England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
MR JUSTICE EDWARDS-STUART
[2013] EWHC 868 (TCC)

		Royal Courts of Justice Strand, London, WC2A 2LL
		27/03/2014

Lord Justice Vos:

1. This is the judgment of the court to which all members have contributed.
2. This appeal raises three issues relating to the works of renovation and improvement to the property at 63 Deodar Road, Putney, London SW15 2NU (the "Property") belonging to the claimants, Mr Stephen West, a successful banker, and his wife, Dr Carol West, an academic neuroscientist (the "Wests", or individually "Mr West" and "Mrs West"). The claim was brought against the Wests' architect Ian Finlay & Associates ("IFA"), whose sole principal was Mr Ian Finlay ("Mr Finlay").
3. The case was tried by Edwards-Stuart J in November 2012, who delivered a judgment (running to almost 400 paragraphs) on 16^th April 2013, awarding damages to the Wests against IFA in the sum of £649,251.06 plus interest at 7% per annum over base rate on their actual expenditure, and 2% per annum on general damages, totalling £243,688.89. IFA appeals with the permission of Tomlinson LJ granted on 31^st July 2013.
4. The first question concerns the construction of what has been referred to as the net contribution clause (the "NCC") in the appointment agreement between the Wests and IFA made in February 2006 (the "Agreement"). It provided as follows:-

"We confirm that we maintain professional indemnity insurance cover of £1,000,000.00 in respect of any one event. This will be the maximum limit of our liability to you arising out of this Agreement. Any such liability will expire after six years from conclusion of our appointment or (if earlier) practical completion of the construction of the Project. Our liability for loss or damage will be limited to the amount that it is reasonable for us to pay in relation to the contractual responsibilities of other consultants, contractors and specialists appointed by you" (emphasis added).

5. In essence, the judge held that the NCC did not operate to limit IFA's liability to the Wests in a situation where the other party liable was the main contractor, Maurice Armour (Contracts) Limited ("Armour"). Accordingly, he did not reduce the Wests' damages on account of the fact that Armour was also responsible for some of the losses. IFA submits on this appeal that the judge should have held that the NCC did operate to limit IFA's liability when any other contractor (including Armour) was responsible for some of the loss, and that we should remit the case back to the TCC to assess the amount that it is reasonable for IFA to pay under the NCC. The Wests say that the judge was right, but even if he was not, that the NCC cannot operate to exclude the principle of joint and several liability. They go on to submit that, if the NCC were to have that effect, it should be held to be unenforceable because it fell foul of (a) the requirement of good faith in regulation 5(1) of the Unfair Terms in Consumer Contracts Regulations 1999 (the "UTCC Regulations"); and (b) the requirement of reasonableness in sections 2, 3 and 11 and Schedule 2 of the Unfair Contract Terms Act 1977 ("UCTA").
6. The remaining two issues concern:-

i) the rate of interest that the judge determined to be applicable to the award of damages for the Wests' actual expenditure: the judge allowed a rate of 7% per annum over base rate; IFA contends that it should have been 3% per annum over base rate; and

ii) whether the judge was right to award the Wests and their infant son, Jacob, damages for distress and inconvenience amounting to £14,000 in total.

Background facts

7. In June 2005, the Wests purchased the Property for £1.7 million.
8. On 11^th February 2006, IFA sent the Wests a draft appointment agreement for signature with at least two differences to the Agreement ultimately signed: first it provided for an indemnity insurance and liability limit of £500,000 instead of £1 million in the final version, and secondly, it provided for one, instead of two, weekly site visits by Mr Finlay.
9. Some time on or after 11^th February 2006, the Wests entered into the written Agreement with IFA whereby IFA agreed to render "Normal Architectural Service as per RIBA Conditions" as amended by the Agreement to the Wests in relation to the alteration and refurbishment of the Property. The Agreement included the NCC. The intended works to the Property included lowering the lower ground floor and replacement of the plumbing, mechanical services and electrics ("M&E"). At various stages, the Wests engaged certain specialist contractors including GlasSpace to design, supply and install a "glass box" conservatory, Ardern Hodges to supply and install wooden floors, Spiral Stairs to supply and install a staircase, and Pedini to supply and install the kitchen.
10. In mid-March 2006, IFA put the main contract out to tender. When the 4 tenders were received at a higher level than the Wests wanted, IFA suggested that the tender documents should be sent for the first time to Armour. Armour's tender of some £370,000 was received in May 2006. It was later reduced to some £260,000 by deletion of various items.
11. On 19^th June 2006, Armour took possession of the Property as main contractor to start the works with a 26-week programme. 11 months later, in May 2007, the Wests moved in to the Property, when the works were completed.
12. The Wests had been there just a month, in June 2007, when the lower ground floor of the Property was found to be affected by serious damp, and it was apparent that the remedial works would probably require the removal of the new kitchen.
13. On 8^th/9^th October 2007, the Wests moved out of the Property into alternative rented accommodation in Deodar Road. The judge found that they behaved entirely reasonably in doing so.
14. After significant debate about the damp proofing works that were required to the Property, and the discovery of serious defects to the M&E works and the floor slabs, there continued to be serious delays in agreeing a contract for the remedial works. Ultimately, the floor slabs were replaced in June 2008, and the remaining works began in about October 2008.
15. Between December 2007 and May 2009, the remedial costs were invoiced to the Wests. In June 2009, the Wests moved back in to the Property, upon completion of the remedial works.
16. On 29^th April 2010, a compulsory winding up order was made in respect of Armour.
17. On 23^rd September 2011, the Claim Form was issued. After a trial between 19^th and 29^th November 2012, the judge handed down judgment on 16^th April 2013. The judge's order was dated 4^th June 2013 and reflected an agreed amount of damages and interest on the basis of the judgment. The judge held that IFA was in breach of its professional duties in respect of the damp and the need to remove and replace all the M&E works. He also held that the losses were caused to some extent by Armour's breach of contract.

