The Pyrite Resolution Act 2013 provides for the making of the Pyrite Remediation Scheme for certain dwellings affected by reactive pyrite and for the establishment of the Pyrite Resolution Board (PRB) to manage the implementation of such scheme. The Pyrite Remediation Scheme is for the remediation of eligible dwellings that have a damage condition rating of 2 as a result of pyritic heave caused by the swelling of hardcore under ground floor slabs.

 

Eligibility

1. The Pyrite Remediation Scheme (the Scheme) may apply to the following classes of dwellings, which are used or suitable for use by a person as a place to reside:
• Houses,
• Apartments,
• Duplexes,
• Maisonettes.
2. The Scheme may also apply to a structure, area or service of a building comprising apartments, duplexes or maisonettes (or any combination of such dwellings) common to any two or more of such dwellings.
3. To be included in the Scheme, a dwelling must have a damage condition rating of 2, as defined in the Irish Standard I.S. 398-1:2013 Part 1, consistent with pyritic heave and it must be verified that the damage is attributable to pyritic heave following the Damage Verification Process.
4. A person who is the owner or joint owner of a dwelling that complies with the eligibility criteria, may apply to the PRB for that dwelling to be included in the Scheme subj. to paragraphs 5 and 6.
5. A person who on 12 December 2013 owns, whether or not jointly, more than one dwelling may make an application to the PRB for inclusion of only one of those dwellings in the Scheme.
6. Where a person purchased a dwelling on or after 12 December 2013, that person is not entitled to apply for inclusion of the dwelling in the Scheme where he/she knew or ought to have known that the dwelling was constructed using hardcore containing reactive pyrite.
7. Paragraphs 5 and 6 above do not apply where the applicant is an approved housing body.
8. The dwelling must have been constructed and completed between 1 January 1997 and 12 December 2013 within the administrative areas of Dun Laoghaire, Rathdown, Fingal, Kildare, Meath, Offaly or South Dublin County Councils; or Dublin City Council.
9. The applicant must show to the satisfaction of the PRB that he/she does not have available to him or her any practicable option, other than under the Scheme or the use of his or her own resources, to remediate or secure the remediation of the dwelling.
10. It is a condition of eligibility under the Scheme that the Applicant gives his/her consent to the institution by the PRB of civil proceedings relating to loss arising from the act or default of any person that causes significant pyritic damage to the dwelling.

The Stages of the Scheme

Stage 1:

Application:

1. The owner or joint owner of a dwelling to which the Act applies may apply to the PRB for that dwelling to be included in the Scheme. Where a joint owner applies, the consent of the other joint owner(s) is required.

2. The online application form on the PRB website, www.pyriteboard.ie must be fully completed for submission of a valid application.

3. The Building Condition Assessment Report of a competent person must be electronically attached to the application in PDF format. The competent person undertaking the Building Condition Assessment must have sufficient theoretical and practical training, experience and knowledge. Engineers Ireland http://www.engineersireland.ie keep a register of professionals who have undertaken training and are certified competent to carryout Building Condition Assessments. Other professional bodies e.g. Architects and Surveyors may be consulted with regard to competent persons in their profession.
The homeowner is liable for the cost of the Building Condition Assessment.

4. The application form shall contain such information as the PRB considers necessary to make its determination and may include all or any of the following:
• Details of applicant(s) including name, address, PPS Number, date of birth
• Details of dwelling including address, location, building type, floor area,
• Details of property management company (if applicable),
• Ownership and occupation of dwelling details,
• Details of warranty/insurance cover (if applicable),
• Damage history,
• Actions taken by the applicant to secure the remediation of his/her dwelling or to secure compensation for the damage,
• Legal proceedings taken by or on behalf of the applicant (if applicable),
• Details of builder/developer,
• Actions taken by the builder/developer to secure the remediation of the dwelling or to secure compensation for the damage whether that be as a result of a successful insurance claim or a consequence of legal proceedings ( if known),
• The PRB may request from an applicant such other information or clarification as it considers necessary on all or any of the details provided in an application.
5. An acknowledgement, including a unique reference number, will be issued to the applicant when an application is lodged.

Validation:

1. The application will be considered by the PRB to verify that it complies with the relevant eligibility criteria in Section 3 to allow for its validation.

2. The PRB will validate an application if it considers that it meets all the eligibility criteria in Section 3 of the PYRITE REMEDIATION SCHEME guidelines as amended February 2015 with the exception of the damage verification process and will notify the applicant of its decision, not later than 21 days from the making of the decision. If the application is validated the PRB will then proceed to the Assessment, Verification and Recommendation Process.

