros.  IEHC 263. These cases are analysed in some detail below. They rely also on O’Donnell v. Kilsaran Concrete Ltd.  1 I.L.R.M. 551 and note that the distinction between ‘defect’ and ‘damage’ was not addressed in Irish Equine. The Respondents submit that the Appellants are mistaken in equating the alleged defect in the foundations with damage, and that they called no evidence to the effect that the defective foundations caused damage or gave rise to any loss to the Respondents. Defects in the foundations do not amount to damage such as to make the tort of negligence actionable. There could be no claim until the damage occurred and manifested itself (which the Respondents take to mean “became apparent”). A defect might never cause damage and the Appellants have conflated the two. Moreover, the Respondents point out that at no stage have the Appellants relied on the “doomed from the start” principle which emerges from Pirelli.
35. The Respondents rely on several decisions of this Court to the effect that the tort of negligence is not actionable in the absence of proof of actual damage, i.e. that a cause of action in tort does not accrue until the two component parts have occurred, namely, the wrong and the damage (Hegarty v O’Loughran; Gallagher v ACC Bank). They also refer to several cases, including Pirelli, in support of the proposition that a cause of action will accrue only when physical damage occurs to the building. Moreover, they cite Gallagher v. ACC Bank in support of their submission that a plaintiff will only have a cause of action in negligence when there is a breach of duty resulting in actual as opposed to prospective loss or damage; per Fennelly J. at p. 656 of that judgment, “I do not think the cause of action accrues when there is a mere possibility of loss.”
36. The Respondents stress at several points in their written submissions that they are not making a case for a discoverability test in property damage claims. On their central argument, discoverability is not needed to defeat the Statute in this case. Simply put, the cause of action accrued when the damage manifested itself, which was when the cracking occurred. The Respondents do, however, note that a discoverability test was preferred in New Zealand and upheld by the Privy Council in Invercargill City Council v. Hamlin  AC 624. They also observe that the Supreme Court of Canada in Kamloops v. Nielsen  2 SCR 2 declined to follow Pirelli, considering a discoverability test, potentially involving the investigation by the courts of facts many years after their occurrence, to be a lesser evil than a law which bars a claim before a plaintiff is even aware of its existence.
37. It may be useful to state at the outset what this case is not about; this can be deduced from the manner in which it was both pleaded and argued. The Defendants/Appellants freely admitted that a duty was owed and that negligence was committed – their sole point of defence related to the Statute of Limitations. Such was the context within which the trial judge was asked to resolve the limitation issue, and to do so in accordance with conventional principles. Therefore no issue arises as to when or in what circumstances a builder might owe a duty of care in respect of the construction or repairing of a house, or the class of persons to whom such a duty might be owed, or the type of damage which such duty is intended to cover. For example, this case is not about whether damages for qualitative non-dangerous defects, discovered and remedied at a loss before causing physical injury or damage to other property, is recoverable.
38. In addition, the position of public authorities, discharging public or statutory functions, does not arise either directly or by analogy. Moreover, the case was never presented as one involving pure economic loss, nor did any of the parties submit or even suggest that the case law in that respect, in particular that from the neighbouring jurisdiction, should be consulted, let alone considered or applied. Thus consideration of cases such as Ward v. McMaster  I.R. 337, Junior Books Ltd v. Veitchi  AC 520, Murphy v. Brentwood District Council  1 A.C. 398, Invercargill City Council v. Hamlin  3 NZLR 513, Glencar Exploration v. Mayo County Council (No. 2)  1 I.R. 84 and many other decisions in this field of jurisprudence is not required, at least insofar as the policy question of the existence and extent of a duty of care is concerned, nor would it be desirable to do so in the absence of necessity and submissions to that effect (see, in this regard, McMahon and Binchy, Law of Torts (4th Ed., Bloomsbury Professional, Dublin, 2013) at paras 13.71-13.75).
Introduction to the Statute of Limitations
39. Section 11(2)(a) and (b) of the Statute of Limitations 1957, as originally enacted, provided as follows:
“11.—(2)(a) Subject to paragraphs (b) and (c) of this subsection, 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.
(b) An action claiming damages for negligence, nuisance or breach of duty (whether the duty exists by virtue of a contract or of a provision made by or under a statute or independently of any contract or any such provision), where the damages claimed by the plaintiff for the negligence, nuisance or breach of duty consist of or include damages in respect of personal injuries to any person, shall not be brought after the expiration of three years from the date on which the cause of action accrued.
(c) … [not relevant]”
40. In circumstances which will later be explored, section 3(2) of the Statute of Limitations (Amendment) Act 1991 (“the 1991 Act”) substituted a single new paragraph for paras. 11(2)(a) and (b) above. In its amended form, it reads as follows:
“11.—(2)(a) Subject to 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.”
This section and its predecessor have previously been considered by this Court in several well-known decisions. The references to section 11(2)(c) and section 3(1) of the 1991 amendment exclude from this limitation period defamation actions and certain personal injuries actions, respectively. The former has no direct relevance to the within appeal, but as the law in this area has in some measure been developed in personal injuries cases, the latter is indeed of some significance.
41. In Tuohy v. Courtney & Ors  3 I.R. 1 (“Tuohy”), Finlay C.J., giving judgment for this Court on the constitutionality of section 11 of the 1957 Act, in particular subsections 1(a) (actions founded on simple contract) and 2(a) (actions founded on tort), explored the underlying rationale for having limitation periods in the first instance, as well as what the legislature is endeavouring to achieve in enacting them. As explained by the former Chief Justice:
“It has been agreed by counsel, and in the opinion of the Court, quite correctly agreed, that the Oireachtas in legislating for time limits on the bringing of actions is essentially engaged in a balancing of constitutional rights and duties. What has to be balanced is the constitutional right of the plaintiff to litigate against two other contesting rights or duties, firstly, the constitutional right of the defendant in his property to be protected against unjust or burdensome claims and, secondly, the interest of the public constituting an interest or requirement of the common good which is involved in the avoidance of stale or delayed claims.” (p.47 of the report)
42. Finlay C.J. expanded on this as follows:
“The primary purpose would appear to be, firstly, to protect defendants against stale claims and avoid the injustices which might occur to them were they asked to defend themselves from claims which were not notified to them within a reasonable time.
Secondly, they are designed to promote as far as possible expeditious trials of action so that a court may have before it as the material upon which it must make its decision, oral evidence which has the accuracy of recent recollection, and documentary proof which is complete, features which must make a major contribution to the correctness and justice of the decision arrived at.
Thirdly, they are designed to promote as far as possible and proper a certainty of finality in potential claims which will permit individuals to arrange their affairs whether on a domestic, commercial or professional level in reliance to the maximum extent possible upon the absence of unknown or unexpected liabilities.
The counter-balance to these objectives is the necessity as far as is practicable, or as best it may, for the State to ensure that such time limits do not unreasonably or unjustly impose hardship. Any time limit statutorily imposed upon the bringing of actions is potentially going to impose some hardship on some individual.” (p. 48 of the Report)
Such is not an exhaustive account of the considerations underpinning the existence of limitation periods but it certainly gives a broad overview of the competing interests at play and the balancing exercise which such statutes seek to achieve.
43. Another matter addressed by the Chief Justice in Tuohy was the precise nature of the constitutional right which the plaintiff claimed had been infringed. Referring to the judgment of Henchy J. in O’Domhnaill v. Merrick  I.R. 151, he stated that the Statute of Limitations does not constitute an invasion of the constitutional right of access to the courts. The reason for this was that it has long been understood that the statute will bar a claim if, and only if, it constitutes a defence plea. Thus the statute does not impact on a plaintiff’s right to sue, but rather on his right to succeed.
44. Finlay C.J. went on to refer to O’Brien v. Keogh  I.R. 144, which established that the right to litigate is a personal right of the citizen within Article 40 of the Constitution. He agreed that this right is an unenumerated personal right protected by Article 40.3.1°. However, on the facts of Tuohy, the Chief Justice did not find it necessary to conclusively determine whether that right also finds protection as an aspect of the property right protected under Article 40.3.2°; no mention was made of Article 43. In his view, on the facts of the case before him, there was no material difference in the constitutional protection which the right to litigate would have depending on which provision of the Constitution it fell under. This issue, which has not been definitively settled, does not require further consideration in the instant case.
45. This Court, of course, upheld the constitutionality of section 11 in Tuohy. In so holding it was guided by a number of considerations: these included, inter alia, first, the fact that, objectively viewed, the period of six years is a substantial one; second, that the periods specified in the 1957 Act can be extended in cases of disability, acknowledgment, part payment, fraud and mistake, and that such is a significant encroachment on the certainty of finality otherwise provided for by the Statute; and, third, that the other options available to a defendant who has been sued within the permitted time, for example to have the action dismissed for gross or unreasonable delay, are much less secure and offer far less protection against loss, than does a fixed time limit as found in the Statute.
46. Whilst all of this is of interest as background context to the Statute of Limitations generally, it does not directly advance the point under appeal. However, before turning to the central issue before the Court, could I make one or two observations on the passage from Tuohy summarised at para. 43, supra.
47. That statement by the Court is undoubtedly true if what Finlay C.J. had in mind was that a limitation period is quite unlike, say, the external restriction of the Attorney General’s fiat, condemned in Macauley v. Minister for Posts and Telegraphs  I.R. 345, and as a result, unlike the fiat, it does not constitute a barrier to access at the point of entry. However, there can be no doubting but that access to the courts, an aspect of which is the right to sue, to litigate or to bring proceedings, is an unenumerated personal right guaranteed by Article 40.3.1° of the Constitution (Murphy v. Minister for Justice  I.R. 95): accordingly, such is a fundamental right of every person, citizen or not, within this jurisdiction (Murphy v. Green  2 I.R. 566 at 578). Furthermore, as acknowledged in Byrne v. Ireland  I.R. 289 at 297, it is the primary vehicle by which both personal and all fundamental constitutional rights can be articulated and given effect to. Thus it is the ultimate route to this end. Therefore it must be positioned in its rightful place in our constitutional order. Nothing short of that will suffice.
48. The reason why the courts have shown an obvious reluctance to constitutionally condemn statutes of this type is that their enactment is largely policy-based, with the prescribed periods reflecting a good deal of legislative discretion (see In Re Illegal Immigrants (Trafficking) Bill 1999  2 I.R. 380 at 393). This very point has been expressed in many cases, such as White v. Dublin City Council  1 I.R. 545 at 568, where this Court said that the task of weighing all of the relevant considerations and striking a balance is “quintessentially a matter for the judgment of the legislator.” However, this indulgence cannot be looked upon as open-ended; in fact, it is far removed from that. To give but one example, any restriction on the right to litigate, through which other fundamental rights are ultimately given effect, would not be tolerated if such curtailment was disproportionate or oppressive to the preservation of that right (see Ryan v. Attorney General  IR 294 at 312-313). There are several other examples of situations which would demand a similar response. Due regard to the respective positions of each branch of government is a two-way process, with its practical implementation always seen against one of the most fundamental obligations of the judicial branch, which is to act impartially and independently as the custodian and ultimate enforcer of the entire Constitution on all persons or bodies, public or private, who are subject to it.
49. Finally, I am not at all sure about the validity of the final point mentioned at para. 45, supra. It seems to me that, if anything, the contrary is the true position: defendants have an array of artillery at their disposal capable of terminating an action well short of being disposed by a decision on the merits. These include time limits/equitable delay; cases being struck out as an abuse of process or as being bound to fail; res judicata; security for costs; and the rule in Henderson v. Henderson (1843) 3 Hare 100, to name but some. As can be seen, there are a substantial number of procedural steps available, any one of which can lead to a dismissal of the action. Accordingly, it is somewhat unclear why there was such emphasis on the defendant’s position in the constitutional challenge in Tuohy.