The judge's reasoning on the meaning of the NCC

18. The judge dealt with the NCC between paragraphs 195 and 205 of his judgment. His reasoning may be summarised as follows:-

i) He said that the NCC should be construed in the context that, by the date of the Agreement, it was understood that the Wests would themselves procure several aspects of the work, which would not form part of the main building contract.

ii) There was doubt as to the true meaning of the NCC: the words "other consultants, contractors and specialists appointed by you" could either mean (a) everyone with whom the Wests entered into a contract in relation to the project apart from IFA, or (b) the various specialist contractors or suppliers with whom the Wests were proposing to enter into direct contracts outside the main building contract, which IFA was expected to administer.

iii) Since there was doubt as to the meaning of a written term in the Agreement, regulation 7(2) of the UTCC Regulations required the court to give the NCC the interpretation that was most favourable to the Wests, which was the second meaning above.

iv) It was not, therefore, necessary for the judge to decide the true meaning of the NCC, but if he had to do so he would have decided that, in the context of the factual background, it bore the second meaning which was "what I consider the parties thought it meant", namely that it did not limit IFA's liability where the other party liable was Armour.

v) The judge derived what he thought the parties thought the NCC meant from:-

a) Mr West's letter to IFA 6 months after the Agreement on 10^th August 2006 referring to the agreement that key aspects would be undertaken by separate contractors, and saying that the NCC meant that one such contractor, GlasSpace, provided their own warranty: "and we are simply asking you as project manager and "independent arbiter" to confirm when the work has been completed & we should release the 5% retainer to GlasSpace".

b) The fact that Mr Finlay had written "Yes Agreed" against the first statement in Mr West's letter, and "Fine Understand" against the second.

vi) For unfairness to be established under regulation 5(1) of the UTCC Regulations, the NCC would have to be cumulatively (a) contrary to the requirements of good faith, and (b) a clause which causes a significant imbalance in the parties' rights and obligations arising under the Agreement to the detriment of the Wests. He referred to Lord Bingham's speech at page 491 in Director General of Fair Trading v. First National Bank plc [2002] 1 AC 481 (the "First National" case).

vii) The judge concluded that Mr Finlay was not guilty of any lack of good faith in the sense described by Lord Bingham. Though the NCC was not recommended by RIBA, it was at least consistent with a form of wording that was.

The judge's reasoning on interest

19. On this aspect, the judge accepted Mr West's evidence that the cost of his borrowing to fund the remedial works was at a rate of approximately 8% per annum, and awarded interest at 7% over base, rejecting IFA's submission that 3% over base rate was an appropriate rate on the ground that it "would not begin to compensate the Wests for the cost of their borrowing and being kept out of their money".

The judge's reasoning on inconvenience, distress and discomfort

20. The judge relied first on the judgment of Akenhead J in AXA Insurance UK plc v. Cunningham Lindsay UK [2007] EWCA 3023 (TCC) (the "AXA Insurance" case) who had said that in 2007 damages for inconvenience, distress and discomfort caused by breaches of contract would generally not exceed £2,500 per person per annum. He reminded himself that he should be astute not to award damages for the stress and vexation of litigation.
21. The judge then said that the period in question was a "little under two years: from about July 2007, just after the damp appeared, to June 2009 after the Wests moved back in to [the Property]". He thought that Mrs West, as the mother of small children, was more affected by the dislocation, and awarded her £7,000, Mr West £5,000 and Jacob £2,000.

The proper meaning of the NCC

22. IFA submits that the judge made two errors in construing the NCC:-

i) First, he failed to adopt the ordinary and natural meaning of the words when there was no relevant background that was repugnant to that meaning; and

ii) Secondly, he wrongly relied on the parties' post-contractual expressions of subjective intent in the August 2006 documents in order to construe the NCC.

23. In relation to the factual matrix upon which the judge relied, IFA contends that Armour was not even introduced as a tenderer until some months after the Agreement was concluded, so the parties cannot be taken to have intended the NCC to mean something that specifically excluded Armour from its ambit.
24. On the other hand, the Wests contend that the judge's critically important finding of fact was that, at the time of the Agreement: "it was already understood that several aspects of the work would be procured directly by the Wests and would not form part of the main building contract", which was why he held that the phrase "other consultants, contractors and specialists appointed by you" meant "any contractor other than the main contractor whose contract IFA would be expected to administer".
25. There was some debate in argument as to whether the word "other" in the NCC should be taken to qualify the words "consultants" or each of the words "consultants, contractors and specialists". Ultimately, there was common ground that "other" qualifies all three words, and we agree.
26. IFA placed some reliance on the standard form RIBA conditions incorporated into the Agreement, and in particular, on:-

i) Condition 13, which provided that IFA did not warrant results or outcomes beyond its control including the solvency of "any other body appointed by the Client whether or not such appointment was made on the advice of [IFA]";

ii) Condition 16, which provided that the Wests should "appoint and pay any consultants and other persons as may be required under separate agreements"; and

iii) Condition 17, which required the Wests "in respect of any work or services in connection with the Project performed … by any person other than [IFA]" to "hold such persons responsible for the competence and performance of his services".

