England and Wales High Court (Technology and Construction Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY & CONSTRUCTION COURT

		St. Dunstan's House Fetter Lane London. EC4
		27th June 2007

His Honour Judge Coulson QC:

A. INTRODUCTION

1. This is a relatively modest building defects dispute where the maximum sum claimed does not exceed £100,000. Merely because the sums at stake are not large by the standards of this court does not of course mean that the case is any the less important to the parties, or should be regarded in some way as inferior or second-class litigation. The TCC acknowledges the significance of such smaller cases to the parties involved, and endeavours to deal with them promptly and efficiently, as I hope the period of seven and a half months that has elapsed between the first case management conference and the handing down of judgment in this case amply demonstrates. Unfortunately, because of the tight margins and the parties' consequential lack of room for manoeuvre in cases of this type, they can have some inherently unsatisfactory features: events and conversations which happened years ago are suddenly freighted with enormous and unwarranted significance; an array of experts can be called who have failed to reach agreement on basic points, but who cannot grapple, or have not grappled, with the case being advanced by their opposite number; and years of stop/start inertia can occur before the commencement of the action itself with every brief flurry of activity followed by weeks or months of silence. All of these features were present in this case in a particularly acute form.
2. As a result of the issues as they have now become, I must give judgment on just a handful of disputed defects and more than five years' worth of allegations of delay, unreasonable conduct and failure to mitigate. What is more, I predict that, following the handing-down of this judgment, the parties will be back before me to argue about the costs which each will have incurred in fighting this case to the bitter end. I anticipate that those arguments will be as long and as acrimonious as anything that has gone before.
3. With that rather unpromising introduction the particular disputes between the parties can be simply recorded. By a contract dated 12^th December, 2001 the Claimants, Mrs. and Mrs. Iggleden, bought a new house from the Defendant, Fairview New Homes (Shooters Hill) Ltd. It is now known as 2 Cairns Mews, Oxley Gardens, Shooters Hill, London SE18 4JZ ("the property"). Clause 5 of the contract provided that the house would be built in good and workmanlike manner. A range of defects manifested themselves during 2002. Although some were corrected by the Defendant, others were not. Despite the fact that the vast majority of the outstanding defects were just about to be put right in January 2003, no remedial work of any kind has in fact been carried out, either then or subsequently. The Defendant now accepts liability for the vast majority of the defects alleged, and one of the principal debates centres on the scope of the work necessary to resolve those admitted defects.
4. Because of the allegations of unreasonable conduct, delay and failure to mitigate it is necessary for me to set out in some detail the significant events between 2001 and 2007. I do that in Section B below. At Section C below I analyse the alleged defects, the competing cases as to the scope of the appropriate remedial work, and identify the work which I consider to be required to remedy each defect. At Section D below I make a number of findings about mitigation, unreasonableness and delay. At Section E, in the light of my findings at Sections C and D, I set out my conclusions on each item of the damages claim. There is a brief reconciliation of the figures at Section F below.