The Lead-In to Hegarty v. O’Loughran
50. In Cartledge v. E Jopling & Sons Ltd  A.C. 758, a personal injuries case, Lord Reid, whilst agreeing with Lord Pearse and commenting on the equivalent provision under UK law to section 11(2) of the 1957 Act, namely, section 2(1) of the Limitation Act 1939, stated at pp. 771-772 that:
“It is now too late for the courts to question or modify the rules that a cause of action accrues as soon as a wrongful act has caused personal injury beyond what can be regarded as negligible, even when that injury is unknown to and cannot be discovered by the sufferer, and that further injury arising from the same act at a later date does not give rise to a further cause of action. It appears to me to be unreasonable and unjustifiable in principle that a cause of action should be held to accrue before it is possible to discover any injury and, therefore, before it is possible to raise any action. If this were a matter governed by the common law I would hold that a cause of action ought not to be held to accrue until either the injured person has discovered the injury or it would be possible for him to discover it if he took such steps as were reasonable in the circumstances. The common law ought never to produce a wholly unreasonable result, nor ought existing authorities to be read so literally as to produce such a result in circumstances never contemplated when they were decided.
But the present question depends on statute, the Limitation Act, 1939, and section 26 of that Act appears to me to make it impossible to reach the result which I have indicated. That section makes special provisions where fraud or mistake is involved: it provides that time shall not begin to run until the fraud has been or could with reasonable diligence have been discovered. Fraud here has been given a wide interpretation, but obviously it could not be extended to cover this case. The necessary implication from that section is that, where fraud or mistake is not involved, time begins to run whether or not the damage could be discovered. So the mischief in the present case can only be prevented by further legislation.”
The provisions of section 26 are similar to those of section 71 of the 1957 Act (fraud) and also section 72 of that Act (mistake).
51. In that case Lord Pearce also, and with similar regret, dismissed the appeal, agreeing that it was a “harsh result”. As a direct consequence of this decision, the law in the UK was subsequently changed within a matter of months to allow for a “discoverability test” in personal injuries cases (section 1 of the Limitation Act 1963), but no such change was made at that time in relation to property damage cases.
52. The common law position ebbed and flowed until 1983 when the House of Lords looked at the issue in Pirelli General Cable Works Ltd. v. Oscar Faber & Partners  2 A.C. 1. There the appellants (the defendants) were engaged by the respondents in or about March, 1969 to advise them in relation to the building of a new services block, which included a chimney about 160 feet high. As part of their retainer they also accepted responsibility for the design of the block. Unfortunately, the concrete used for the inner lining of the chimney was made of a material which was unfit for purpose. Cracks developed and eventually the chimney, which was built during June and July, 1969, had to be partly demolished and replaced. In the resulting proceedings Pirelli sought damages, in negligence, against the consulting engineers for the loss caused. The limitation point was the only issue for determination by the court.
53. The trial judge held that whilst damage, in the form of cracks near the top of the chimney, must have occurred not later than April, 1970, these as a matter of fact were not discovered by the plaintiffs until November, 1977. He found that the defendants had not established that the plaintiffs ought, with reasonable diligence, to have discovered the damage before October, 1972, which was six years before the writ was issued on the 17th October, 1978. The judge went on to hold that the cause of action accrued on the date of discoverability, i.e. the date on which the damage was actually discovered or that on which it ought with reasonable diligence to have been discovered, whichever was earlier. In so doing he followed the test outlined by the Court of Appeal in Sparham-Souter v. Town & Country Developments (Essex) Ltd  2 AER 65. Thus he held that the claim was not statute barred. The Court of Appeal upheld his decision.
54. On appeal to the House of Lords, both parties accepted all findings of fact made by the trial court. The sole issue was a question of law as to the date on which the cause of action accrued. The appellants suggested three possible dates: when the plaintiffs acted in reliance on the defendants’ advice to install the chimney, which was between March and June, 1969; when the chimney was completed in July, 1969; or when cracks occurred in April, 1970. If any of these dates was to find favour with the court, then the action was obviously time barred. The House of Lords, having reviewed the relevant case law, came to the conclusion that “the cause of action accrues only when physical damage occurs to the building” (p. 18), which in this case was in April, 1970, when cracks must have occurred at the top of the chimney. This was before the date of discoverability, as that term was used by the trial judge. Accordingly, Sparham-Souter was wrongly decided, the action was time barred and the appeal was allowed.
55. Lord Fraser, with whom the other Law Lords agreed, acknowledged that the continuing position in all bar personal injuries actions “appears to be unreasonable and contrary to principle”, but believed that “the law is now so firmly established that only Parliament can alter it”. He continued as follows:
“If there is any question of altering this branch of the law, this is, in my opinion, a clear case where any alteration should be made by legislation, and not by judicial decision, because this is, in the words of Lord Simon of Glaisdale in Miliangos v. George Frank (Textiles) Ltd. A.C. 443, 480: ‘a decision which demands a far wider range of review than is available to courts following our traditional and valuable adversary system – the sort of review compassed by an interdepartmental committee.’ I express the hope that Parliament will soon take action to remedy the unsatisfactory state of the law on this subject.” (p. 19 of the report)
56. For Lord Scarman, it was “unjustifiable in principle that a cause of action should be held to accrue before it is possible to discover any injury (or damage).” He continued by stating that “[a] law which produces such a result … is harsh and absurd”. He too advocated a change, but accepted that:
“[T]he reform needed is not the substitution of a new principle or rule of law for an existing one but a detailed set of provisions to replace existing statute law. The true way forward is not by departure from precedent but by amending legislation.” (p. 19 of the Report)
These remarks and those of Lord Fraser very much echoed what the Law Lords had previously said in Cartledge.
57. The law in England has since been amended to include a form of discoverability test in property damage cases arising out of tortious negligence. This change was effected by section 1 of the Latent Damage Act 1986, which inserted a new section 14A into the Limitation Act 1980, which by then had replaced the 1939 Act. Whilst the six-year limitation period continues to run from the date when the damage occurred, the Act also makes provision for a three-year extension. As a result, the position is that an action may not be brought after the expiration of either six years from the date on which the cause of action accrued or three years from “the earliest date on which the plaintiff or any person in whom the cause of action was vested before him first had both the knowledge required for bringing an action for damages in respect of the relevant damage and a right to bring such an action”, whichever is later (section 14A(4) and (5)). Therefore, even if the six-year period has expired before the damage was “discoverable”, a plaintiff will still have a further three-year period, commencing on the date of discovery, within which to sue. Without dwelling too long on the section, it is of interest that “knowledge” in subsection (5) refers, inter alia, to knowledge i) of the material facts about the damage in respect of which damages are claimed; ii) that the damage was attributable in whole or in part to the act or omission which is alleged to constitute negligence; and iii) of the identity of the defendant. As will later become apparent, this is but one formula which has been used to give expression to a “discoverability” test.
Hegarty v. O’Loughran & Edwards  1 I.R. 148
58. Hegarty v. O’Loughran had, and still has, a major influence on which of the options referred to at paragraphs 24 and 25, supra, currently represents the law in this jurisdiction; indeed, even other possibilities not mentioned by this Court in granting leave were considered in that case. Accordingly, it becomes necessary to refer to all three judgments given by the Court. Before so doing, however, the facts should be noted.
59. The plaintiff underwent surgery to her nose in 1973; this was performed by the first defendant. In 1974 she underwent further surgery, this time with Dr. Edwards, in order to remedy the collapse of the septal resection originally carried out. Whilst this second surgery was initially successfully, her condition would later deteriorate, causing her great pain. Findings of fact were made in the High Court to the effect that she must have been dissatisfied with the result of the second operation by the year 1976, although she did not consult her doctor professionally about this matter until 1978, and further that his advice to her was to leave her nose alone. Finally, the court held that she had no reason to seek legal advice at that stage, although she should have done so in 1980. She issued her plenary summons in October, 1982.
60. The subsection directly under consideration in Hegarty v. O’Loughran was the now repealed subsection 11(2)(b) of the 1957 Act, which related solely to personal injuries (para. 39, supra); however, the relevant wording of that subsection, “the date on which the cause of action accrued”, was the same as that in subsection 11(2)(a), which applied to tort actions in general. It is worth recalling the three possible starting points which were canvassed before the Court: the date of the wrongful act; the date when personal injury was manifest; and the date when the personal injury was discoverable with reasonable diligence. These, and the two other possibilities above outlined (paras. 24 and 25, supra), will be discussed in the sequence next appearing. Given this manner of analysis, it will unfortunately be necessary to refer to some of the judgments in Hegarty v. O’Loughran on more than one occasion.
61. At the outset two general points, which are entirely uncontroversial, can be made. The first reflects what Lord Esher M.R. said in Read v. Brown (1888) 22 QBD 128 at p. 131:
“What is the real meaning of the phrase ‘a cause of action arising in the City?’ It has been defined in Cooke v. Gill Law Rep. 8 C.P. 107 to be this: every fact which it would be necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the Court. It does not comprise every piece of evidence which is necessary to prove each fact, but every fact which is necessary to be proved.” (Emphasis added)
That statement, however, was made in the context of discussing the regional jurisdiction conferred on the Mayor’s Court in London: such could only exist if each element necessary to constitute a particular cause of action occurred within the city or the liberties thereof. Contrary to what is suggested in some text books and indeed in some case law, the judgment of Lord Esher M.R., with whom the other judges agreed, did not suggest that the accrual date for limitation purposes is dependent on the plaintiff’s knowledge of each such ingredient, and therefore it is not of much help in determining the date upon which a cause of action accrues.
62. The second point is that in negligence, some actual damage, beyond what can be regarded as negligible, must occur before the tort can be said to be complete. More accurately, without such damage a tortious cause of action does not exist. This is unlike actions “per se”, re-occurring or continuous trespass cases, actions for the recovery of land, claims in respect of trust property, proceedings under the Succession Act 1965, those in admiralty proceedings, and many more. Damage, injury, harm or loss, recognisable as such, is an essential requirement of the cause of action in question in this case.
Points on the Spectrum
63. I will address the possible commencement dates in the following order: first, the date of the wrongful act; then the date of discoverability, followed by the date of actual discovery; and finally the dates of occurrence of damage and of manifestation of damage. The reason for this is that the first three of those options can be disposed of rather expeditiously, whereas the other two potential start dates require rather more analysis.
The Date of the Wrongful Act
64. It becomes immediately apparent from what is stated in para. 62, above, that the occurrence of a wrongful act, even one resulting from an established breach of duty, will not of itself constitute a cause of action. Therefore if the circumstances of any given situation are confined to that framework of fact, there can be no question of such act or omission constituting the start date for limitation purposes.
65. That this is so is quite evident from what Finlay C.J., with whom Walsh, Griffin and Hederman JJ. agreed, said at pp. 153-154 of Hegarty:
“A tort is not completed until such time as damage has been caused by a wrong, a wrong which does not cause damage not being actionable in the context with which we are dealing. It must necessarily follow that a cause of action in tort has not accrued until at least such time as the two necessary component parts of the tort have occurred, namely, the wrong and the damage. The ‘time of the act, neglect or default complained of’ cannot, therefore, be equated with ‘the date on which the cause of action accrued.’” (Emphasis added)
66. Despite a suggestion in the judgment of McCarthy J. that the date of the wrongful act is the relevant one, it seems clear from a reading of his entire judgment that such was not his intention and that he did not favour this option (see paras. 95-99, infra). Indeed from the text of the Statute itself, this could not be the correct test: per section 11(2)(a), time will not run until the date on which the cause of action accrues, and as is clear, without damage resulting from the act complained of, there is no actionable wrong in negligence. Therefore the date of the wrongful act, without damage, is not the accrual date. Consequently, the first option discussed in Hegarty v. O’Loughran cannot be correct: it must therefore be discounted. In fairness to the parties, no contrary reading of the section was advanced in this case.
“Discoverability” – Yes or No?