27. Ms Patricia Robertson QC, counsel for IFA, argued that these clauses demonstrated that the Wests were responsible for paying and suing all other contractors, including the main contractor, and that the NCC could not, therefore, be taken to exclude Armour. Indeed, Condition 13 made it explicit that the Wests carried the insolvency risk.
28. Both sides relied upon the words "appointed by you" at the end of the NCC. Ms Robertson said that they should be given their normal meaning: Armour was a contractor appointed by the Wests, as were all the other persons the Wests contracted with. Mr Adrian Williamson QC, leading counsel for the Wests, submitted that, whilst Armour was formally appointed by the Wests, that appointment was in practice recommended, managed and implemented by IFA.
29. In our judgment, the key question in considering the judge's reasoning as to the construction of the NCC is the context upon which he (and the Wests) placed such reliance. The judge held that the parties' knowledge that the Wests would instruct a number of specialist contractors directly meant that the parties should be taken to have intended the words referring to the persons to be "appointed by [the Wests]" to refer only to those persons appointed directly by the Wests, and not to the main contractor who would be appointed by the Wests through the agency of the architect. We have no doubt that this placed too much reliance on this aspect of the contextual background.
30. The first consideration in any construction exercise is to consider the normal meaning of the words. Here, the normal meaning of the words is crystal clear. We do not accept that there is any ambiguity. The NCC is saying that IFA's "liability for loss or damage" was to be limited to the amount that it was reasonable for it to pay having regard to "the contractual responsibilities of other consultants, contractors and specialists appointed by [the Wests]". There was no limitation on the words "other consultants, contractors and specialists appointed by [the Wests]", and they must be taken to mean any such persons, including any main contractor ultimately appointed, but of course excepting IFA itself (because of the use of the word "other"). The fact that IFA is a consultant and not really a contractor makes no difference to this analysis.
31. We do not, therefore, think that the judge's construction of the NCC was an available meaning. We accept, of course, that Lord Hoffmann said in Investors Compensation Scheme Ltd v. West Bromwich Building Society [1998] 1 WLR 896 at page 913C that "[t]he background may not merely enable the reasonable man to choose between the possible meaning of words which are ambiguous but even (as occasionally happens in ordinary life) to conclude that the parties must, for whatever reasons, have used the wrong words or syntax". But we do not think that the background here is sufficiently compelling and obvious that it requires the conclusion that the parties used the wrong words. There is no suggestion that IFA's construction flouts business commonsense in the manner suggested by Lord Diplock in Antaios Compania Naviera S.A. v. Salen Rederierna A.B. [1985] A.C. 191 at page 201.
32. In these circumstances, we also do not agree with the judge that the NCC is ambiguous. The NCC has a clear meaning and the relevant factual matrix does not lead us to the conclusion that the parties should be taken to have used the wrong language to express their agreement. There was, therefore, no need for the judge to resort to the provisions of regulation 7(2) of the UTCC Regulations to the effect that "[i]f there is doubt about the meaning of a written term, the interpretation which is most favourable to the consumer shall prevail". It seems to us that IFA was right to direct the court to the useful dictum of Auld LJ at paragraph 13 of his judgment in Mc Geown v. Direct Travel Insurance [2004] 1 All ER (Comm) 609 (with which Mummery and Keene LJJ agreed) saying that "a court should be wary of starting its analysis by finding an ambiguity by reference to the words in question looked at on their own. And it should not, in any event, on such a finding, move straight to the contra proferentem rule, without first looking at the context …". This, as it seems to us applies as much to the application of regulation 7(2) as it does to the non-statutory contra proferentem rule.
33. We should mention briefly the second ground of appeal under this head, which complained that the judge fell into error by relying upon the August 2006 documentation and Mr Finlay's annotations on it as supporting his construction. In our view, these documents did not clearly support one or other construction of the NCC, though they did show that the Wests were well aware of the existence of the NCC. Plainly the post-contractual conduct of the parties cannot be used to construe the contract, but that was not, we think, what the judge was seeking to do. Either way, these documents do not assist, in our judgment, in the construction exercise.
34. Our conclusion on the construction of the NCC means that we must go on to consider the questions of unfairness under regulation 5 of the UTCC Regulations and reasonableness under UCTA raised by the Wests' Respondents' Notice.

Regulation 5 of the UTCC Regulations

35. The UTCC Regulations were made in order to implement Council Directive 93/13/ECC of 5 April 1993 on unfair terms in consumer contracts (the "Directive"). Though the terms of the UTCC Regulations are not identical to the terms of the Directive, it has not been suggested that there are any differences that are material to the issues we have to consider. It is useful to record, however, as Lord Steyn said in the First National case at paragraph 31, that the Directive is the dominant text, and, as Lord Bingham said in the same case at paragraph 8, that the Regulations should be construed so as to give effect to the Directive.
36. Regulations 5 to 8 of the UTCC Regulations provide, so far as relevant, as follows:-

"5(1) A contractual term which has not been individually negotiated shall be regarded as unfair if, contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer.

(2) A term shall always be regarded as not having been individually negotiated where it has been drafted in advance and the consumer has therefore not been able to influence the substance of the term. …

(5) Schedule 2 to these Regulations contains an indicative and non-exhaustive list of the terms which may be regarded as unfair.

6(1) Without prejudice to regulation 12 [concerning injunctions], the unfairness of a contractual term shall be assessed, taking into account the nature of the goods or services for which the contract was concluded and by referring, at the time of conclusion of the contract, to all the circumstances attending the conclusion of the contract and to all the other terms of the contract or of another contract on which it is dependent. …

7(1) A seller or supplier shall ensure that any written term of a contract is expressed in plain intelligible language. …

8(1) An unfair term in a contract concluded with a consumer by a seller or supplier shall not be binding on the consumer. …"

37. Schedule 2 to the UTCC Regulations provides an "indicative and non-exhaustive list of terms which may be regarded as unfair". Paragraph 1 of that schedule lists "[t]erms which have the object or effect of":-

"(b) inappropriately excluding or limiting the legal rights of the consumer vis-à-vis the seller or supplier or another party in the event of total or partial non-performance or inadequate performance by the seller or supplier of any of the contractual obligations …

(q) excluding or hindering the consumer's right to take legal action or exercise any other legal remedy, particularly by requiring the consumer to take disputes exclusively to arbitration not covered by legal provisions, unduly restricting the evidence available to him or imposing on him a burden of proof which, according to the applicable law, should lie with another party to the contract."

38. The Wests submit that the judge was wrong to find a lack of unfairness on the basis that there was no lack of good faith for the following main reasons:-

i) The judge wrongly equated lack of good faith with bad faith, and failed to have regard to all relevant matters under regulations 5 and 6 of the UTCC Regulations.

ii) The NCC abrogates the principle of joint and several liability, places the risk of Armour's insolvency on the Wests, and is especially disadvantageous taken together with the arbitration provisions. Those adverse consequences were not obvious from the NCC itself and the Agreement, and were never drawn to the Wests' attention as the RIBA recommends (see Picardi v. Cuniberti [2003] BLR 487 per HHJ Toulmin QC at paragraph 126).

iii) The NCC is a clause of the type mentioned in paragraphs (b) and (q) of the grey list in schedule 2 to the UTCC Regulations, in that it inappropriately limits liability, and requires the Wests to sue other parties to obtain full recompense.

iv) The NCC causes a significant imbalance in the parties' rights and obligations arising under the Agreement to the detriment of the Wests. This is because, where IFA and the contractor are liable in law for the same loss, IFA may escape responsibility for a significant proportion of that loss making it disadvantageous for the Wests to sue IFA at all, and shifting the risk of others' insolvency from IFA to the Wests.