B. FACTUAL BACKGROUND

5. The contract for sale was completed on 14^th December, 2001. On 8^th February, 2002 a snagging list was prepared as a result of the Defendant's after-sales inspection service. Amongst the items included in that list were: badly laid tarmac to the area outside the garage resulting in ponding; rainwater running into the garage where it became trapped; cupboard doors and drawers not properly level in the kitchen; and, in the same room, the breakfast bar not level. Following further inspections in early April 2002, the Defendant agreed to carry out the work identified in the snagging list. It appears that many of these snagging items were corrected, although there was a complaint by the Claimants about the damage caused to the property during this process.
6. On 17^th April, 2002 Mr. Iggleden wrote to two different directors of the Defendant company, raising a variety of different complaints. In his letter to the Defendant's Managing Director Mr. Iggleden warned that, even at this early stage, he was "quite prepared to put the matter in the hands of my solicitor should it become necessary". Thereafter, in their written responses, the Defendant largely accepted the validity of the criticisms made in Mr. Iggleden's letters of 17^th April, 2002. It appears that the principal matter of concern at that stage was the water ponding problem on the driveway and the consequential water ingress into the garage. On 2^nd May, 2002 the Defendant provided copies of their proposed remedial work in this area, which involved lowering the Aco drain that ran at right-angles across the entrance to the garage.
7. On 22^nd May, 2002 Mr. Iggleden wrote to the Defendant to inform them that the Claimants had instructed an independent surveyor, a Mr. Smith, who had produced an independent schedule of defects. That was enclosed with the letter. Mr. Iggleden did not agree to the proposals in respect of the Aco drain. On 6^th June, 2002 the Defendant wrote to Mr. Iggleden to inform him that they had, in turn, instructed their own surveyor, Mr. Bruce, in order that he might inspect the items raised by Mr. Smith, prepare a report, and then, to the extent that there were any items that were not agreed, they could be discussed in detail between Mr. Smith and Mr. Bruce.
8. Inspections took place in June, and on 12^th July, 2002 Mr. Bruce produced a report in respect of the matters raised by Mr. Smith. The report accepted some of the complaints which had been raised by Mr. Smith, but rejected others. Over the same period complaints were being raised directly by Mr. Iggleden with the Defendant and certain defects - such as the problems with some of the appliances in the kitchen - were resolved by the payment of a cheque from the Defendant to the Claimants. It appears that, at some point prior to 16^th July, 2002 Mr. Iggleden made a formal request to the NHBC for their resolution service, although at that stage it seems that the matters raised with the NHBC were of limited scope.
9. Despite the formal request for the resolution service the Claimants continued to write to the two different directors of the Defendant and in their letters of 29^th July, 2002 they raised a wide variety of complaints, some which had been raised before and some which were new. The letter to Mr. Emery, the Defendant's then Director of After Sales, enclosed a document prepared by the Claimants which compared the reports of Mr. Smith and Mr. Bruce. Amongst the agreed defects noted in that report was the fact that, in the kitchen, the "island unit top was out of level". As to the problems with the garage and the driveway, the comparison report made plain that the disagreement concerned the scope of the work to be carried out in those areas, rather than any statement by Mr. Bruce or the Defendant to the effect that there was no problem at all. At this stage it should also be noted that there was no suggestion in any of the documents emanating from the Claimants that the floors on either the first or the second floor of the property were out of level.
10. On 9^th August, 2002 the Defendant replied to the Claimants, noting that, at that point, there were several items not agreed by the respective surveyors. The letter contained an offer.

"In a genuine attempt to resolve this problem I suggest again that our two professionally qualified surveyors should meet to discuss in detail their respective reports and your comparison document. The purpose of the meeting would be to agree a final list of remedial works. I appreciate your comments in respect of the costs of your surveyor's fees. In this instance, as it is my suggestion, Fairview will meet your reasonable surveyor's fees.

The remedial works, when agreed, will be carried out promptly in a workmanlike manner. In an attempt to restore your confidence I suggest that your professional surveyor is employed to inspect the remedial works as they proceed. Fairview will be responsible for the payment of his reasonable fees.

Please be advised that it is not the intention to use the sub-contractor who carried out the earlier remedial works to your house."

11. In their reply of 13^th August, 2002 the Claimants rejected that offer. They stated,

"Having been in contact with both our solicitor and our surveyor we would advise that a discussion meeting between the two professionally qualified surveyors would be fruitless. We are not prepared to compromise on the repairs that we have requested and highlighted in our summary document but which, to date, Fairview have not yet agreed to carry out."

Two points should be noted. First, it is clear from this letter that, even at this early stage, the Claimants had had the benefit of legal advice. Secondly, the adoption of this expressly uncompromising stance by the Claimants was the subject of criticism by the Defendant at the trial, and it is said to be the first specific failure on the part of the Claimants to mitigate their loss. I deal with this contention in greater detail in Section D below.