67. Although ‘discoverability’ is, broadly speaking, a readily understandable concept, precisely what is meant by a discoverability test can vary between statute and the common law. To take but one representative example of common law discoverability, the phrase “date of discoverability” was said by Lord Fraser in Pirelli to mean “the date on which the damage was actually discovered, or the date on which it ought with reasonable diligence to have been discovered, whichever is the earlier” (p. 12). However, the discoverability test as introduced in personal injuries cases by the Statute of Limitations (Amendment) Act 1991 is more prescriptive, with section 3 stating that an action claiming damages for personal injuries caused by negligence “shall not be brought after the expiration of [two] years from the date on which the cause of action accrued or the date of knowledge (if later) of the person injured.” Section 2 of the 1991 Act contains a detailed definition of the term “date of knowledge”, which is said to be the first date on which the plaintiff had knowledge, inter alia, that he had been injured; that the injury in question was significant; that the injury was attributable in whole or in part to the act or omission which is alleged to constitute negligence; and of the identity of the defendant. There is no question of that statute applying to property damage claims. However, the question of whether some manner of discoverability test could be read into the terms of section 11(2) of the 1957 Act has been central to much of the case law in this area.
68. In what was seen at the time as a ground-breaking decision, in Morgan v. Park Developments Limited  I.L.R.M. 156 (“Morgan v. Park Developments”), which was a property damage claim, Carroll J. held that to give section 11(2)(a) of the 1957 Act the same meaning as Cartledge did in respect of its UK equivalent would, as the House of Lords freely acknowledged in that case, give rise to a harsh and unjust rule of law. As a result, the learned judge looked for and identified an alternative interpretation which would not breach one’s constitutional right to sue: in short, she settled on what can be described as a “discoverability” test. This meant that time should not begin to run until the damage was or should with reasonable diligence have been discovered. Accordingly, in her view, this was the proper interpretation of the section.
69. In Hegarty v. O’Loughran, each member of this Court refused to accept that the section could be so read. Finlay C.J., giving the lead judgment, did not consider the provision to be ambiguous; thus, unlike Carroll J., he declined to apply the double construction rule. He noted that no constitutional challenge had been made to its validity and held that his suggested interpretation of the section (the manifest test – see para. 87 et seq., infra) did not render the measure constitutionally flawed. In so doing he relied heavily on section 71 of the 1957 Act (Fraud and Concealment) and, to a lesser extent, on section 48 (Disability – Unsoundness of Mind), saying that both provisions would be redundant if the interpretation favoured by Carroll J. was correct. Although I have never been convinced by this reasoning, which reflects in large measure the views of Lord Reid in Cartledge v. E Jopling & Sons Ltd  A.C. 758, nonetheless the same formed the principle basis of the judge’s decision.
70. In support of this view, the Chief Justice also referred to what Henchy J. had noted in Cahill v. Sutton  I.R. 269 at p. 280, to the amendment introduced in England following Cartledge v. Jopling, and to the recommendation of the Law Reform Commission, all of which suggested that some type of a discoverability test should be introduced: such, in his view, would not have been necessary if the same was reasonably open as the section then read. Griffin J., in agreeing with Finlay C.J., concentrated more in his concurring judgment on what the test should be, rather than focusing on why discoverability should be rejected.
71. The third judgment was that of McCarthy J. who stated at p. 164 of the Report that:
“The fundamental principle is that words in a statute must be given their ordinary meaning and, for myself, I am unable to conclude that a cause of action accrues on the date of discovery of its existence rather than on the date on which, if it had been discovered, proceedings could lawfully have been instituted.” (Emphasis added)
I do not read the emphasised words as any indication of what such a test might look like, if it should otherwise be appropriate.
72. This unanimous rejection by the Court of a discoverability test has been endorsed in many subsequent decisions of the superior courts. Ryan P. in the instant case said at para. 7 of his judgment:
“The parties are not in dispute about some fundamental points. It is agreed that the test is not based on discoverability; that is appropriate to personal injury actions by reason of the amendment of the Statute of Limitations, but it does not arise in regard to property damage of this kind. …”
73. Another example is to be found in Irish Equine Foundation Ltd v. Robinson, where Geoghegan J. in the High Court stated that:
“It is common case that discoverability, as such, cannot be relevant in considering what is the appropriate commencement date in respect of the limitation period. On this point at least, the view of the House of Lords taken in Pirelli v. Oscar Faber & Partners  2 A.C. 1 represents Irish law also. This is quite clear from the decision of the Supreme Court in Hegarty v. O’Loughran, even though that particular case dealt with personal injuries and not damage to a building. The reasoning contained in the several judgments in Hegarty v. O’Loughran and the criticism voiced of the decision of Carroll J. in Morgan v. Park Developments  I.L.R.M. 156 indicate beyond doubt that the Supreme Court rejects the discoverability test no matter what the nature of the damage claimed is.”
74. The above passage was cited with approval by Birmingham J. in Hegarty v. D&S Flanagan Brothers Ballymore Ltd and ors  IEHC 263. In O’Donnell v. Kilsaran Concrete Ltd  1 I.L.R.M. 551 (“O’Donnell v. Kilsaran Concrete”), Herbert J. felt that on the facts of the case it was not necessary “to express an opinion on the vexed question of ‘discoverability’”. However, in Murphy v. McInerney Construction Ltd & Griffin  IEHC 323 (“Murphy v. McInerney Construction”), Dunne J., then in the High Court, contrasted the views of Geoghegan J. with those of Herbert J. and concluded that:
“I have to say that having regard to the various decisions to which reference has already been made, I find it difficult to come to any conclusion other than that the question of a discoverability test simply does not arise. It is quite clear from the authorities referred to above that a discoverability test does not avail a plaintiff when dealing with a plea that a claim is statute barred under Irish law.”
75. It is therefore clear that discoverability is not the test in property damage claims. Indeed the Respondents have not in any meaningful way advocated for such an approach or for any other change to the law, nor do they seek to ask this Court to depart from or distinguish its previous decisions in this area. In fact they go further and insist that they have not made the case at any previous hearing or otherwise that the test should be one based on discoverability. Instead they have concentrated on pursuing the case on very traditional grounds, all within the existing parameters of the law on limitation periods (see also paras. 36 and 86 of this judgment). Quite obviously it is also the Appellants’ position that discoverability cannot be relevant in considering what is the appropriate commencement date. Accordingly, no serious argument was ever taken up on the point.
76. The Respondents do note in passing, in their written submissions, that if this Court wishes to “cure the mischief” which the present test can occasionally produce, the discoverability rule has found favour in other jurisdictions, with the implication being an invitation to the Court to introduce such a rule. It is true that the courts have long bemoaned the harshness of the present state of the law. In Hegarty v. O’Loughran, immediately after the passage quoted at para. 71, supra, McCarthy J. recognised “the unfairness, the harshness, the obscurantism” that underlies the absence of a discoverability rule, but stated that such will remain the case “unless qualified by the legislature or invalidated root and branch by this Court.” In Hegarty v. D&S Flanagan Bros, Birmingham J., in the same vein, said that “the case law in this jurisdiction points to a very clear, albeit very harsh, conclusion.” Many other statements to the same effect can be found elsewhere.
77. One further statement in like manner is worthy of note: it is that of Finlay C.J. in Hegarty where he stated that “to interpret this sub-section as being based on discoverability, though possibly very desirable, would be to legislate” (p. 156). The Chief Justice took the same view in Tuohy, where in his conclusion he said that:
“For the Oireachtas to reach a decision either to add or not to add to the extensions of limitation periods contained in Part III of the Act of 1957 an extension relating to discoverability with regard to this particular time limit imposed by that Act, is a decision which in the view of this Court can be supported by just and reasonable policy decisions and is not accordingly a proper matter for judicial intervention.” (pp. 49-50 of the report)
78. Notwithstanding these views, which for the most part have been forcibly expressed, and despite the passage of considerable time, the position remains, as also acknowledged by Lord Reid in Cartledge, by Lord Fraser and Lord Scarman in Pirelli, and by McCarthy J. in Hegarty (subject to the caveat as noted), that it is for parliament, not the courts, to remedy this unfair position. Such continuing deference at judicial level is perhaps surprising: however, there has been no indication of any movement on the judicial side for the past thirty years, with the remarks of McCarthy J. still being the only reservation of note to date.
79. There are of course some exceptions where statute has intervened. Presently there exists a type of discoverability test in respect of, inter alia, personal injuries (sections 2 and 3 of the Statute of Limitations (Amendment) Act 1991), wrongful death claims (section 6 of the 1991 Act, which applies to actions under section 48 of the Civil Liability Act 1961) and product liability actions (section 7 of the Liability For Defective Products Act 1991). As noted, with regard to personal injuries, the Oireachtas intervened in the form of sections 2 and 3 of the 1991 Act, which introduced a discoverability test by providing that such claims “shall not be brought after the expiration of three years from the date on which the cause of action accrued or the date of knowledge (if later) of the person injured.” That period has since been reduced to two years by section 7 of the Civil Liability and Courts Act 2004, although section 221 of the Legal Services Regulation Act 2015 has again increased it to three years in the case of clinical negligence as defined in Part 2A of the 2004 Act. As noted at para. 67, supra, in the amending Act the “date of knowledge” was defined as the date on which the plaintiff first had knowledge of, inter alia, the following facts: that he had been injured; that the injury was significant; that it was attributable in whole or in part to the act or omission which is alleged to constitute the negligence, nuisance or breach of duty in question; and the identity of the defendant (section 2(1) of the 1991 Act). Although not related to personal injuries, it is of interest to compare that formula with the statutory conditions set out in section 1 of the UK Latent Damage Act 1986 (para. 57, supra).
80. There are of course many other variations, both within statute and case law, of a test which, loosely described, can be said to be one based on “discoverability”. One is when a plaintiff becomes aware – or could have become aware if exercising reasonable diligence – of the existence of (i) a cause of action; (ii) the relevant or material facts relating to that action; and, on rare occasions, (iii) the evidence necessary to support a case if essential matters are put in issue; another formulation is where by the same diligence a plaintiff knows or could have known that the loss sued for has occurred, has been caused by the defendant’s conduct, and that such loss warranted the issue of proceedings. There are multiple other versions, derived from judicial decisions, statutory draftsmen and other sources. Most are subjectively orientated, with some objective elements. The facts of any given case may be so clear that a similar conclusion can be reached via a number of different models (e.g. Bolger v. O’Brien  2 IR 431). In essence, whatever the individual detail might be, such a test depends on the acquisition of knowledge, either directly or constructively, of specified matters and issues. Interestingly, what was proposed in Morgan v. Park Developments was much more benign from the defendant’s perspective than, for example, the statutory criteria now applied in personal injury cases. In any event, this is an aside as the establishment of a discoverability test, in whichever form, is not open to any serious consideration by this Court, certainly on the run of the instant case.
81. In respect of property damage cases, no reform has ever been introduced in this jurisdiction. One might wonder why the Oireachtas has not yet intervened in this area, as the potential effect of being statute barred before even an exacting or an assiduous person could have known of a cause of action is inherently offensive to one’s sense of justice: such is by no means confined to the pre-1991 personal injuries regime. As alluded to above, and as the following will further show, the courts have lamented the unjustness of this situation for many decades now.
82. As far back as 1983, as we have seen, Carroll J. attempted, in Morgan v. Park Developments, to read a discoverability test into the 1957 Act, endorsing the view that to do otherwise would produce a “harsh and absurd” or “unconstitutional and unreasonable” result. McCarthy J. in Hegarty v. O’Loughran and Birmingham J. in Hegarty v. D&S Flanagan Bros also both drew clear attention to the undesirable consequences underlying the present rule. The outcome of Pirelli attracted much criticism, even from the judges who delivered the decision. As a result it was not followed in New Zealand or in Canada. The Law Reform Commission’s 2001 Report on the Statutes of Limitations: Claims in Contract and Tort in Respect of Latent Damage (other than Personal Injury) (LRC 64 – 2001) recommended the introduction of a discoverability test in latent property damage cases; the LRC repeated its call for such a test in its 2011 Report on Limitation of Actions (LRC 104 – 2011). Several others have raised concerns to the same effect. I would add my voice to those who say that the law on limitation periods in latent damage cases urgently needs reform.