39. IFA accepted in oral argument that there were no material circumstances in which the NCC could operate for the benefit of the Wests. It also accepted that the NCC was not individually negotiated under regulations 5 (1) and (2) of the UTCC Regulations. We would accept that latter concession without feeling the need to comment upon whether it was correctly made in the circumstances of this case. IFA then submitted that the reasoning of the judge was correct and that the NCC did not cause a significant imbalance in the parties' rights and obligations arising under the Agreement to the detriment of the Wests, contrary to the requirements of good faith, because:-

i) The Wests' appointment of others and the fact of those others' insolvency caused the detriment, and both were outside IFA's control.

ii) It is fair and reasonable that the Wests should assume that risk of a third party insolvency, because (a) they, unlike IFA, had the ability to control the contracting process and assess the solvency and insurance position of other contractors, and (b) the NCC redressed an imbalance favouring the Wests.

iii) The Wests were sophisticated and intelligent, whilst IFA was a one man band of modest means. It is likely that the Wests read and understood the NCC, which was clearly and openly presented to them. On no basis could it be said that IFA took advantage of the Wests.

iv) NCCs are common in both commercial and consumer contracts, are contained in RIBA standard forms, and are not so onerous or unusual as to need to be brought specifically to the Wests' attention (see Langstane Housing Assocation Ltd v. Riverside Construction (Aberdeen) Ltd [2009] CSOH 52 at paragraph 46 per Lord Glennie).

The First National case

40. The leading authority on the meaning of regulation 5 of the UTCC Regulations is the First National case. It is important to understand the factual context of that case. There, the Director General of Fair Trading was alleging that a term in a common form loan agreement was unfair under the UTCC Regulations. The term in question required the borrower to continue to pay interest at the default rate until any judgment obtained by the bank was discharged, thus depriving the borrower of the advantages afforded by articles 2(3)(a) and 3 of the County Courts (Interest on Judgment Debts) Order 1991 that excluded regulated agreements under the Consumer Credit Act 1974 from the imposition of interest on a judgment debt.
41. Lord Bingham of Cornhill (with whom the rest of the Committee agreed) explained at paragraph 8 of his speech that "[t]he object of the Regulations [then, the Unfair Terms in Consumer Contracts Regulations 1994] and the Directive is to protect consumers against the inclusion of unfair and prejudicial terms in standard-form contracts into which they enter". He then began his consideration of what was then regulation 4(1) of the 1994 Regulations (now regulation 5(1) of the UTCC Regulations) by remarking that the objective of the Directive was partially to harmonise the law in this important field amongst all member states of the EU, and that it lays down a test to be applied whatever the pre-existing law of the member state in question. He said that the relevant language of the regulations was clear and not reasonably capable of differing interpretations. Lord Bingham then defined the statutory test as being that: "[a] term falling within the scope of the Regulations is unfair if it causes a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer in a manner or to an extent which is contrary to the requirement of good faith". He continued as follows in relation to the significant imbalance at paragraph 17 of his speech:-

"The requirement of significant imbalance is met if a term is so weighted in favour of the supplier as to tilt the parties' rights and obligations under the contract significantly in his favour. This may be by the granting to the supplier of a beneficial option or discretion or power, or by the imposing on the consumer of a disadvantageous burden or risk or duty. The illustrative terms set out in Schedule 3 to the Regulations [now schedule 2 to the UTCC Regulations] provide very good examples of terms which may be regarded as unfair; whether a given term is or is not to be so regarded depends on whether it causes a significant imbalance in the parties' rights and obligations under the contract. This involves looking at the contract as a whole. But the imbalance must be to the detriment of the consumer; a significant imbalance to the detriment of the supplier, assumed to be the stronger party, is not a mischief which the Regulations seek to address".

Lord Bingham then continued in relation to the meaning of good faith as follows:

"The requirement of good faith in this context is one of fair and open dealing. Openness requires that the terms should be expressed fully, clearly and legibly, containing no concealed pitfalls or traps. Appropriate prominence should be given to terms which might operate disadvantageously to the customer. Fair dealing requires that a supplier should not, whether deliberately or unconsciously, take advantage of the consumer's necessity, indigence, lack of experience, unfamiliarity with the subject matter of the contract, weak bargaining position or any other factor listed in or analogous to those listed in Schedule 2 to the Regulations. Good faith in this context is not an artificial or technical concept; nor, since Lord Mansfield was its champion, is it a concept wholly unfamiliar to British lawyers. It looks to good standards of commercial morality and practice."

Lord Bingham concluded this passage by commenting on the method by which the test should be applied as follows:-

"Regulation 4(1) lays down a composite test, covering both the making and the substance of the contract, and must be applied bearing clearly in mind the objective which the Regulations are designed to promote."

42. Lord Hope of Craighead placed reliance on the 16^th recital to the Directive which provided that an assessment of the unfair character of terms should be supplemented by "an overall evaluation of the different interests involved". The recital continues by saying that, in making an assessment of good faith, "particular regard shall be had to the strength of bargaining position of the parties, whether the consumer had an inducement to agree to the term and whether the goods or services were sold or supplied to the special order of the consumer; whereas the requirement of good faith may be satisfied by the seller or supplier where he deals fairly and equitably with the other party whose legitimate interests he has to take into account".
43. Lord Millett said at paragraph 54 that it was "obviously useful to assess the impact of an impugned term on the parties' rights and obligations by comparing the effect of the contract with the term and the effect it would have without it", and also to consider whether if the term were drawn to the attention of the consumer, he would be likely to be surprised by it, whether it was a standard term in both non-negotiable consumer contracts and freely negotiated commercial contracts, and whether in those latter cases, the commercial party or his lawyer might reasonably be expected to "object to its inclusion and press for its deletion".
44. On the facts, Lord Bingham (at paragraph 24) thought that the difficulties derived from the absence of procedural safeguards at the stage of default rather than the unfairness of the term, and Lord Steyn held (at paragraph 38) that the disadvantage to the consumer was the consequence of the 1991 Order, rather than the term disapplying it. In this case, of course, it could not be said that the rule of joint and several liability caused the disadvantage; the term itself must, at least in one sense, do so; but that is a point to which we will return. Lord Millett applied his own test at paragraph 56 to conclude that no lawyer advising a commercial borrower would dream of objecting to such a term. The House, therefore, unanimously overruled the Court of Appeal's (also unanimous) finding that the term was unfair.
45. It is also clear from the 15^th and 16^th recitals to the Directive, as Chitty on Contracts (31^st edition 2012) says at paragraph 15-074, that "the function of the requirement of good faith is to ensure that all possible relevant considerations may be taken into account in making the overall assessment of the fairness of a term".
46. In evaluating the application of regulation 5(1) of the UTCC Regulations, it is necessary to consider significant imbalance and good faith separately as well as together in making the ultimate overall assessment. As Lord Steyn pointed out at paragraph 36 of his speech in First National the element of detriment to the consumer may not add much save to emphasise that the Directive is aimed at significant imbalance against the consumer. Whilst acknowledging the twin requirements of regulation 5(1) in paragraph 204 of his judgment, the judge thereafter seems to have concentrated in paragraph 205 on good faith. On his construction of the NCC, of course, the point was anyway academic.
47. We have considered the meaning of "significant" in the term "significant imbalance", and it seems to us that it could be argued that it carries qualitative as well as quantitative connotations. If it were to do so, it could be that the question whether a term creating an imbalance creates a "significant" imbalance might turn in part on the exercise of good faith. For the purposes of this case, we do not think it is necessary to decide this question and, having heard no argument on the point, we prefer to express no concluded view. We note, however, that there has been quite significant academic debate as to the proper meaning of regulation 5(1).