3. In considering an application under this section, the PRB may request from the applicant such further information as it considers necessary to establish eligibility, including the following:
• the extent to which the dwelling is covered by a structural guarantee, warranty or insurance,
• whether a claim has been made under any such structural guarantee, warranty or insurance and the outcome of any such claim,
• whether legal proceedings have been initiated or concluded in relation to damage to the dwelling arising out of or in connection with pyritic heave, by or on behalf of the applicant,
• if concluded, the outcome of the legal proceedings,
• what other steps the applicant has taken to have the builder/developer remediate the dwelling.

4. If an application does not meet the conditions of eligibility, the PRB will refuse the application and will notify the applicant of the reason(s) for this decision, not later than 21 days from the making of the decision. This decision may be appealed as outlined

Stage 2

Assessment, Verification and Recommendation Process:

1. Following validation, the application is referred to the Housing Agency and the Assessment, Verification and Recommendation process is undertaken. Confirmation that the damage recorded in the Building Condition Assessment Report is attributable to pyritic heave will be established at this stage. This may involve inspection of the dwelling and the testing of the hardcore material.

2. When submitting an application, the applicant consents to hardcore samples being taken and laboratory testing of the hardcore, to establish if pyrite and secondary minerals that may be associated with heave are present.

3. The Housing Agency, having considered any report produced during the process and all information contained in the application, shall furnish a recommendation to the Decision Maker appointed by the PRB including reasons therefore, to include the dwelling in the Scheme, or to exclude the dwelling from the Scheme.

Stage 3

Remedial Works Plan:

1. The PRB appointed Decision Maker will consider the recommendation of the Housing Agency and, where he/she agrees with the recommendation, will notify the applicant of the decision to: (a) include the dwelling in the Scheme, or (b) exclude the dwelling from the Scheme. The notice will be given not later than 21 days following the making of that decision.

2. Where the Decision Maker disagrees with the recommendation of the Housing Agency, he/she will refer the application to the Board (i.e. Chairman and members of the Pyrite Resolution Board) for decision, and the applicant will be notified accordingly. A decision to exclude a dwelling from the Scheme may be appealed to the Board, or the Appeals Officer appointed by the Minister, as appropriate.

3. An applicant, whose dwelling is excluded from the Scheme, may reapply if the qualifying criteria are subsequently satisfied.

Stage 4

Pyrite Remediation Works:

1. Once a dwelling is included in the Scheme, the Housing Agency will implement the remediation process and will undertake procurement of professional services and the remediation contracts. The procurement of consultants, contractors and service providers will be undertaken by the Housing Agency in accordance with national procurement guidelines and EU procurement regulations.

2. Normally, the reinstatement of the building elements will be on a ‘like for like’ basis relative to a standard that existed prior to the occurrence of damage caused by pyritic heave, having regard to good building practice. Replacement of finishes will also be on a ‘like for like’ basis, determined by the Housing Agency, following consultation with the scheme participant prior to commencement of works. However, expensive or difficult to source finishes will be replaced by finishes of good serviceable quality.

3. Fixtures and fittings, e.g. kitchen units, sanitary ware etc., will be removed as necessary by the contractor to facilitate remediation and will be reinstated on completion.

4. Any fixtures and fittings, damaged as a result of pyritic heave, will be repaired or replaced if necessary. Replacement, where necessary, will generally be on a ‘like for like’ basis, determined by the Housing Agency following consultation with the scheme participant prior to commencement of works. However, expensive or difficult to source fixtures and fittings will be replaced by fixtures and fittings of good serviceable quality.

5. The completed work will be snagged by the consultant appointed to inspect and monitor the works, under the overall supervision of the Housing Agency.

6. Following the completion of the remediation works, a Certificate of Remediation will be provided to the home owner by the Housing Agency. The Certificate will be completed and signed by the Design Professional and by the Contractor who undertook the works, in accordance with the requirements specified in that standard.

7. After this certificate is issued, the scheme participant may submit a claim to the Housing Agency to recoup the vouched cost of the alternative accommodation and the cost of removal and storage of the contents of the dwelling.

Dwelling Inspection:

1. The PRB and Housing Agency reserve the right to authorise inspections of the dwelling, to ensure compliance with the provisions of the Scheme and the Pyrite Resolution Act 2013. These inspections may be undertaken by the PRB or Housing Agency staff and their representatives; contractors and their representatives/agents.

2. Notice will be given to the applicant/scheme participant prior to an inspection.

3. An inspection of the dwelling may be undertaken after an application is received by the PRB and up to the end of the defects period, which is normally 12 months after completion.

4. Inspections undertaken for the purpose of this Scheme, involve no warranty by the PRB or the Housing Agency or their representatives, as to the standards of the construction of the house(s)/apartment(s).

Case law:

Brandley and WJB Developments Limited v Hubert Deane T/A Hubert Deane & Associates and John Lohan T/A John Lohan Ground Works Contractors (High Court 2010/10994P and Appeal 2015/245).