83. In light of this, it is, may I respectfully suggest, perplexing why legislative silence, whether due to inertia, indifference or some other undisclosed reason, has persisted for so long, indeed for more than 30 years now after the passing of the Latent Damage Act 1986 in the UK. The voices and concerns of judges seem to matter little. If this should continue, I would see no reason why, in an appropriate case, the type of “root and branch” re-assessment of judicial deference in the face of ongoing legislative inaction, as mentioned by McCarthy J. in Hegarty, should not take place. That is unless, of course, Tuohy is considered the last word on the section.
84. Be that as it may, and notwithstanding these serious concerns, the decision in Hegarty v. O’Loughran has never been resiled from. According to that decision, a discoverability test cannot be read into or deduced from section 11(2) of the 1957 Act, and such conclusion has consistently been applied by the courts ever since. As a result, as matters presently stand, this Court cannot provide for any manner of discoverability test in cases of this nature, even though the introduction of such a test would greatly enhance the clarity of the law and also defeat the harshness and injustice which persist under the current scheme. That, as above stated, is a most regrettable state of affairs.
When damage is “actually discovered” is not the test
85. One of the three questions upon which leave was given asks whether time runs from when damage is discovered, i.e. actually discovered. This option can be disposed of rather quickly. Simply put, the answer is ‘no’. As stated by Birmingham J. in Hegarty v. D&S Flanagan Bros  IEHC 263 (“Hegarty v. D&S Flanagan Bros”), “[t]he time-limit on negligence actions begins to accrue on the date on which damage manifests itself, and not from the date on which the damage is discovered.” This must be correct. The section refers to “the date on which the cause of action accrued”. The cause of action will not accrue, of course, until actionable damage has been caused. No method of statutory interpretation has been referred to by which the quoted words can be construed as meaning “the date on which the damage was discovered”.
86. Indeed I do not understand the Respondents to be arguing for such a commencement date, as they resile even from the less radical (and, from their perspective, less favourable) position based on discoverability, never mind the actual date of discovery itself. As previously adverted to, the Respondents have for the most part been content to argue the appeal by reference to the date when the damage occurred; the most probable reason for this is that they stand over the Court of Appeal’s conclusion that the damage did not occur until December, 2005, and if such be correct they win regardless of which starting point is applied: in so saying I am discounting the date of the wrongful act, which has never seriously been in contention. In any event, as for the accrual date being “when the damage is discovered”, I would not even consider such a possibility in the absence of any argument to that effect from the Respondents, as it would be a radical departure from the existing case law and does not appear to me to be open on the wording of section 11(2)(a) of the 1957 Act. Therefore this option must also be disregarded.
The Proper Test
87. If it can confidently be said that the date from which the limitation period begins to run is not the date of the wrongful act, nor the date on which damage could or ought to have been discovered or the actual discovery date, this then leaves two possibilities from those on which the Court granted leave to appeal. Which, then, is the relevant date: when the damage occurred, or when it was manifest? Again the answer, at least in principle, is to be found in Hegarty v. O’Loughran, but a number of other decisions must be considered and, if necessary, explained and reconciled.
88. That there is, at least in principle, a clear distinction between the date of occurrence of damage and that of manifestation of damage is apparent from a comparison of the judgments in Hegarty v. O’Loughran. Indeed, such is also apparent in the questions posed by this Court in granting leave, which treat the date of occurrence and the date of manifestation as different possibilities for limitation purposes. This is certainly an implicit recognition of a difference between the two. What, then, is meant by damage being “manifest”? Before addressing that important question, it is necessary to chart our way through what case law there exists in this regard.
89. By reference to Finlay C.J.’s mention of “provable” personal injury at p. 157 of Hegarty v. O’Loughran, and also to the judgment of Griffin J. in the same case, where at p. 158 he referred to a plaintiff being in a position “to establish by evidence that damage has been caused to him”, I take “manifest” to mean that the damage must have been capable of being discovered and capable of being proved by a plaintiff. Such should not be taken as deferring the start date until the plaintiff is possessed of evidence sufficient to sustain the action. The manifest test must of course be considered in the context of the distinction between latent defects in a building and the damage caused thereby, a topic discussed at paragraphs 111-137 of this judgment. As will become apparent, it is not the defect which needs to be capable of discovery: it is the subsequent physical damage caused by that defect. I believe that this interpretation is consistent with the wording of the section in question. It is important to be clear that whilst the “discoverability” test above discussed imports an element of reasonableness to the plaintiff’s ability to discover the injury, such is absent in the case of a “manifest” test and this is one of the facts which differentiates the two: a manifest injury or manifest damage need only be capable of being discovered, meaning that it must be provable.
90. In Hegarty, Finlay C.J., set out what he believed to be the true meaning of the section at p. 157 of the report, where he stated that:
“I would, therefore, conclude that the proper construction of this sub-section is that contended for on behalf of the defendants and that it is that the time limit commenced to run at the time when a provable personal injury, capable of attracting compensation, occurred to the plaintiff which was the completion of the tort alleged to be committed against her.” (Emphasis added)
In passing it may be observed that this formula has a similar ring to what Lord Esher M.R. said in Read v. Brown, although, as pointed out at para. 61, supra, that case is far distant from Hegarty in terms of the issues.
91. This statement by the Chief Justice can better be understood when the submission he referred to is quoted; it reads:
“The defendants submit that applying the reasoning contained in [Read v. Brown] … the essential facts which a plaintiff would have to prove in order to succeed in obtaining judgment would be, firstly, the wrong, and secondly, the existence of a personal injury caused by that wrong. The contention [of the defendants] is that as soon as there has occurred to the plaintiff in such an action a manifestation of personal injury which was caused by a wrong previously committed, a cause of action has come into being. That, it is said, is the time when the cause of action has accrued.” (p. 154)
For present purposes the critical phrase is the ‘manifestation of injury’. Thus although, as has been noted by commentators, the Chief Justice did not himself expressly label his approach as a ‘manifest’ test, he did in fact endorse the defendants’ submission to that effect.
92. Griffin J. in his judgment held as follows:
“The period of limitation therefore begins to run from the date on which the cause of action accrued, i.e. when a complete and available cause of action first comes into existence. When a wrongful act is actionable per se without proof of damage, as in, for example, libel, assault, or trespass to land or goods, the statute runs from the time at which the act was committed. However, 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 that damage happens or occurs. In personal injury cases the time at which the wrongful act is committed and the time at which the damage occurs will very frequently coincide. … There have, however, been many cases in which persons involved in violent accidents have escaped apparently unscathed, or at worst with only such trivial injuries as would not warrant an award of compensation. Nevertheless several months, or even years, later such persons have become gravely ill from a condition which was attributable to the particular accident. … In cases such as these, if time were to run from the date of the occurrence of the wrongful act, the period of limitation of three years might very well expire before there is any manifestation of the damage suffered in consequence of the wrongful act. However, in s. 11, sub-s. 2 (b) of the Act of 1957, time is not expressed to run from the date of the occurrence of the wrongful act and should not in my view be interpreted as if it was. The relevant date under the subsection is the date on which the cause of action accrues. Until and unless the plaintiff is in a position to establish by evidence that damage has been caused to him, his cause of action is not complete and the period of limitation fixed by that sub-section does not commence to run.” (p. 158 of the report) (Emphasis added)
93. If this passage constituted the ratio of the judgment of the learned judge, it must be acknowledged that the end point would be shaded in uncertainty. There is a reference to when “damage happens or occurs”, as well as to the plaintiff being in a position “to establish by evidence that damage has been caused”. Those first remarks might point to a date when the damage was caused, with the latter going so far as to suggest that no cause of action accrues until evidence to prove the damage has become known. If these observations remained in isolation, it would be very difficult to extract a test with any precedential value.
94. However, there is also a reference in that passage to the “manifestation of the damage suffered”, which must be read in conjunction with the significant statement by the learned judge that he entirely agreed with the Chief Justice that “time does not begin to run until a provable personal injury capable of attracting compensation, occurred to the plaintiff”. It seems clear, therefore, from his overall judgment, that for Griffin J. the correct test was that time would start to run once the damage was manifest, rather than from any other date or event. It is equally evident that he saw no distinction whatsoever between his proposal and the formula suggested by the Chief Justice. As the trial judge in Hegarty had found that the plaintiff was dissatisfied with the corrective surgery performed by the second defendant by the year 1976, and did not commence proceedings until 1982, her claims against that defendant (and quite evidently against the first defendant) were clearly statute-barred. What manifestation of damage or “manifest” means is a question I will come back to later in this judgment.
95. However, this approach was not followed in the judgment of McCarthy J. At first glance it appears that he may have favoured an interpretation based on the date of occurrence of the wrongful act (see para. 66, supra). At p. 159 of the report he stated that:
“I share the view of the learned trial judge (Barron J.) that the date on which the cause of action accrued was, in respect of the claim against each of the defendants, the date upon which, in each case, the act causing the damage was committed.”
96. In fairness to McCarthy J., however, this sentence may not reflect his true position, as a reading of the rest of his judgment suggests that he saw the real starting point as the date on which the damage occurred, rather than when the harmful act was committed. Subsequent to the passage last quoted, he did acknowledge that the cause of action does not accrue until some damage occurs and later, when summarising his position, he went on to say that:
“I am unable to conclude that a cause of action accrues on the date of discovery of its existence rather than on the date on which, if it had been discovered, proceedings could lawfully have been instituted.” (p.164)
This certainly reflects the need for damage to have been caused. Furthermore, it is highly unlikely that the learned judge, given his outstanding knowledge and understanding of the law, intended to pitch the starting point before the accrual of the cause of action. Moreover, such would represent a view discounted by a great number of imminent legal minds. May I respectfully suggest that the views of the Court on the “date of the wrongful act” most probably also reflected the position of McCarthy J. Those views, it will be recalled, appear in the quotation cited above (para. 65, supra), where the Chief Justice stated that “the ‘time of the act, neglect or default complained of’ cannot…be equated with ‘the date on which the cause of action accrued’.” As the other members of the Court agreed with his judgment, I take Hegarty as having conclusively established that the date of occurrence of the wrongful act is not the relevant one for limitation purposes.
97. The true position of McCarthy J. becomes even clearer when the following is considered. In Hegarty, the defendants had conceded that a cause of action came into being upon a manifestation of personal injury which was caused by a previously committed wrong; they were satisfied to do so because even on such basis they could still succeed on the limitation plea. However, McCarthy J. was not willing to accept this concession as he did not feel that it was the correct construction of the Statute; he preferred what he saw as the stricter interpretation laid down in Cartledge, i.e. one based on the date of occurrence of damage. At p. 160 he stated:
“The argument for the defendants concedes a somewhat broader interpretation, as detailed in the judgment of the Chief Justice: that as soon as there has occurred to the plaintiff in such an action a manifestation of personal injury which was caused by a wrong previously committed that a cause of action has come into being. It would be sufficient to determine this appeal in the defendants' favour if the sub-section were to be so construed, without the stricter interpretation upheld in Cartledge v. Jopling. Ordinarily, one might be content to accept a defendant’s concession for the purpose of determining an appeal, but where this involves the construction of a statute which must affect the fortunes of many others, such a concession should not be accepted unless one is satisfied that it is correct. I am not so satisfied.”
The learned judge would therefore have picked the date of occurrence of damage as the pivotal date, there being no necessity to await any manifestation of such damage.
98. One further observation should be made: it seems, from his judgment as a whole, that there is a possibility that McCarthy J. may possibly have been conflating the concepts of ‘discoverability’ and ‘manifestation of damage’, although on this it is impossible to be sure. What is clear beyond doubt, however, is that he saw a definitive distinction between the “occurrence” and “manifestation” of damage. Such is inferred from the passage last quoted; it is expressly so stated in the extract next appearing :
“Some wrongs, such as assault or libel, of themselves constitute the cause of action and, consequently, the cause of action accrues from the moment of the commission of the wrong. Others are actionable only on proof of damage, in which case the cause of action does not accrue until some damage actually occurs. But the occurrence of damage and the manifestation of damage do not, necessarily, coincide. This is such a case. There must be many others in the whole area of personal injuries or, more especially, where such injuries result from medical treatment.” (p. 160 of the report) (Emphasis added)
99. In summary, it seems clear that in endorsing Cartledge as he did, McCarthy J. was evidently of the view that the date of occurrence was the start point. It is equally apparent that the learned judge saw a distinction between that date, and the date of the manifestation of damage. This distinction, fine though it may be, appears to have perhaps been lost, overlooked or even misunderstood in some of the subsequent judgments given in this jurisdiction. This is an important matter and one to which I will return in due course.