The effect of the NCC if valid

48. Before considering the application of regulation 5(1), it is important to be clear as to the effect that the NCC would have if valid. We have already held that the NCC has a clear meaning namely that IFA's "liability for loss or damage" was to be limited to the amount that it was reasonable for it to pay having regard to "the contractual responsibilities of other consultants, contractors and specialists appointed by [the Wests]". The amount that it would be reasonable for IFA to pay should, in our judgment, be approached by the court in the same way as an evaluation of contribution under section 2(1) of the Civil Liability (Contribution) Act 1978 (the "1978 Act"). Section 2(1) provides that in proceedings for contribution between persons liable for the same damage, the amount recoverable shall be "such as may be found by the court to be just and equitable having regard to that person's responsibility for the damage in question". The similarity in the wording between section 2(1) and the NCC leads us to the conclusion that the task of identifying what it was "reasonable" for IFA to pay under the NCC is much the same as the task under the 1978 Act of identifying what it would be "just and equitable" for IFA to pay. This exercise does not, of course, take into account the financial ability of the persons from whom contribution might theoretically be claimed to satisfy any claim against them.

Significant imbalance

49. Having ascertained the meaning of the NCC, it is logical to ask first whether it causes a significant imbalance. In other words, it is necessary to consider whether the NCC was so weighted in favour of IFA as to tilt the parties' rights and obligations under the Agreement significantly in IFA's favour. We have no doubt that the NCC does, on its proper construction, grant IFA a beneficial limitation of liability and impose on the Wests a corresponding disadvantage. It also imposes on the Wests a disadvantageous risk, namely the risk, in the case of the joint and several liability of IFA and one or more other contractors, of the insolvency of those other contractors. The NCC also imposes an intermediate procedural disadvantage on the Wests, even in the absence of a contractor's insolvency, in that it forces the Wests to bring proceedings against any defaulting contractor who may be jointly and severally liable with IFA, and to await the outcome of any contribution proceedings before obtaining full satisfaction. Contrary to IFA's submissions, it is the NCC that creates the imbalance in the parties' rights under the contract to the detriment of the Wests, since it reduces IFA's liability in the event of it being jointly and severally liable with a contractor. It was argued that the reference to arbitration in the Agreement added another layer of disadvantage to the Wests. But in our judgment, the arbitration provision, found in the Agreement on the page just below the limitation of liability provision and the NCC, was ineffective, since it contained both an agreement to refer to arbitration and the undeleted words "(or legal proceedings and clause 39 [relating to arbitration] will not apply" (emphasis added).
50. Counsel for the Wests relied on the grey list provisions in schedule 2 to the UTCC Regulations as being relevant to the consideration of significant imbalance. In our judgment, however, neither of the two sub-paragraphs specifically relied upon is directly applicable here. Paragraph 1(b) refers to an "inappropriate" exclusion or limitation of liability in the event of inadequate performance. That rather begs the question, since the argument here is as to whether the exclusion was inappropriate, since it only limits IFA's liability to what it is reasonably responsible for. Secondly, we do not think that the NCC excludes or hinders the Wests' right to sue.
51. It is necessary, as Lord Bingham said, to look at the Agreement as a whole, and as Lord Hope said to make an overall evaluation of the different interests involved. Regulation 6(1), of course, also mandates an holistic approach including a consideration, at the time of the conclusion of the Agreement, of all the circumstances attending the conclusion of the Agreement. At that time, no main contractor had been appointed, and the other suppliers were intended to be appointed by the Wests directly. A provision rendering IFA liable (as between itself and the Wests' own chosen contractors) only for losses which it can reasonably be held responsible, and which requires the Wests to take the insolvency risk of those chosen contractors would seem to be reasonable, and indeed to be expected.
52. The difficult issue concerns the risk attributable to the solvency of a main contractor that was not even within the parties' contemplation at the time of the Agreement, but was known to be likely to be suggested by IFA and to be managed by IFA. In this regard, IFA can legitimately contend, as it has, that the Wests had ultimately to decide on the identity of the main contractor and IFA could not – formally at least – gainsay their choice. But that does not seem to us to be a determinative factor. We also weigh in the balance here that NCC clauses – at least of a more formal nature – are by no means unusual, and applying Lord Millett's test in First National, we doubt whether any lawyer advising a commercial party to a building contract would be likely to object to such a term or "press for its deletion". Rather they would look to protect their interests by insurance or the taking of a performance bond from the main contractor in question. But in this situation, of course, it is to be remembered that it is common practice for an architect to protect his position by insurance, but uncommon for a consumer client to obtain insolvency insurance protection or a performance bond from a contractor.
53. In considering significant imbalance, one also has to bear in mind conditions 13, 16 and 17, which provided that IFA did not warrant the solvency of others, that the Wests would appoint and pay other consultants, and that they should hold such contractors responsible for the competence and performance of their services.
54. Having sought to set out the most relevant competing factors in relation to the question of significant imbalance, we think it is best to move to a similar consideration in respect of the requirement of good faith, before drawing the threads together.