12. On 21^st August, 2002 the NHBC formally informed the Claimants that the fifty-odd defects raised by the Claimants would be the subject of inspection, investigation and resolution by the NHBC. Mr. Gary Sharp was appointed by the NHBC to perform this service and a conciliation meeting took place on 29^th October. The NHBC resolution report itself was provided two days later on 31^st October. Of the fifty-one items dealt with in the report, Mr. Sharp found in the Claimants' favour in respect of forty-seven of them, although many of them were agreed by the Defendant anyway, and found only four items raised by the Claimants which, on his view, were unjustified. The items in the report which are of particular relevance to the matters which I now have to resolve are as follows:

(a) Item 24 - Kitchen Island Unit

The report found that the island unit worktop in the centre of the kitchen was out of level by in excess of 18mm. The report recommended that the Defendant carry out such works as were necessary to ensure that the island worktop in the kitchen was level. The Claimants had not raised - so the report did not address - any concerns at that point about the floor in the kitchen.

(b) Item 45 - Rainwater Ingress into Garage

The report found that the Aco drain had been installed above the floor line in the garage and that rain was coming down the garage door and flowing into the garage. It also found that sections of the tarmac drive had not been laid to an adequate fall and the drive was not free-draining. The report recommended that the Defendant carry out such works as were necessary for the effective drainage of surface water from both the garage floor and the tarmac drive surface.

(c) Item 51 - Second Floor Shower Room Not Level

Very late on in the NHBC resolution process, on 23^rd October, 2002, the Claimants raised for the first time the complaint that the en-suite shower room on the second floor had a side-to-side fall of 17mm over its width of 1.8 metres. This complaint was upheld by a finding in the report, which recommended that the Defendant carry out such works as were necessary to ensure that the floor level of the shower room was within reasonable tolerance.

13. The Defendant agreed to carry out the works recommended in the resolution report. On 18^th November, 2002 the Claimants informed the Defendant that they were concerned now about the out-of-level floor in the master bedroom at the rear of the second floor of the property. In their response of 25^th November the Defendant agreed that it would be prudent for the levels to be investigated with the carpets partially removed. The Defendant indicated that the remedial works for the defects as a whole could start on either 2^nd December or 2^nd/3^rd January, 2003. In the event, the parties agreed that the works would start on 18^th January, 2003.
14. The problems in the rear room on the second floor necessitated the removal of the shower installation, and the wardrobes and carpets in the master bedroom. It was also apparent that the Claimants would have to move out of the house whilst the works were carried out. The works were anticipated to take five weeks. On 16^th December, 2002 the Defendant sent a cheque to the Claimants of £2,150.27 in respect of the removal and storage charges of Pickfords. At the same time the Claimants were obtaining quotations for the removal, storage and re-fitting of the shower in the en-suite shower room and the fitted wardrobes in the rear bedroom, but they regarded the quotations that they had received at that point as excessive. In the end, the parties agreed that the sum of £4,000 would be paid by the Defendant to the Claimants direct in respect of this work.
15. As noted above, by early January 2003 both parties anticipated that the remedial works would be carried out by the Defendant, starting on 18^th January. Indeed, in a memo of 8^th January, 2003 the Defendant had prepared a schedule of the works to be performed. This echoed the NHBC resolution report. However, in certain instances, it was as vague as that resolution report. Thus, for example, when dealing with the out-of-level shower room on the second floor, the works were simply described as the "necessary remedial work to level floors". However, despite the potentially vague nature of the works that were to be carried out, other matters were expressly agreed, such as the apparent need for all the floor coverings, including carpets and laminated floors throughout the house, to be replaced at a cost of £6,630.50. This sum was also paid in full by the Defendant to the Claimants, despite the fact that, for example, there were no planned works to be carried out to the first floor and no works on the second floor to the front room. No carpets or laminated floors have in fact been replaced.
16. Just as the works were about to start, on 13^th January, 2003, the Claimants sent the Defendant a report from a Mr. Farrell in respect of the driveway and the garage. It appears that the Claimants had replaced Mr. Smith as their surveyor with Mr. Farrell. His two-page report took issue with the proposed works to the garage and driveway, despite the fact that those works had previously been agreed by Mr. Smith. Mr. Farrell's report required much more extensive work, including the complete re-laying of the driveway to new falls. There was a meeting at the property on 17^th January, 2003 to discuss this development. It appears from the short minutes of that meeting that Mr. Farrell insisted that the Defendant agree to his new proposals. The Claimants refused to allow the Defendant to carry out their proposed works to see if they would deal with the ponding/water ingress problems. The minutes record that an impasse was reached. The Defendant suggested that the NHBC should arbitrate on the question of the garage and driveway, but Mr. Farrell did not agree to this suggestion. The Defendant now complains that the conduct of Mr. Farrell and the Claimants at this meeting amounted again to unreasonable conduct and/or a failure to mitigate. I deal with that point in greater detail in Section D below.
17. Mr. Farrell's report also addressed the first and second floors, although he too was unable to be specific as to what remedial works might be necessary in these locations. He said