100. One final point: one might think that any doubt as to the test favoured by the majority would be dispelled by seeing how the limitation provision was applied in Hegarty itself. Unfortunately, the result of that search remains far from clear.
101. At the outset it should be pointed out that on any of the bases canvassed, by 1974, when the second operation was carried out, the plaintiff had actual knowledge of the first surgeon’s failure; otherwise remedial steps would not have been required. With regard to Dr. Edwards, in his conclusion Finlay C.J. expressly noted the finding of fact made in the High Court to the effect that the plaintiff was dissatisfied with the operation by the year 1976. The Law Reform Commission (LRC 64 – 2001 at para. 1.03) and the authors McMahon and Binchy (Law of Torts, Fourth Ed., 2013 at para. 46.21) both interpret this to mean that the clock did not start to run until 1976, which certainly reflects a test based on a manifestation of the injury, rather than its occurrence (which on the facts, would have been in 1974). However, in the penultimate sentence of his judgment, the Chief Justice stated that “[t]he proceedings were not commenced until 1982, and that would appear to be upwards of five to six years after the time limit had expired” (emphasis added). Working backwards, this suggests that time expired in either 1977 or 1976; that means it would have started to run a further three years before that, so in 1974 or 1973. This, then, seems to be an application of a test based on the date of the wrongful act, i.e. the clock ran from the time of the surgeries. However, it is almost impossible to accept that this could have been his true intention, as he went to great lengths to eliminate that as a possible start point. It is also entirely inconsistent with the final paragraph of the judgment of Griffin J., which strongly suggests that, for him, time ran from 1976. It is, in the circumstances, highly regrettable that this is not also definitive from the judgment of Finlay C.J.
102. As the discussion in the preceding paragraphs indicates, I have taken the view that Griffin J. favoured a ‘manifestation of damage’ test, as did Finlay C.J., although it must be acknowledged that such is not at first immediately evident from the judgment of the Chief Justice. His reference to a “provable” personal injury, however, and his approval of the defendant’s contention that a cause of action accrues only when there is a manifestation of personal injury would suggest that the Chief Justice in fact favoured a “manifest damage” test over one based on any alternative start date. It therefore seems to me that although Hegarty did not perhaps definitively settle the point beyond debate, in my view the better reading of the case is that the majority of the Court saw the date of manifestation as being the relevant date for limitation purposes. The questions then arise (i) whether any of the subsequent case law has shed any light on, or perhaps even altered, this interpretation, (ii) whether the same is also applicable in property damage claims and (iii) if it is, what in fact does it mean?.
103. The view which I have just expressed was also the reading of Hegarty taken by Geoghegan J. in Irish Equine Foundation Limited v. Robinson  2 IR 442 (“Irish Equine”). In a passage at pp. 447-448 of the report, the learned judge stated that:
“I think, therefore, that Hegarty v. O’Loughran must be taken as authority for the view that prior to the Act of 1991, the cause of action for personal injury did not arise until the injury was manifest but it did then arise irrespective of whether it ever occurred to the party injured or could ever have reasonably occurred to the party injured that it resulted from the negligence of somebody else. Personal injury cases, of course, are now governed by the Act of 1991 and the views of the Supreme Court in Hegarty v. O’Loughran are only relevant in so far as they can and should be adapted to actions for property damage.
In my view, it is at least arguable that the nature of personal injury damage is so different from the nature of damage resulting from defects in a building that the concept of an injury becoming manifest as being relevant to the commencement of the limitation period may only be applicable to personal injury cases but I accept that the opposite can also be argued. I find it quite unnecessary to decide this point and that being so, I do not think that I should decide it.”
104. The first paragraph of those quoted seems to me to represent a correct analysis of the decision in Hegarty insofar as it applies to personal injuries, although it must be said that the reference by the learned trial judge to “… the negligence of somebody else” never featured in that case, unless of course he was simply referring to the wrongful act or omission complained of. Whatever about that point, however, I do not share the sentiment voiced in the second paragraph, which was purely obiter in any event. Although accepting that there may be some difference in nature between personal injuries and property damage, I am not convinced that any such difference would warrant a separate or discrete test in respect of those two classes of action. The potential injustice of the section applies no less when the damage is property-related; accordingly, if a start date based on ‘manifestation’ is appropriate in one case, I do not see why it should not equally be appropriate in the other. McCarthy J. seemed to be of a similar view in Hegarty v. O’Loughran, citing with apparent approval at p. 161 the finding in Pirelli that “the alleged distinction to be drawn between damage to property and personal injuries was … unfounded.” I will later return to Irish Equine in the context of the central issue of whether defective foundations can be said to constitute damage for the purposes of the law of negligence. That case, however, is not the only one to raise the matter of whether Hegarty can be transposed to property damage and pure economic loss cases. It is therefore necessary to examine the subsequent cases.
105. Two High Court judgments which lend some support to an affirmative answer to that question are those of Herbert J. in O’Donnell v. Kilsaran Concrete and that of Birmingham J. in Hegarty v. D&S Flanagan Bros, both of which have previously been referred to. In the former, Herbert J. endorsed Irish Equine on that point and applied it to the facts of the case before him, which was a claim for property damage. He concluded on the evidence that “the damage only came into existence not long prior to October 1998 or in the terminology used by Geoghegan J was not manifest until then.” On the one hand this seems to support the need for damage to be manifest; on another reading, however, it merely conflates the date of manifestation with that of occurrence. There is also a third possibility, of course, namely, that the occurrence and manifestation of the damage happened at the same time. In Hegarty v. D&S Flanagan Bros, Birmingham J. said that the “time-limit on negligence actions begins to accrue on the date on which damage manifests itself, and not from the date on which the damage is discovered.” At face value this correctly distinguishes between two points on the spectrum of options and, if intended as such, it cannot be questioned. However, Birmingham J. quoted the judgment of McCarthy J. in Hegarty v. O’Loughran in support of this contention, whereas it is clear that for McCarthy J. it was the date of the occurrence, rather than the date of manifestation, which was the critical one. Therefore one cannot be certain whether Birmingham J. truly intended to suggest that the date of manifestation is different to the date of occurrence.
106. Less encouraging for the Plaintiffs/Respondents is the judgment of Dunne J. in Murphy v. McInerney Construction. There the learned judge considered a submission that “the cause of action was not complete until such time as it was clear that the cracks in the property were structural.” She had regard to the particulars raised in that case and the replies thereto, and concluded as follows:
“Having regard to the pleadings in this case and the facts agreed before me I cannot come to the conclusion that the cause of action against the first and second named defendants accrued within the six years prior to the issue of these proceedings. There is nothing whatsoever to suggest that the damage complained of occurred within that time-frame. What is contended is that ‘the latent defects became manifest’ within the time frame. That is nothing short of a discoverability test.”
Thus Dunne J. appears to have been far less embracing of any possible distinction between manifestation and occurrence. Moreover, it seems to be suggested that requiring that damage be “manifest” would be very close to, if not even identical to, a discoverability test. However, it must be acknowledged, in fairness to the learned trial judge, that the facts of the case before her made it very difficult to articulate a clear-cut distinction between these three concepts.
107. There is one other case which must be noted, namely, Gallagher v. ACC Bank  2 I.R. 620. There, the defendant bank advertised and marketed a financial product called a “Solid World Bond 4”, which the plaintiff agreed to purchase. For this purpose he also availed of a loan of €500,000 from the Bank, which it was offering to prospective investors as part of the package. His complaint was that he was induced to acquire this product, which was totally unsuitable for him as it would have had to far out-perform the market if he was to get any return above the interest which had accrued on the associated borrowings. The live issue turned on when the cause of action accrued for the purposes of the negligence claim against the defendant.
108. Having conducted a wide ranging and extensive survey of the cases, essentially from the UK and Australia, Fennelly J. returned to the authorities in this jurisdiction, aided by the judgment of Brennan J. in Wardley Australia Ltd v. Western Australia  175 C.L.R. 514 for the answer. The conclusion of the learned judge, with whom all of the members of the Court agreed, can be summarised as follows:
Given the express recognition that the case was decided by reference to the specific nature of the plaintiff’s pleadings, it can fairly be said that at the level of principle it offers little assistance to the point directly under consideration on this appeal.
(i) Lord Esher was correct in Read v. Brown: every fact necessary to support judgment must exist before a cause of action can be said to arise. Accordingly, the commission of a wrongful act, of itself, is not sufficient – actual damage is necessary.
(ii) Mere possibility of loss will not be suffice: some level of probability will be necessary in most situations, with the exception of cases like Philip v. Ryan  4 IR 241. To hold otherwise would be unfair to a plaintiff who, if he moves too early, may not be able to prove damages; on the other hand, if he waits until his loss fully materialises, he may be statute barred.
(iii) Where the transaction involves benefits and burdens, damage will only arise if, on an evaluation, an adverse balance is struck; put another way, damages may be caused at the time of the wrongful act or that act may simply initiate a course of action that will result in loss at some later date.
(iv) For present purposes, it is relevant that at paragraph 117 the learned judge identified three possible start points for the limitation period: “firstly, it could accrue when the plaintiff entered the transaction by borrowing the money and purchasing the bond; secondly, it might accrue at some intermediate date when the plaintiff could prove that he was at a loss in terms of a calculation of his liability for interest against movements in the value of the shares; thirdly, it could accrue at the end of the period of the investment.”
(v) Of these, Fennelly J. was firmly of the view, expressed in paragraph 118, that the date first mentioned must be the correct one: “It is to my mind inescapable that the plaintiff's claim as pleaded is that he suffered damage by the very fact of entering the transaction and purchasing the bond. The cause of action then accrued. That was also the date when he entered into a contractual relationship with the defendant.”
(vi) Finally, the learned judge concluded at paragraph 121 that the case, “on its own particular pleaded facts”, was a clear one: the cause of action accrued when the plaintiff purchased the bond, more than six years before he commenced proceedings, and thus the claim was statute barred.
109. What the above case law establishes beyond doubt is that the date of the wrongful act, the date on which the damage was discoverable or ought reasonably to have been discovered, and the date of actual discovery are not the start date for limitation purposes. The general consensus would appear to be that Hegarty v. O’Loughran decided, in personal injuries claims at least, that the date of manifestation of damage is the critical one. However, there has been a looseness of language in some of the subsequent judgments which has seen that date conflated with the date of occurrence of damage, on the one hand, and sometimes even with the date of discoverability, on the other. This is of course explicable by the fact that in some cases the date of occurrence and of manifestation may be the same; in others the date of manifestation and of discoverability may be the same; indeed, sometimes all three may overlap and present on the same date. However, if one is to consider the dates of occurrence, manifestation and discoverability as three distinct concepts, which is how they were treated in Hegarty v. O’Loughran and is how I believe they ought to be treated, then a clear answer to the questions posed on this appeal may be given.
110. In my view, time begins to run from the date of manifestation of damage, which means it runs from the time that the damage was capable of being discovered and capable of being proved by the plaintiff. This was the conclusion reached in respect of personal injuries claims in Hegarty v. O’Loughran. The case law since then is ambiguous as to whether such a commencement date should or indeed has been transposed to property damage claims. However, for the reasons articulated up to this point of the judgment, I am satisfied that the date of manifestation of damage is also the appropriate start point in property damage claims, and the 1957 Act should be construed accordingly.
Real issue on the appeal: what constitutes actionable ‘damage’ for the purposes of the law of negligence?