Good faith

55. Undoubtedly, the NCC was produced to the Wests fairly and openly and in reasonably large print on the third of three tailor-made pages of the Agreement. Mr West said in his witness statement that he and Mrs West did not go through the "small print" of the Agreement, that no particular clauses were brought to their attention and that "[a]ccordingly, we did not consider the [NCC] at this time and therefore did not appreciate its effect". He concludes that it was extremely doubtful whether they would have accepted it, presumably had they known about it. This evidence cannot necessarily be taken entirely at face value, since the judge decided that IFA was not guilty of any lack of good faith in the sense described by Lord Bingham, and that he was not "out to take advantage of the Wests". We think we should accord some importance to these findings of fact, albeit that they cannot be conclusive, since the judge did not actually address the significant imbalance question. It is undoubted that the judge had in mind, as we have, that Mr West's letter of 10^th August 2006, only a few months later, demonstrated at least some familiarity with the NCC by that date.
56. In addition, we think the judge can be taken from his description of the parties and from his judgment on the good faith issue not to have regarded the Wests as having been in a weak bargaining position. By implication, he seems also to have rejected the suggestion that the NCC contained "concealed pitfalls or traps". It is this point, however, that has given us some concern. It seems to us that the NCC is so framed in this particular case as not to alert the reader to what are suggested to be its more radical consequences. It is, of course, clearly located in the Agreement in a limitation of liability context, but it simply says that IFA's liability for loss will be limited "to the amount that it is reasonable for us to pay in relation to the contractual responsibilities" of others. The use of the word "reasonable" seems to us somewhat to distract the reader's attention away from its real consequence, which is of course to limit IFA's liability to the amount that it might – admittedly as a matter of reasonableness or anyway justice and equity – be ordered to pay on an apportionment of liability between parties jointly and severally liable under section 2(1) of the 1978 Act.
57. We are sure that the NCC was not intended by IFA (as the judge in effect found) to have been a concealed pitfall or trap, but the very accessibility of the ordinary language used does seem to us, to some extent, to have that effect. It is noteworthy that the more formal NCC in the RIBA's SFA/99 conditions of engagement, suggested by another architect that the Wests earlier considered using, is less easily open to the accusation that it has such a vice. In fact, however, neither clause expressly draws the reader's attention to the fact that it is shifting the insolvency risk of the other contractors from IFA to the client.
58. In our judgment, the failure to draw the Wests' attention to the NCC and its effect (as RIBA guidelines seem, we think sensibly, to suggest is at least good practice), and the particular formulation of the clause are factors that weigh in the balance against a finding that the inclusion of the NCC satisfies the requirement of good faith (see Picardi v. Cuniberti supra). Each case depends very much on its own facts, and here the openness of the presentation of the clause, IFA's fair dealing in relation to it, and the reasonable equality of bargaining power of the parties, are to be weighed in the balance in favour of a finding that the inclusion of the NCC satisfies the requirement of good faith. As to that latter point, we have little doubt that the Wests were well able to understand the NCC and its ramifications, had they taken the time to do so, and it may be recalled that the judge doubted whether Mr Finlay understood it, even though it was he who inserted it.

Is the NCC unfair?

59. It is necessary now to weigh all these countervailing factors together, taking account of the factors mentioned specifically in regulation 6(1). Starting with significant imbalance, plainly the NCC caused an imbalance, but we do not, consider that, viewed in isolation, that imbalance was significant for the following main reasons: (a) the prevalence of the usage of the NCC in standard RIBA forms, (b) the fact that the clause would be regarded as not unusual in a commercial contract, and (c) the fact that it was the Wests who in this case would be taking the final decision on the future choice of main contractor, very likely being alive (bearing in mind Mr West's banking background) to the fact that that contractor's financial stability was a matter of importance. We do not, therefore, conclude that the NCC is properly to be regarded in the circumstances of this case as so weighted in favour of IFA as to tilt the parties' rights and obligations under the contract significantly in IFA's favour. But even if we were wrong about that, we have no doubt that the NCC does not cause a significant imbalance in the parties' rights and obligations in a manner or to an extent which is contrary to the requirement of good faith.
60. The main factor on good faith seems to us to be the judge's finding, having seen and heard the evidence and applied the right test derived from Lord Bingham's speech in First National. The 'pitfall' in the NCC is a matter of less importance bearing in mind the savvy nature of the Wests as clients in this case. Notwithstanding that it would have been preferable if IFA had drawn the NCC to the Wests' specific attention, we do not think that that factor alone is enough to cause the NCC to fall foul of regulation 5(1) of the UTCC Regulations. The parties were, at the least, in an equal bargaining position, and taking all the necessary factors together, we regard the balance as lying firmly in favour of the NCC not being unfair.
61. We would, for these reasons, reject the contention that the NCC is not binding on the Wests under regulation 8(1) of the UTCC Regulations.

UCTA

62. In these circumstances, it is necessary to go on to consider the question of unreasonableness under the provisions of UCTA. The judge, of course, did not consider this question. We can say, however, at the outset that many of the factors that we have considered under the UTCC Regulations come into consideration again under the heading of those matters to which the court is to have regard in considering the application of the reasonableness test under sections 2, 3, and 11 and schedule 2 of UCTA.
63. Section 2(2) of UCTA provides that in relation to losses apart from death or personal injury: "a person cannot so exclude or restrict his liability for negligence except in so far as the term or notice satisfies the requirement of reasonableness". Negligence is defined by section 1(1)(a) of UCTA as including the breach of any contractual obligation to exercise reasonable skill in the performance of the contract. Section 3 of UCTA applies as between contracting parties where one of them deals as a consumer or on the other's written standard terms of business. In that situation, section 3(2) of UCTA provides that:-

"As against that party, the other cannot by reference to any contract term —

(a) when himself in breach of contract, exclude or restrict any liability of his in respect of the breach; …

except in so far as (in any of the cases mentioned above in this subsection) the contract term satisfies the requirement of reasonableness".

