Defective Premises Act 1972 – Defining 'In The Course Of A Business'

The case of Zennstrom & Anr v Fagot & others, [2013] EWHC 288 (TCC), 21 February 2013 looks at whether the owners of a property which had been completely rebuilt some 12 months prior to the sale, were liable to the purchasers who had discovered after their purchase that the building was so unsafe that it needed to be demolished. To succeed in making a claim under the Defective Premises Act 1972, the Claimants had to show that the sellers had been acting as property developers.

The Facts:

During 2009 Mr and Mrs Zennstrom purchased a property in Hamble, Southampton for £1.1m from Ms Moseley and Ms Wilks. The property had been completely rebuilt some 12 months prior to the sale. Unfortunately, the Zennstroms found that the building was structurally unsafe and needed to be demolished.

The Zennstroms commenced proceedings against Ms Moseley and Ms Wilks as well as the architect and contractor who had carried out the rebuilding works and the company that had carried out calculations in relation to the steelwork. As the Judge pointed out, Ms Moseley and Ms Wilks may have been included in this firing line simply because the architect appeared not to have any insurance and the contractor appeared not to have any assets.

On 21 February 2013 Mr Justice Edwards-Stuart considered as a preliminary issue the question of whether or not Ms Moseley and Ms Wilks owed a duty to the Zennstroms under the Defective Premises Act 1972 ("the Act").

The Zennstroms alleged that the Ms Moseley and Ms Wilks had always intended to sell the property and were therefore acting in the capacity of property developers. If so, they would be liable under the Act as it provides that a person who, in the course of a business, carries out work for or in connection with the provision of a dwelling is under an obligation to the homeowner or any subsequent purchasers to see that the work is done in a workmanlike or professional manner with proper materials so that the dwelling is fit for habitation on completion.

Ms Moseley and Ms Wilks maintained that their intention when they purchased the property in 2004 was to turn it into their 'dream home'. They maintained that it had never been their intention to resell it and they were not property developers, contending that they had been required to sell the property solely as a result of a change in employment circumstances.

The Issue:

Were Ms Moseley and Ms Wilks acting as property developers so that they were liable under the Defective...