111. Leaving aside for a moment the wording of the questions certified by this Court, in one sense the resolution of the precise point from which time runs for limitation purposes is not really necessary for this appeal. The reason is this: the above-cited case law puts it beyond doubt that time will not begin to run until the cause of action accrues; equally, it is unquestionable that a cause of action in negligence is not complete until actionable damage has occurred. It is quite clear that Ryan P. in the Court of Appeal decided the case on the basis that “damage” to the houses first occurred in December, 2005 (para. 22, supra). This was the critical issue from that court’s point of view. Questions of the damage being manifest, or discoverable, or even discovered, simply did not arise; even on the test which takes the date upon which the damage occurred as its starting point, the Court of Appeal was still satisfied that Mr Brandley was within time. In essence, given the timeline involved, the damage actually happened less than six years before the institution of proceedings.
112. In order to arrive at this conclusion, the learned President drew a distinction between the initially defective foundations, which in his view did not constitute actionable damage, and the subsequent cracks appearing in the walls, which did. The Appellants have submitted that there is no logical or rational basis to treat the defective foundations as anything other than damage capable of sustaining a cause of action, and that by doing otherwise the Court of Appeal in substance applied a test of discoverability. Accordingly, it is necessary to further explore this central question of whether the laying of defective foundations in March, 2004 constituted actionable damage and whether that damage would have been manifest at that time, for if it was, and in the absence of a test based on discoverability, the Appellants must surely prevail.
113. In principle, at several different levels and for several different purposes, a distinction clearly exists between defect and damage. This distinction between defect and damage has also been clearly established in the case law. Griffin J. in Hegarty v. O’Loughan makes this perfectly clear and supports his view with concrete illustrations, as does President Ryan in the instant case. In addition, though it was not cited by the court below, Pirelli, the facts of which have been recited above (paras. 52 and 53, supra), is also a strong authority on this point. It will be recalled that the wrong material was used for the inner lining of a pre-cast concrete chimney. In his speech, Lord Fraser addressed this issue as follows:
“[T]here 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.” (p. 16 of the report) (Emphasis in original)
114. The learned Law Lord went on to refer to the “exceptional” cases in which “the defect is so gross that the building is doomed from the start”, noting that in such cases the owner’s cause of action would accrue as soon as the building is built. He elaborated somewhat on this later at pp. 18-19 of the report:
“It seems to me that, except perhaps where the advice of an architect or consulting engineer leads to the erection of a building which is so defective as to be doomed from the start, the cause of action accrues only when physical damage occurs to the building. In the present case that was April 1970 when, as found by the judge, cracks must have occurred at the top of the chimney, even though that was before the date of discoverability.”
Incidentally, virtually all of the later cases on this topic have distanced themselves from the “doomed from the start” exception, which has never gained any sort of traction and which has in effect been obsolete for very many years.
115. This distinction between ‘defect’ and ‘damage’ is again evident in the judgment of Ralph Gibson L.J. in London Congressional Union Incorporated v. Harriss and Anor  1 All E.R. 15 (Court of Appeal) (“London Congressional Union”), where it was stated that:
“I am unable to find that the defect in design can or should be treated as physical damage to the building. … The defect in design in this case was, in my judgment, as latent, and as distinct from subsequent physical damage caused by it, as was the negligent incorporation of unsuitable material in Pirelli’s chimney.”
A similar point was made by Lord Keith of Kinkel in Ketteman v. Hansel Properties Limited  A.C. 189 (“Ketteman v. Hansel”). These cases are discussed in more detail below.
116. If all of this seems to supports the Respondents’ case, it must be said that there is authority from this jurisdiction which would certainly seem to favour the Appellants, that is, the judgment of Geoghegan J. in Irish Equine. There the defendants had been retained in December, 1979 to act as architects to design and supervise the construction of the Irish Equine Centre in Co. Kildare. A certificate of practical completion in respect of the centre was issued in March, 1986, with the final certificate issuing on the 18th November, 1987. There was an ingress of water through the ceiling of the centre in late 1991; proceedings issued on the 4th January, 1996. The question of whether the action, founded on negligence, was statute barred was tried as a preliminary issue. The plaintiff contended that there was no damage, or at least that no damage manifested itself, until the ingress of water in late 1991. If that proposition had been accepted, then naturally the proceedings would have been within time.
117. Geoghegan J. did not believe that English cases such as Pirelli afforded any real support to the plaintiff’s case, although in his view the judgments of Finlay C.J. and particularly Griffin J. in Hegarty did bolster their argument to some extent. As above noted, on his analysis of that case, Geoghegan J. was satisfied that that case had to be taken as authority for the proposition that, prior to the Act of 1991, “a cause of action for personal injury did not arise until the injury was manifest but it did then arise irrespective of whether it ever occurred to the party injured or could ever have reasonably occurred to the party injured that it resulted from the negligence of somebody else” (p. 447 of the report). Having made this point and having expressly reserved his view on whether a manifest test applied to property claims, the learned judge then went on to dispose of the case before him as follows:
“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. I agree with the submission in this regard made by counsel for [the defendants], that if experts with the same qualifications as these defendants had been retained just after the roof was constructed to inspect and report and, assuming that the plaintiff’s allegations are correct, they could and would have reported that the roof was defectively designed. I am satisfied, therefore, that in so far as this action is founded on negligence in the design of the roof, it is clearly statute barred.” (p. 448 of the report)
118. The kernel of the Appellants’ case on this appeal is similar: that it would have been manifest to any expert who examined the foundations any time after they were put in that they were defective. The Respondents, however, suggest that Irish Equine did not deal with the distinction between a defect and damage, and support this argument by pointing to the Law Reform Commission’s Report on the Statute of Limitations: Claims in Contract and Tort in Respect of Latent Damage (other than Personal Injury) (LRC 64 – 2001). There Irish Equine is said to illustrate “the hardship caused to a plaintiff by allowing the cause of action to accrue when … economic loss occurs” (para 6.31). The LRC analysed the case as follows:
“The plaintiff had a cause of action in tort arising in 1986 or 1987 for the economic loss suffered in making good the defects in the defectively designed roof. At this point, (or perhaps earlier, at the date the negligent design plan was made) the cause of action was complete, and the subsequent physical damage was immaterial to the date of accrual of the cause of action. This was the outcome of Geoghegan J’s analysis of the facts. However, it is unclear whether the learned judge mistakenly applied the rule in Pirelli to the defect itself, as opposed to the actual physical damage, or whether Geoghegan J was in fact applying the exception to the rule in Pirelli, known as the ‘doomed from the start’ exception … to arrive at this result. Had the learned Judge correctly applied the rule in Pirelli the limitation period would not start to run until 1991 when physical damage occurred.” (para. 6.32)
119. It is clear that Geoghegan J. considered the primary claim to be for “the alleged cost of removing existing slating, retaining existing roof structure and sheeting with metal decking with counter batons and slating over”. He expressly approached the case as being based on a claim for pure economic loss; see, for example, p. 448, where he stated that “[f]or all practicable purposes, this is a claim for what is known in the English authorities as ‘pure economic loss’” and p. 448-449, where he said that “there is no doubt that the statement of claim is alleging a cause of action in the form of a breach of a duty of care not to cause pure economic loss.” This perhaps makes it easier to understand why the learned judge seems to have conflated defect with damage: in a pure economic loss case, the defect was the damage ab initio. It was for this reason that he stated at p. 449 that “the economic loss arose immediately the defectively designed roof was constructed and possibly even at an earlier stage”. However, by reference to UK case law, Geoghegan J. did acknowledge that “damage which was likely to cause danger in the future might also be sufficient to ground a cause of action but it would still have to be physical damage.” Thus it followed that “it would only be in the rarest of cases that the cause of action would commence upon the construction of the building.” The judge continued by differentiating the case before him:
“But, if as is pleaded in this statement of claim, damages can be recoverable in negligence quite apart from contract for the pure economic loss involved in making good defective design of workmanship, then quite clearly the loss arises from the beginning.”
120. In so holding, it seems to me that the learned judge was drawing a distinction between the time when the clock might start to run in pure economic loss cases, on the one hand, and in property damage claims, on the other. As Irish Equine fit into the former category, the time started to run earlier, i.e., from the time of the construction of the roof, rather than when the damage manifested in the form of the ingress of water. This would account for his application of the “manifest” test to the defective design rather than the subsequent damage, as on the pleadings before him the defect was the damage, and hence the occurrence and manifestation of damage were both in 1987.
121. Such an approach was espoused in Ketteman v. Hansel, but did not commend itself to the House of Lords; for example, Lord Brandon of Oakbrook, though dissenting on other grounds, stated as follows:
“The argument of counsel, as I understand it, proceeded as follows. Where a house was built on defective foundations, a buyer of it might suffer two kinds of damage. The first kind of damage was physical, in the form of consequential structural failure or damage. The second kind of damage was economic loss, in the form of diminution in market value. In the case of the first kind of damage, the buyer’s cause of action against any party for negligence in respect of the defective foundations accrued when the consequential structural failure or damage occurred. But, in the case of the second kind of damage, the diminution of market value was present from the time of the original construction, and it was at that earlier time that the buyer’s cause of action in respect of such diminution accrued. The plaintiffs in the present case had sued for the second kind of damage, namely, diminution of market value. Their causes of action had, therefore, accrued at the date when the houses were built.
In my opinion this contention cannot be supported. I do not know what special cases Lord Fraser of Tullybelton had in mind when he referred in his speech in the Pirelli case to buildings ‘doomed from the start.’ It may be that he was only keeping open the possibility of the existence of such special cases out of major caution. Be that as it may, however, I am quite sure that he was not seeking to differentiate between causes of action in respect of making good defects or damage on the one hand, and causes of action in respect of diminution in market value on the other. In any case, on the facts of the present case it seems that the plaintiffs, in re-selling their houses at a loss, were acting reasonably in mitigation of their damage, so that the distinction between the two kinds of damage relied on is one of form rather than substance.”
Lord Brandon was satisfied that the cause of action accrued on the date on which the consequential structural damage to the house first came into existence.
122. Whether Geoghegan J. intended to endorse the approach which previously had been rejected by Lord Brandon is uncertain; in any event his comments to that effect were obiter, as Irish Equine was in substance decided on the basis that damage was manifest from 1987 or earlier.
123. The judgment of Geoghegan J. in Irish Equine can be explained on a numbered of bases. He expressly decided that case on its pleadings, where the central claim was for pure economic loss. It is also possible, as has been above stated, that he misapplied the test in Pirelli to the defect, or that he was in fact applying the “doomed from the start” exception from that case. Whichever be the case, it is clear in any event that the learned judge was not addressed on, and the judgment does not deal with, the distinction between ‘defect’ and ‘damage’ which is central to the within appeal. Accordingly, I take the view that the already cited UK authorities are of more direct relevance on this point.
124. The facts and decision in Pirelli have been above described (paras. 52-56, supra). That case was later applied by the Court of Appeal in London Congressional Union. There the trial judge awarded the plaintiffs damages for negligence in the design of the surface water drains and damp-proofing of a new church and hall which were completed and handed over in January, 1970. The surface water drains functioned properly for about 20 months. “Disaster occurred” following heavy rains on the 3rd August, 1971, as the sewer filled with water, which came up through the pipes and flowed into the hall, causing damage to the floors and plaster. By mid-1975 the hall had flooded in this fashion on some eleven occasions – in one such incident, the hall flooded to a depth of two feet. A writ was issued on the 18th February, 1977; thus the relevant date for deciding whether or not the claims were barred was the 18th February, 1971. The sole question for the Court of Appeal was whether the plaintiffs’ action was barred by the Limitation Act 1939. If the cause of action in respect of the defectively designed drains accrued on handing over the building in January, 1970, the plaintiffs were out of time; conversely, if the cause of action did not accrue until physical damage was caused to the building by the defective design in August, 1971, the claim was not statute barred.