64. Section 11 of UCTA provides that "[i]n relation to a contract term, the requirement of reasonableness … is that the term shall have been a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made", and that "[i]n determining for the purposes of section 6 or 7 above whether a contract term satisfies the requirement of reasonableness, regard shall be had in particular to the matters specified in Schedule 2 to [UCTA]". Section 11(5) of UCTA provides that "[i]t is for those claiming that a contract term or notice satisfies the requirement of reasonableness to show that it does".
65. It is well established that, even though section 11 refers only to sections 6 and 7 of UCTA, the factors in Schedule 2 to UCTA are usually regarded as also relevant when considering reasonableness of a term under sections 2 and 3 (Stewart Gill Ltd. v. Horatio Meyer & Co Ltd [1992] QB 600 per Stuart-Smith LJ at page 608G).
66. The potentially relevant Schedule 2 factors in this case are as follows:-

"(a) the strength of the bargaining positions of the parties relative to each other, taking into account (among other things) alternative means by which the customer's requirements could have been met;

(b) whether the customer received an inducement to agree to the term, or in accepting it had an opportunity of entering into a similar contract with other persons, but without having to accept a similar term;

(c) whether the customer knew or ought reasonably to have known of the existence and extent of the term (having regard, among other things, to any custom of the trade and any previous course of dealing between the parties);

(d) where the term excludes or restricts any relevant liability if some condition is not complied with, whether it was reasonable at the time of the contract to expect that compliance with that condition would be practicable …".

67. The Wests relied, in relation to UCTA unreasonableness on very much the same factors as they did under the UTCC Regulations. Even acknowledging that it is for IFA to demonstrate the reasonableness of the NCC, the Schedule 2 factors do not, in our judgment, assist the Wests:-

i) The Wests were in an equal bargaining position with IFA, and though they received no inducement to agree to it, they could have re-negotiated the NCC, gone to another architect or even possibly protected themselves from the risk posed by the NCC by some other commercial route (insurance or a performance bond).

ii) The Wests undoubtedly ought reasonably to have known of the existence of the NCC, placed prominently as it was on the third page of the Agreement.

iii) Paragraph (d) of Schedule 2 to UCTA does not seem to us to be applicable here, since the NCC does not exclude or restrict any relevant liability if a condition, for example a time limit, is not complied with.

68. Taking these matters into account and also all the factors that we have evaluated in dealing with the UTCC Regulations, we have concluded that the NCC satisfied the requirement of reasonableness within the meaning of UCTA. It is, therefore, an effective limitation on IFA's liability.
69. Both parties filed supplemental written submissions some days after the hearing in relation to the adequacy of IFA's pleading of reasonableness. This was not a point raised at the oral hearing and not a point that could sensibly arise considering that the many factors affecting the fairness, and therefore, the reasonableness of the NCC were in issue both before the judge and before us. It would be quite unjust if the Wests were to be permitted to raise the question of whether a clause was unreasonable (which they did in paragraph 37 of their Reply), and then to prevent IFA from relying on the evidence before the judge to show that the clause was indeed reasonable.

The award of interest

70. Under this ground of appeal, IFA makes a series of complaints based upon the suggestion that, in accepting Mr West's evidence on interest, and then awarding the Wests a rate that reflected their actual cost of borrowing, he disregarded the accepted applicable principles. The interest that the judge awarded was payable on remedial costs that were invoiced between December 2007 and May 2009, and on accommodation costs presumably incurred between October 2007 and June 2009. Thus the period of interest concerned was between about October 2007 and the date of judgment in April 2013.
71. Mr West's factual evidence on interest may be briefly summarised as follows:-

i) The Wests had bought the Property with the benefit of a £1 million mortgage, which they intended to pay off from his Credit Suisse bonuses when the advantageous rate of about 5% per annum ended in June 2008.

ii) In about February 2008, the Wests had access to cash of just under £1 million, but they decided in the light of the problems with the Property to switch to a new mortgage in Swiss Francs rather than pay it off in June 2008. Because of the effect of the financial crisis on exchange rates, the effective rate of interest on this mortgage was just over 8%.

iii) Between June 2008 and March 2009 the standard variable mortgage rate, which would have applied to the West's original mortgage had they retained it, fell from 7.15% to 5.39% and then remained constant until October 2012.

iv) The Bank of England's published figures showed that interest rates for small (presumably unsecured) personal loans were above 8% for most of 2008-2012 and as high as 11% in late 2009.

72. The judge heard submissions on interest to the effect that personal loans available on the internet in late 2012 could cost as much as 10.95% per annum, but discounted mortgage rates were available at the same time for less than 3% per annum. The judge had expressed the view in argument that one had to pay 5 to 6% per annum to borrow money at the time, when deposit rates were 1.5% at the most.
73. It was common ground that base rates were as follows, and that the mean base interest rate between 6^th December 2007 and 17^th December 2012 was 1.42%:-

6.12.07 - 6.2.08	5.5%
7.2.08 - 9.4.08	5.25%
10.4.08 - 8.10.08	5%
9.10.08 - 5.11.08	4.5%
6.11.08 - 3.12.08	3%
4.12.08 - 7.1.09	2%
8.1.09 - 4.2.09	1.5%
5.2.09 - 4.3.09	1%
5.3.09 -	0.5%

74. Against this background, IFA submits that:-

i) The judge was wrong to take into account the exchange rate loss that the Wests suffered on their Swiss Franc mortgage.

ii) The judge should have distinguished between the Wests' individual circumstances and borrowing history, and those applicable to a general class of people of the same type. The circumstances applicable to the relevant class of people should have included: (a) whether the recipient is a net borrower or a net depositor, and (b) whether, if a borrower, the recipient is able to obtain a secured loan or only an unsecured loan.

iii) The judge should anyway have taken into account the deposit interest that the Wests would not otherwise have earned on the £1 million they had in cash.

iv) The 6% that the judge thought that persons of the Wests' type would have to pay should have been an absolute ceiling on the interest rate awarded.

v) The judge should have held that nobody of the Wests' type would have sought a personal loan rather than a mortgage loan to fund the remedial works.

75. The applicable legal principles have not been much in dispute before us. They can be summarised as follows:-

i) The rate of interest is in the discretion of the court;

ii) The purpose of an award of interest is fairly to compensate the recipient for being deprived of the money that he should have received;

iii) A broad brush approach is taken to determine what rate of interest is just and appropriate;

iv) The courts do not have regard to the rate at which a particular recipient of compensation might have borrowed funds;

v) The court will, however, consider the general characteristics of the recipient in order to decide whether to assess interest at a rate that is higher or lower than conventional.