Background:
1. Mr Brandley and WJB Developments Limited, the developers and plaintiffs, initiated proceedings against the defendants on 30 November 2010, claiming damages for breach of contract and negligence arising from the construction of two houses in County Galway.

2. The first-named defendant, Mr Deane, was the supervising consulting engineer, who certified compliance with planning permission and building standards. The second-named defendant, Mr Lohan, was the groundworks contractor, whose work included the foundations of the houses.

3. The developers (who continued to own the houses) argued that the large irreparable cracks, which had appeared in the external walls of the houses and which had rendered the houses unsafe, were a result of defective foundations and the negligence of the defendants.

4. The defendants pleaded that the developers’ claim was “statute-barred” under the Statute of Limitations 1957, meaning that the time limit of six years for the developers to initiate proceedings had already passed by the time proceedings began.

5. The crucial dates identified by the parties and the court are listed below.

March 2004: Foundations were completed
September 2004: First-named defendant engineer issued a certificate of compliance with planning permission and building regulations
January/February 2005: Houses were completed
December 2005: First-named plaintiff/developer observed cracks in the houses
30 November 2010: Plaintiffs/developers issued proceedings

6. The case to be decided in the High Court was whether or not the developers’ claim was “statute-barred” as a claim in negligence. In other words, did all of the necessary elements of negligence first exist in March 2004 as argued by the defendants or in December 2005 as argued by the developers?

7.  The developers (as plaintiffs) argued that “damage”, an essential element of the tort of negligence, did not occur until December 2005.

8. The defendants argued that the six-year statutory period of limitation began to run in March 2004, when the foundations were installed. The defendants contended that the foundations were so fundamentally defective that the developers had a full cause of action in negligence/tort in March 2004. The defendants also argued that, to hold that the cause of action only accrued in December 2005, would effectively introduce a “discoverability” test, similar to that used in cases involving negligent acts causing personal injury.

High Court and Court of Appeal:

9. On 16 April 2015, the then President of the High Court, Mr Justice Kearns, held that the developers’ claim was “statute-barred” on the basis that the relevant Irish decisions in this area – including the judgment of Mr Justice Barr in Murphy v McInerney Construction Limited [2008] IEHC 323 – “firmly exclude a discoverability test as being the relevant starting date”. The learned High Court judge concluded that the developers’ case became “statute-barred” six years after the foundations were installed. The developers’ claim was dismissed.

10. The Court of Appeal (Ryan, Irvine and Hogan JJ) on 2 February 2016 overturned the High Court’s decision and held that the developers’ proceedings were issued on time and were not “statute-barred”.
Supreme Court

11. The defendants appealed the Court of Appeal’s decision to the Supreme Court. Taking an opportunity on 15 November 2017 to provide clarity on the law, Mr Justice McKechnie (with Clarke CJ, MacMenamin, Dunne and O’Malley JJ concurring) provided an 81-page written judgment. Holding that the plaintiffs’ claim was issued within time and not “statute-barred”, Mr Justice McKechnie stated:
“… 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 damage caused by that latent defect…”
The Supreme Court held that a “discoverability” test should not apply and, instead, the statutory period of limitation should run from when the damage became “manifest”:
“… 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 [case law]. From a reading of the case law, I understand “manifest” to mean the date on which damage is capable of being discovered by a plaintiff…”

In deciding the case, Mr Justice McKechnie stated:
“… without loss or damage attaching to… defects, no cause of action exists. The damage was completed in December, 2005…”

Conclusions

Although specific to its facts, the Supreme Court’s decision affirms a number of general principles:

1. A cause of action in damages, for a non-personal-injury claim, accrues only at the time that “damage” becomes “manifest”.

2. Damage is “manifest” when it is capable of being discovered (irrespective of whether it has or has not been discovered or ought to have been discovered).

3. In a construction context, there may be a distinction between defective work, such as the installation of defective foundations, and actual damage occurring or becoming manifest.

4. A “discoverability” test does not apply in respect of non-personal-injury claims in tort/negligence.

5. Causes of action in contract and in tort/negligence may accrue at different points in time.
This case reminds us that non-personal-injury claims for negligence against those involved in the construction industry, including engineers and architects, may in certain circumstances be initiated and successfully prosecuted more than six years after the defective work was carried out. This may have particular implications for the professional indemnity insurers of construction-related professionals.

The above is intended for information purposes only, and is not intended to be relied upon as legal advice. Please contact us on 01 – 676 3257 for advice specific to your needs. We, at Fitzsimons Redmond, are happy to discuss with you any questions and concerns you might have in relation to the impact of pyrite on your home.

By Eva Mitchell, intern at Fitzsimons Redmond