125. Ralph Gibson L.J., in analysing the decision in Pirelli, stated in relation to the speech of Lord Fraser that:
“[T]here was in my judgment a decision that in law a defect such as in foundations resulting from negligent advice or design is distinct from the damage which it later causes to the building and, save in a class of exceptional cases which must be considered later in this judgment, the cause of action does not arise until the damage occurs. There was, moreover, a finding that on the facts of that case, where by negligent design the defendants caused the presence of a defect in the building from which damage to the building later resulted, the cause of action accrued when the damage came into existence and not at any earlier date.
I can see no relevant difference between the relationship of the defendant consulting engineers in Pirelli to their clients, the plaintiffs, and the relationship of the defendant architects in this case to their clients, the United Reform Church of East Finchley. In both cases there was negligent design which was latent in the sense that for a time the building and the various parts of it functioned as those parts were expected and required to function, and which was later the cause of physical damage to the building. I therefore conclude that unless this case can be distinguished on the facts in some way from Pirelli’s case, or unless it falls within an exception from the rule established by that case, the cause of action in respect of the negligent design of the drains must be held to have accrued when the flooding occurred and not before.”
126. Ralph Gibson L.J. went on to refer to an unreported judgment of His Honour Judge Sir William Stabb, Tozer Kemsley & Millbourn (Holdings) Limited v J. Jarvis and Sons Limited and Others (the 5th May, 1983), which concerned the negligent design and installation of a heating and air conditioning plant in an office block. The judge had held on the pleaded allegations that the plant was defectively designed and constructed from the time that it was installed. As reflected in the London CUI judgment, Judge Sir William Stabb went on to say that:
“I think that a defect in the construction of the building, be it as a result of a faulty design or construction of part of that building or its services, means and can only mean that a building in that defective state is a damaged building. It is a damaged article in the sense that it is not a sound one. … [A] building is a manufactured thing, and if it is unsuitable or defective when it is handed over it seems to me that the cause of action arises when the person acquires it in its defective state. It may well be that to quantify the economic loss that flows or will flow from that defective state will be impossible at that time, but that is the time when the cause of action arises.”
127. It is useful to set out at some length the comments of Ralph Gibson L.J. in relation to the passage just quoted, as they go some way to explaining the distinction between a defect, on the one hand, and damage, on the other. He said that:
“The first thing to be noted is that Judge Sir William Stabb was not required in that case to decide whether in law the plaintiff lessees were entitled to recover the alleged or any damages against the defendants, and in particular against the defendant architects or consulting engineers. His decision was that, if causes of action in negligence had accrued, they were statute barred. It is not necessary for this court in this case to decide whether in the circumstances indicated in the Tozer Kemsley case the plaintiffs could have succeeded in negligence against any of the defendants for the loss resulting not from damage caused by the defective operation of the plant, whether to itself or to any other part of the building, but from expense or inconvenience arising from a heating and air conditioning plant which did not work as well as such plant might reasonably be expected to work. Making the assumption that the learned judge made I would accept that on the facts there alleged any cause of action for damage resulting from negligent design of, or supervision of, installation of the plant was rightly treated as arising when the building in that state was handed over to the client. In applying the principle established in Pirelli’s case, as Judge Sir William Stabb sought to do in the Tozer Kemsley case, I see no reason why on the facts of a particular case the defect resulting from negligent design or supervision should not constitute the physical damage to the building provided that the damaging consequences of the defect are immediately effective. In such circumstances there is no need for subsequent or later damage in order to complete the cause of action.
Accepting the principles stated by Judge Sir William Stabb and applying them to the facts of this case, I am unable to find that the defect in design can or should be treated as physical damage to the building. The drains, in the physical condition resulting from the defect in design, were not such as to produce at once their damaging effects. They were capable of functioning properly as drains and they did so for some twenty months. When they failed effectively to function as drains because of heavy rainfall in the area they did not merely function unsatisfactorily, e.g. by making noises or emitting smells, but were the cause of physical damage to other parts of the building. The defect in design in this case was, in my judgment, as latent, and as distinct from subsequent physical damage caused by it, as was the negligent incorporation of unsuitable material in Pirelli’s chimney.” (Emphasis added)
128. Later still, in commenting on proposed legislative changes to the limitation legislation, the learned judge stated that “the law, as I understand it to be, does postpone, in the ordinary case of negligent design and construction of a building, the accrual of the cause of action until the resulting physical damage comes into existence”.
129. The House of Lords reached a similar conclusion in Ketteman v. Hansel the next year. This case concerned defective foundations which later produced physical damage to five houses. The case gave rise to a “surprising mish-mash of legal issues” concerning the joinder of parties, the doctrine of relation back, and the amendment of pleadings. What is of concern for this judgment is Lord Keith of Kinkel’s rejection of the appellants’ “doomed from the start” argument, and his acceptance therein of the distinction between ‘defects’ and ‘damage’. Although Lord Keith found himself in a minority in that case as a result of his disposal of the “amendment” point, all of the members of the majority expressly agreed with him in relation to the “doomed from the start” point. At pp. 205-206, in referring to the appellants’ “doomed from the start” argument, he stated that:
“The appellants’ presentation of this argument involved two aspects. In the first place it was maintained that the houseowners’ respective causes of action accrued, not when the physical damage to their houses occurred, but when they became the owners of houses with defective foundations. It was argued that they then suffered economic loss because the houses were less valuable than they would have been if the foundations had been sound. The proposition that a cause of action in tort accrued out of negligence resulting in pure economic loss was sought to be vouched by reference to Junior Books Ltd. v. Veitchi Co. Ltd.  1 A.C. 520 . That case was also cited in Pirelli in support of the argument that, since in that case there was economic loss when the chimney was built, the cause of action arose then. The argument was clearly rejected in the speech of Lord Fraser of Tullybelton concurred in by all the others of their Lordships who participated in the decision. At p. 16, he expressed the opinion that a latent defect in a building does not give rise to a cause of action until damage occurs. In the present case there can be no doubt that the defects in the houses were latent. No one knew of their existence until damage occurred in the summer of 1976. This branch of the argument for the architects is, in my opinion, inconsistent with the decision in the Pirelli case, and must be rejected.
In the second branch of the argument it was maintained that a distinction fell to be drawn between the case where the defect in a building was such that damage must inevitably eventuate at some time and the case of a defect such that damage might or might not eventuate. The former case was that of a building ‘doomed from the start’ such as was in the contemplation of Lord Fraser of Tullybelton when he made reference to that concept in his dicta in the Pirelli case, at p. 16. In the present case the houses were doomed from the start because the event showed that damage was bound to occur eventually. My Lords, whatever Lord Fraser may have had in mind in uttering the dicta in question, it cannot, in my opinion, have been a building with a latent defect which must inevitably result in damage at some stage. That is precisely the kind of building that the Pirelli case was concerned with, and in relation to which it was held that the cause of action accrued when the damage occurred. This case is indistinguishable from the Pirelli case and must be decided similarly. The second branch of the architects’ argument fails. I understand that all your Lordships agree.”
Lord Brandon of Oakbrook was of a similar view and stated that “the plaintiffs’ causes of action against the third defendants accrued at the dates on which the consequential structural damage to their houses first came into existence” (p. 208 of the report).
130. The principle expressed in these cases is the same as that recognised by the Court of Appeal in this case: the cause of action in negligence will not arise until physical damage has been caused to the buildings; the presence of an underlying latent defect is not enough. It is true, of course, that the reasoning in Pirelli has been subject to academic and judicial criticism, with other common law countries resiling from it and the Latent Damage Act 1986 reversing its harsh result.
131. Indeed, even subsequent decisions of the House of Lords and the Privy Council suggest an alternate approach to Pirelli. In Murphy v. Brentwood District Council  1 A.C. 398 and Invercargill City Council v. Hamlin  AC 624, it was held that the better approach to a latent damage case such as this is to treat it as pure economic loss. If I may be forgiven for a long quotation from the judgment of the Privy Council (delivered by Lord Lloyd of Berwick) at pp. 646-649 of Invercargill, which explains this approach and reasons for it:
“Their Lordships refer to Pirelli as an unfortunate decision not only because that is how the House itself regarded the decision … but also because it has been subjected to a barrage of judicial and academic criticism ever since … Their Lordships do not find it necessary to review these criticisms in any detail, or to enter into the question what Lord Fraser of Tullybelton may have had in mind when he referred to buildings which are ‘doomed from the start:’ … Instead they will quote a passage from an article written shortly after the Pirelli case but before Murphy’s case  1 A.C. 398 , since it leads on directly to the ground on which the limitation point must now be decided:
‘There is undoubtedly a superficial attraction in the argument which found favour with all five Lords of Appeal in Pirelli’s case. If the nature of the damage suffered is regarded as a physical loss, it does indeed look as if the principle in Cartledge v. E. Jopling & Sons Ltd. should apply, on the basis that the damage is there but is unknown and, it may be, unknowable. But if the damage is recognised as economic the whole picture changes. It is thought that a failure to appreciate this point undermines the whole thrust of the argument in Pirelli’s case:’ Stephen Todd, ‘Latent Defects in Property and the Limitation Act: A Defence of the ‘Discoverability’ Test’ (1983) 10 N.Z.U.L.R. 311, 316.
This passage is a remarkable anticipation of the reasoning of the House of Lords in Murphy, where Lord Keith of Kinkel said [at p. 466]:
‘In my opinion it must now be recognised that, although the damage in Anns  AC 728 was characterised as physical damage by Lord Wilberforce, it was purely economic loss.’
Lord Keith went on, at pp. 467-468, to quote with approval a lengthy passage from the judgment of Deane J. in Sutherland Shire Council v. Heyman (1985) 157 C.L.R. 424 , 503-505:
‘Nor is the respondents’ claim in the present case for ordinary physical damage to themselves or their property. Their claim, as now crystallised, is not in respect of damage to the fabric of the house or to other property caused by collapse or subsidence of the house as a result of the inadequate foundations. It is for the loss or damage represented by the actual inadequacy of the foundations, that is to say, it is for the cost of remedying a structural defect in their property which already existed at the time when they acquired it . . . It is arguable that any such loss or injury should be seen as being sustained at the time of acquisition when, because of ignorance of the inadequacy of the foundations, a higher price is paid (or a higher rent is agreed to be paid) than is warranted by the intrinsic worth of the freehold or leasehold estate that is being acquired. Militating against that approach is the consideration that, for so long as the inadequacy of the foundations is neither known nor manifest, no identifiable loss has come home: if the purchaser or tenant sells the freehold or leasehold estate within that time, he or she will sustain no loss by reason of the inadequacy of the foundations. The alternative, and in my view preferable, approach is that any loss or injury involved in the actual inadequacy of the foundations is sustained only at the time when that inadequacy is first known or manifest. It is only then that the actual diminution in the market value of the premises occurs. On either approach, however, any loss involved in the actual inadequacy of the foundations by a person who acquires an interest in the premises after the building has been completed is merely economic in its nature.’
Once it is appreciated that the loss in respect of which the plaintiff in the present case is suing is loss to his pocket, and not for physical damage to the house or foundations, then most, if not all the difficulties surrounding the limitation question fall away. The plaintiff's loss occurs when the market value of the house is depreciated by reason of the defective foundations, and not before. If he resells the house at full value before the defect is discovered, he has suffered no loss. Thus in the common case the occurrence of the loss and the discovery of the loss will coincide.
But the plaintiff cannot postpone the start of the limitation period by shutting his eyes to the obvious. In Dennis v. Charnwood Borough Council  Q.B. 409, 420, a case decided in the Court of Appeal before the Pirelli case reached the House of Lords, Templeman L.J. said that time would begin to run in favour of a local authority:
‘if the building suffers damage or an event occurs which reveals the breach of duty by the local authority or which would cause a prudent owner-occupier to make investigations which, if properly carried out, would reveal the breach of duty by that local authority.’
In other words, the cause of action accrues when the cracks become so bad, or the defects so obvious, that any reasonable homeowner would call in an expert. Since the defects would then be obvious to a potential buyer, or his expert, that marks the moment when the market value of the building is depreciated, and therefore the moment when the economic loss occurs. Their Lordships do not think it is possible to define the moment more accurately. The measure of the loss will then be the cost of repairs, if it is reasonable to repair, or the depreciation in the market value if it is not: see Ruxley Electronics and Construction Ltd. v. Forsyth  1 A.C. 344.