(See Tate & Lyle Food and Distribution Ltd v. Greater London Council [1982] 1 WLR 149 per Forbes J at page 154; Jaura v. Ahmed [2002] EWCA Civ 210 per Rix LJ at paragraph 25 (with whom Potter and Mummery LJJ agreed), Fiona Trust & Holding Corporation v. Privalov [2011] EWHC 664 (Comm) per Andrew Smith J at paragraph 16; Attrill v. Dresdner Kleinwort Limited [2012] EWHC 1468 (QB) per Owen J at paragraph 2; Persimmon Homes (South Coast) Ltd v. Hall [2012] EWHC 2429 per Ramsay J at paragraphs 10-17).

76. It seems relatively clear that the judge did indeed take the Wests' own interest experience as his starting point for the award of interest. 7% over base was over 8% in total, which was roughly what the Wests actually incurred on their Swiss Franc mortgage taking into account exchange rate losses. We accept IFA's argument that this did not accord with the principles that we have recorded above.
77. It seems to us that the correct approach would have been to identify what private persons like the Wests might have been expected to pay to borrow the money. It was not appropriate to require credit for the Wests' £1 million in cash, because absent the repair works, they would have used that money to pay off their mortgage, and would thereby have saved the interest on the mortgage in its entirety, but would not have had an interest credit.
78. We do not agree that persons in the Wests' position are those who borrow at the cheapest possible secured rate by taking up occasional one-off internet offers. Such people have to borrow at normal commercial rates. They cannot necessarily be expected to charge their home or some other property to secure short term borrowing required pending the conclusion of litigation. Apart from anything else, they did not know how long the borrowing would last, and they had to draw down at unpredictable intervals as and when invoices required payment. That situation does not necessarily lend itself to a carefully planned mortgage for a fixed amount at the best available internet rates.
79. Accordingly, the judge ought to have been looking for an appropriate borrowing rate for persons in the Wests' position – the fact that Mr West happened to be a banker was as irrelevant as was his decision to take a Swiss Franc mortgage and the exchange control losses that the Wests sustained.
80. The judge was not provided with any evidence as to the rate of normal borrowing for solvent borrowers like the Wests, but he did tell the parties what his experience was and they do not seem to have contradicted him. Nonetheless it seems to us that it would have been unwise had he taken that anecdotal judicial knowledge into account.
81. Accordingly, the state of the evidence before the judge was somewhat unsatisfactory. He could have legitimately taken into account the evidence that between June 2008 and March 2009 the standard variable mortgage rate fell from 7.15% to 5.39% and then remained constant until October 2012, and that the Bank of England's published figures showed that interest rates for small personal loans were above 8% for most of 2008-2012 and as high as 11% in late 2009. Whilst a borrower in the Wests' position might well not have borrowed on mortgage for the reasons we have given, they might equally have done so. The only evidence of rates that borrowers like the Wests would have to have paid was somewhere between about 5.4% and 8% for most of the period. The judge was aware that lower rates were available albeit only on occasions on the internet.
82. Taking the average base rate as approaching 1.5%, it seems to us that the judge ought to have determined a rate of 4.5% per annum over base, rather than the rate of 7% over base that he did in fact fix. This would have given the Wests an average rate which would properly have reflected the legal principles that we have summarised above.

Damages for distress and inconvenience

83. It is common ground that the judge's award of damages for distress and inconvenience should (at least) be reduced from £14,000 to £10,500 because the judge based his award on 2 years disruption rather than 18 months disruption as he should have done.
84. IFA argues for a still further reduction on the basis that Akenhead J said in the AXA Insurance case at paragraph 275 that "[a]llowing for inflation up to the end of 2007, the maximum for this type of general damages would not generally exceed £2,500 per year" "in the absence of particular physical symptoms or illnesses caused by the breaches". IFA submits that, reducing the awards pro rata for the limited period of the damage, Mrs West still received £3,500 per annum, Mr West £2,500 per annum and Jacob £1,000 per annum, whilst the inflation adjusted maximum for the most serious case was only £2,950 per annum. IFA says that this cannot possibly be regarded as the most serious case since, during the period of disruption, the Wests spent most of their time living in a comfortable flat close to the Property which they had rented at £6,000 per month.
85. The evidence from the Wests dealt not only with the period of disruption for which they were to receive compensation after the damp was discovered in June 2007, but also with the period of the original works for which they were not to receive compensation. The judge rightly disregarded that evidence. The evidence of disruption for the relevant period was exiguous, but spoke of stress, being shell-shocked, and the loss of quality time with their new born children. The judge was also rightly astute to avoid awarding damages for the stress of litigation as opposed to the stress of the breaches of the Agreement.
86. In our judgment, the judge ought not to have awarded damages above the well-accepted maximum mentioned in the AXA Insurance case. Whilst the stress and anxiety caused to the Wests and particularly to Mrs West was undoubtedly significant, it was not at the very top end of the scale, let alone above it. A proper award on the evidence before the judge, based on an adjusted maximum of around £3,000 per annum, would have been at a rate of £2,000 per annum for Mrs West, £1,500 per annum for Mr West and £500 per annum for Jacob. The disruption to a baby must be regarded as being at a much lower level than for an older child or an adult. On this basis, the award of general damages should have totalled £6,000.

Disposal

87. In the above circumstances, we will allow the appeal on each of the three main grounds relied upon. We hold that the NCC was a valid and binding clause that ought to have been given effect by the judge. We reject Mr Williamson's submission that the NCC was not a net contribution clause at all. The judge ought, therefore, to have gone on to consider the amount that it was reasonable in all the circumstances for IFA to pay having regard to the contractual responsibilities of Armour. This will involve an evaluation of the proper apportionment of liability as between IFA and Armour that would have been made under the 1978 Act. It is common ground that this court cannot undertake that exercise and that the case should, therefore, be remitted to the judge to undertake that task. Ms Robertson sensibly accepted that, despite the judge's knowledge of certain Part 36 offers that had been made, it would be disproportionate to require the remission to be to some other judge without Edwards-Stuart J's wealth of knowledge about the evidence in this case. If any issues arise as to the precise terms of the remission, it is common ground that they should be dealt with after judgment.
88. As regards interest, we would substitute 4.5% per annum over base rate for 7% per annum over base rate in paragraph 2(1)(a) of the judge's order. It is common ground that the judge ought not to have awarded interest on the general damages before judgment, and that that part of the order should be appropriately varied.
89. So far as damages for inconvenience, distress and discomfort are concerned, we would reduce those damages from £14,000 to £6,000.