The decision entered by the Conseil d’Etat on 10 February 2017 (CE, 10 February 2017, No. 391722, Sté Fayat Bâtiment) provides us with an opportunity to revisit the legal basis of the remedies among contractors and the time limits applicable to such actions.
The case law currently distilled by judicial courts does not provide any explicit response to the double question related to the starting point and duration of the time periods for seeking remedies among builders. Is it necessary to apply the general five-year statute of limitations provided for in Article 2224 of the French Civil Code and Article L.110-4 of the French Commercial Code, or must we, in accordance with Articles 1792-4-2 and 1792-4-3 of the French Civil Code, apply the ten-year period applicable from acceptance of the works?
It is necessary to recall that the Cour de cassation consistently holds that “persons liable as a matter of law under Articles 1792 et seq. of the French Civil Code, which, after payment, do not hold a subrogation right, as regards the benefit of this action reserved for the project owner and the successive owners of the works, under the above articles, may not institute a warranty action or a recourse action against the other joint tortfeasors, unless on the basis of the standard liability rules applicable as regards their relationships” (Cass. 3rd Civ., 8 June 2011, No. 09-69.894, recalled more recently by Cass. 3rd Civ., 11 September 2012, No. 11-21.972).
As a consequence, actions among contractors are contractual in nature when a contractual Relationship exists among them – such is the case as regards an action against a subcontractor or supplier - and are tort actions absent such contractual relationships (see in particular. Cass. 3rd civ, 15 December 1993, No. 91-20.130; Cass. 3rd Civ., 15 December 2010, No. 09-17.119).
While current case law appears to be rather clear as regards the nature of the actions that may be instituted among contractors, such is not at all the case concerning the statute of limitations applicable to such types of actions.
This is even truer since the coming into effect of the reform of the statute of limitations by Act No. 2008-561 of 17 June 2008.
Prior to such reform, the Cour de cassation had held, on the basis of former Article 2270-1 of the French Civil Code, that, as actions among contractors relied on general civil liability rules, the statute of limitations could not start from the works’ acceptance date (Cass. 3rd Civ., 8 February 2012, No. 11-11.417 and Cass. 3rd Civ., 11 July 2012, No. 10-28.535). The said action “is time-barred ten years after the manifestation of the damage or its aggravation” (Cass. 3rd Civ., 11 September 2012, No. 11-21.972). In this respect, the Cour de cassation held repeatedly that the phrase “manifestation of the damage” corresponds to the filing against the builder of an action that would justify a recourse action by the builder against the other contractors (see recently Cass. 3rd Civ., 2 June 2015, No. 14-16.823).
Actions among builders should thus comply with the time limits applicable to civil liability actions governed by standard legal rules. We note that, in all decisions that were entered since the coming into effect of the new statute of limitations, in relation to cases governed however by the former rules, the Cour de cassation never deemed it necessary to revise its position. In conclusion, the Cour de cassation considers that only general civil liability rules are applicable and that it is therefore necessary to apply a 10-year statute of limitations (and not a non-tollable statute of limitations), after the manifestation of the damage or its aggravation.
However, in fact, with the reform of the statute of limitations, the standard 10-year period provided for in the former Article 2270-1 of the French Civil Code was reduced to 5 years by the new Article 2224 of the said Code.
It is thus necessary to examine whether Article 1792-4-3 of the French Civil Code, derived from the said reform, applies to actions among builders. The said provisions set forth that “aside from the actions governed by Articles 1792-3, 1792-4-1 and 1792-4-2, liability suits against builders referred to in Articles 1792 and 1792-1 and their subcontractors are time-barred ten years from acceptance of the works.”
By making no distinction according to the legal capacity of the plaintiff suing the subcontractors and the builders, Articles 1792-4-2 and 1792-4-3 of the French Civil Code give the impression that the period of 10 years from acceptance of the works applies to “liability suits” instituted by the project owner or by the buyer of the building, as well as to the actions instituted by builders in order to seek the indemnification of a personal loss or in connection with their recourse actions.
However, this analysis has not yet been endorsed by the Cour de cassation.
Nevertheless, we must note that, in a decision entered on 10 April 2012, the Douai Administrative Court of Appeals clearly held that “the warranty action instituted by a builder against another builder on the basis of the liability in tort is governed, since the coming into effect of the Act of 17 June 2008, by Article 22254 of the French Civil Code and not by Article 1792-4-3, which only applies to actions instituted by the project owner or by the buyer” (CAA Douai, 10 April 2012, No. 10DA01686).
Even more importantly, in a decision dated 10 February 2017, the Conseil d’Etat specified that third-party claims among builders are not governed by Article 1792-4-3 of the French Civil Code, which only applies to proceedings brought by the project owner, but are governed instead by general tort law rules providing, in the former Article 2270-1 of the French Civil Code, for a statute of limitations of 10 years starting from the manifestation of the damage (with such period being replaced in 2008 by the 5-year period provided for in Article 2224 of the said Code). The manifestation of the damage is deemed to occur on the date on which the builder was informed of the merits of the proceedings brought by the project owner.
These decisions made by administrative courts tend to apply the reasoning followed by the Cour de cassation before the statute of limitations was reformed by the Act of 17 June 2008. This reform now needs to be clarified.