This approach avoids almost all the practical and theoretical difficulties to which the academic commentators have drawn attention, and which led to the rejection of Pirelli by the Supreme Court of Canada in the Kamloops case, 10 D.L.R. (4th) 641. The approach is consistent with the underlying principle that a cause of action accrues when, but not before, all the elements necessary to support the plaintiff's claim are in existence. For in the case of a latent defect in a building the element of loss or damage which is necessary to support a claim for economic loss in tort does not exist so long as the market value of the house is unaffected. Whether or not it is right to describe an undiscoverable crack as damage, it clearly cannot affect the value of the building on the market. The existence of such a crack is thus irrelevant to the cause of action. It follows that the judge applied the right test in law.
Their Lordships repeat that their advice on the limitation point is confined to the problem created by latent defects in buildings. They abstain, as did Cooke P., from considering whether the ‘reasonable discoverability’ test should be of more general application in the law of tort.”
132. Murphy v. Brentwood DC and Invercargill v. Hamlin were decided before Irish Equine, which could explain why Geoghegan J. did not address the defect/damage distinction and instead approached the claim as one solely for pure economic loss, although the learned judge referred only to Pirelli and not these later cases. It would be interesting to know whether the same outcome would have been reached had he referred to those decisions.
133. Not alone has there been no legislative equivalent to the Latent Damage Act 1986 in this jurisdiction, but in fact Pirelli still seems to be regarded as good law. It certainly found favour with this Court in Hegarty, by which stage the criticism of the decision must have been well-known, and was expressly considered by Geoghegan J. in Irish Equine as representing Irish law in respect of the unavailability of a discoverability test, at least. Nonetheless, in normal circumstances I would be hesitant to follow a decision which has been so widely criticised and has largely been set to one side. For my part, however, I am not sure that all of the criticism of Pirelli is warranted, or that it truly gives rise to such conceptual difficulties and nuanced, unrealistic distinctions as has been alleged in some quarters, for if it did, it is highly unlikely that it would have received a series of continuous endorsements in this jurisdiction.
134. Be that as it may, it must be acknowledged that no point was taken on whether or not the approach adopted in Invercargill should commend itself to this Court. As previously stated, this case was argued in accordance with well-established principles concerning the accrual of a cause of action for physical damage to property. Thus, through that prism, the issue presenting in this case calls for a determination of when the cause of action accrued, and that in turn necessitates an analysis of the distinction between “defect” and “damage”. It is in accordance with that legal framework that I propose to decide the case. Accordingly, apart from acknowledging the decision, further analysis of Invercargill is not required.
135. In Pirelli, the use of incorrect lining in the chimney was akin to the use of wrong materials in the foundation in the within case. The actionable ‘damage’ in Pirelli did not occur as of the moment of the use of the incorrect lining; that was but a defect. The damage occurred later, when cracks became evident in the top of the chimney. This was the physical damage giving rise to the cause of action. In that case, owing to the location of the damage at the top of the chimney, it could not reasonably have been discovered within time, giving rise to the harsh result. The key point for present purposes, however, is that using incorrect materials gave rise only to a latent defect, and more – physical damage – was required before the clock began to run. Thus in such a case there is a wrongful act giving rise to a latent defect, but that is actionable only upon the manifestation of subsequent physical damage.
136. Applying that finding and those in London Congressional Union and Ketteman v. Hansel to the present case, it can be seen that the defective foundations did not produce their damaging effects at once. No cracks were reported in the walls of houses 2 and 3 until December, 2005. Only at that point did the latent defect in the foundations cause actual physical damage to the building, in the form of cracks. Accordingly, it was not until December, 2005 that ‘damage’ occurred, as that concept has been above described. It follows that it could not have been manifest before then; as it happens, on the facts, the occurrence of damage and its manifestation appear to have been simultaneous; both coincided and converged at the same time. It was therefore in December, 2005 that the Plaintiffs’ cause of action accrued, and not the date of the earlier pouring or certification of the defective foundations. It will be observed that, strictly speaking, whether time runs from when the damage occurred or when it was manifest is not central to the resolution of this appeal, as on either test the Plaintiffs/Respondents would prevail.
137. Finally, I will reiterate a point made earlier in this judgment. The aim of a comprehensive judgment such as this is to add clarity and certainty to a muddled area of the law. As the above discussion makes clear, however, this is far from an easy task. Litigants, practitioners and judges alike would benefit greatly from the introduction of a statutory discoverability test in cases such as this. It is to be hoped that such a call will be heeded.
138. To summarise, what follows is the position in respect of the running of the limitation clock in property damage claims founded in negligence:
The Options on the Spectrum
i. Five distinct potential start points emerge from the case law. They are a) when the wrongful act is committed; b) when the damage occurs, regardless of whether or not it is manifest; c) when the damage is manifest; d) when the damage is discoverable, by which I mean it could reasonably be discovered; and e) when the damage is discovered. Evidently the date first mentioned is invariably the earliest and thus the most favourable to the defendant seeking to rely on the Statute, with the other possibilities becoming increasingly preferable to the plaintiff as we move towards the date of actual discovery.
The Date of the Wrongful Act
ii. Although there was certainly a suggestion by McCarthy J. in Hegarty that time should run from the moment that the wrongful act is committed, this seems to be at odds with the general tenor of the rest of his judgment and I do not believe that it is what the learned judge intended. In any event such a start point is precluded by the very wording of section 11(2)(a) itself, which refers to the date of the accrual of the cause of action; clearly, that cannot be before any damage has occurred, the same being an essential element of the tort of negligence. Accordingly, the first mentioned start point can be ruled out.
The Date of Discoverability and the Date of Actual Discovery
iii. The date of discoverability refers to the date when damage could or ought with reasonable diligence to have been discovered. This is obviously distinct from the date of actual discovery, although those two dates may sometimes align (indeed is true that, pursuant to section 2 of the 1991 Act, there may be occasions on which the date of discoverability is in fact later than the date of actual discovery in personal injuries cases, insofar as the plaintiff would yet have to have knowledge of the identity of the defendant and their role in his injury, but it is accepted by all that neither this statutory form of discoverability, nor any other, has any bearing on the present case). The date of discoverability is also distinct from the date of manifestation of damage referred to in this judgment, in that the date of manifestation refers only to damage which is capable of discovery, whereas the date of discoverability as presently understood imports an element of the damage being objectively reasonably discoverable, even if it in fact went undiscovered.
iv. It seems clear from the case law that there is no element of discoverability in the test in property damage claims. This was expressly accepted by the Court of Appeal, as it had to, unless it disapplied Hegarty v. O’Loughran. It could only have done so if it saw a distinction in the accrual date between personal injury actions and the subject matter of the instant case. It saw none, a conclusion not seriously contested by the Respondents. Despite the harshness that this can give rise to, such is the law, and it is not open to this Court to read a discoverability test into section 11(2)(a) even if it was minded to.
v. Similarly, the cases establish clearly that the date of actual discovery is not the relevant one.
The fourth and fifth mentioned possibilities can therefore be disregarded. That leaves open either the date on which the damage occurred, or that on which it was manifest.
Date of Occurrence or Date of Manifestation of Damage
vi. Whilst the meaning of “occurred” is straightforward, it is not so easy to pin down precisely what is meant by “manifest”, and especially how one might differentiate it from the “discoverability test” as it appears in the cases. From a reading of the case law, I understand “manifest” to mean the date on which damage is capable of being discovered and proved by a plaintiff.
vii. I take Hegarty v. O’Loughran as having decided that the relevant start date in personal injuries cases is the date on which the personal injury was manifest. McCarthy J. would have pitched it from the date on which the damage occurred, but from a reading of the judgments of Finlay C.J. and Griffin J., who no doubt considered himself in complete agreement with the Chief Justice, I consider that the majority of the Court decided that time should run from when the personal injury was manifest. I am satisfied that this was the correct interpretation of the old section 11(2)(b).
viii. As mentioned, Hegarty was a personal injuries case. The question has since been posed, but never definitively decided by this Court, whether the “manifest damage” start point from Hegarty can be transposed to property damage claims. That some different considerations may arise in personal injuries cases vis-à-vis property damage claims is apparent from the intervention of the legislature in 1991 in respect of the former but not the latter. Hegarty was, however, decided before the 1991 Amendment Act was enacted. More pertinently, the relevant wording of section 11(2)(b) of the Act, with which that case was concerned, was precisely the same as the current wording of section 11(2)(a): “shall not be brought after the expiration of … years from the date on which the cause of action accrued.” I do not see any reason why the manifestation of the damage should not therefore also be the proper start point in property damage claims, particularly as it is well understood that the potential for injustice to a plaintiff is every bit as real in such cases as it is in personal injuries claims. Despite some hesitation in the case law about so declaring, to my mind there is no reason to treat the two differently for limitation purposes. I would, therefore, hold that time starts to run for limitation purposes in property damage claims from the date when the damage is manifest.
ix. I do not believe that this conclusion is inconsistent with subsequent Irish case law. In Irish Equine, Geoghegan J. read Hegarty as saying that time runs from the date of manifestation of damage; he did not have to offer a definitive view on whether this could be transposed to property damage claims, as even if it could he was of the view that the plaintiff was out of time. In Hegarty v. D&S Flanagan Bros., a property damage case, Birmingham J. offered the view that the time limit begins to accrue on the date on which the damage manifests itself. The position of Herbert J. in O’Donnell v Kilsaran Concrete, while somewhat uncertain, is not inconsistent with the approach herein outlined. The decision of Dunne J. in Murphy v. McInerney Construction is above discussed and explained. Finally, Gallagher v. ACC Bank is expressly stated to have been decided on the particular facts as pleaded by the plaintiff in that case.
x. As regards what constitutes damage, I accept that there is a definite distinction between a “defect” and the subsequent damage which it causes. Time runs from the manifestation of damage, rather than of the underlying defect. Thus it is not the latent defect which needs to be capable of discovery: it is the subsequent physical damage caused by that latent defect.
xi. To the extent that Irish Equine suggests that time runs from the date of the manifestation of the defect rather than of the damage, I believe this is attributable to the fact that Geoghegan J. approached the case as being one based on pure economic loss. On the pleadings in that case, the defect in design was itself the damage; this explains why time ran from 1987.
139. In applying the above principles to the instant case, one would normally begin by identifying the primary findings of fact as made by the trial judge, which, if supported by credible evidence, would of course have to be accepted by this Court. Unfortunately, no such findings were made in this case. In some, indeed perhaps in the majority of like situations, an appellate court would be minded to remit the matter so that such findings could be made, but none of the parties to the within appeal favours such an approach. That viewpoint is not determinative but might be of influence if the Court otherwise felt that the entire matter could be disposed of at this point, in proceedings which concern events which occurred 13 years ago. The Court of Appeal was likewise hampered by the absence of such findings, but from a consideration of the evidence it was able to satisfy itself as to when the damage constituting the tort occurred. That evidence has been extensively set out at paras. 13-17, supra.
140. Although recognising the unsatisfactory nature of this approach, I intend to adopt a similar course of action as on the critical points the evidence does not appear to diverge or be in conflict. It is clear from the uncontroverted testimony of Mr Brandley that the cracks constituting the damage to the house occurred in December, 2005. This is therefore one of those cases where the occurrence and manifestation of the damage happened on or about the same date. The other evidence, that of Mr Deane, was directed towards the laying of the foundations said to be defective from the start. As previously explained, without loss or damage attaching to such defects, no cause of action exists. That damage was completed in December, 2005. In coming to this conclusion, it is important to recall that the subject matter of the proceedings sought compensation for the damage caused to the Respondent’s property, that is, houses 2 and 3. Given this conclusion, it is immaterial whether different legal principles should apply to the case against Mr Deane as opposed to that against Mr Lohan.
141. Accordingly, I would dismiss the appeal.