"First and Second Floors

These are of suspended timber construction which I understand are covered with tongued and grooved chipboard but I am not able to confirm this due to fitted carpets. It is evident that the top floor is out of level to the front room and bathroom, but both floors are springy and this is probably the reason for 'popped' ceiling fixing nails noted in the property and in correspondence. Until the floorboarding is taken up, it is impossible to state or even speculate upon the cause, and therefore the remedial work necessary.

I would suggest that the whole of the floorboarding be lifted and a detailed site inspection be carried out to determine the cause of the defect and to specify the remedial work that will be required."

18. On 28^th January, 2003 there was a first letter from the Claimants' solicitors to the Defendant. Although that letter dealt principally with the garage driveway issue, in its last paragraph it took up Mr. Farrell's point about the need for an inspection of the master bedroom on the second floor. As previously noted, everyone was clear that an investigation had to be carried out. The letter from the Claimants' solicitors confirmed that the problem could be identified once the rear room had been vacated, rather than there being any need on the part of the Claimants to vacate the property altogether. Unfortunately, thereafter, matters deteriorated further because on 25^th February, 2003 the Claimants' solicitors wrote again, this time enclosing a further inspection report produced by Mr. Farrell. This was a new report, and although it contained some old matters, it contained some new complaints which had not been raised before. For example, for the first time it was suggested that the kitchen floor was out of level. The letter from the Claimants' solicitors also concluded in uncompromising language.

"Unless you can agree to implement Mr. Farrell's proposals and agree to remedy the additional items disclosed in [Mr. Farrell's] schedule of defects without further delay, our clients will take the necessary action to bring a claim for breach of contract."

19. Thereafter there was a good deal of correspondence concerning the garage driveway and the arrangements for investigating the floor levels in the master bedroom at the rear of the second floor. The Claimants demanded a cheque for the £4,000 in respect of the removal of the shower and wardrobes, and, as their solicitor's letter of 14^th April, 2003 made plain, it was only on receipt of that cheque that they would then arrange for the removal and storage of the furniture in that room in order to facilitate the necessary inspection. Eventually, as I have said, this sum was paid, and the room was cleared out. In consequence, although they did not apparently inform the Defendant of this at the time, the Claimants used the rear room on the first floor as their bedroom and put the dining room furniture (which had been in that room) into storage.
20. It appears that no later than 9^th May, 2003, the Claimants had engaged another professional, this time a Mr. Griffith, to act as their engineer. We know this because he produced a report in May 2003 which referred to an inspection which he had undertaken on 9^th May 2003. For reasons which are unexplained, the Claimants did not inform the Defendant of their engagement of Mr. Griffith, or the fact that he had inspected the second floor, or the content of his findings on that inspection. Instead, on 4^th June, 2003 an inspection took place of the shower room and rear bedroom on the second floor, attended by the Defendant's representatives and Mr. Bruce, and the Claimants and Mr. Farrell. There was no reference to Mr. Griffith and no explanation offered as to why he was not there. It appears that at that inspection the Defendant and/or Mr. Bruce saw enough to persuade them that the floors in those two rooms were indeed defective.
21. On 5^th June, 2003 Mr. Bruce produced a report which largely consisted of what he described as a "complete schedule of agreed works". The last page of that document consisted of a separate "schedule of disputed works". This latter list included the second floor rear bedroom and en suite bathroom, the first floor rear room, the kitchen/diner flooring and associated kitchen unit levelling, and works affecting the driveway and garage. This document was sent by Mr. Bruce to Mr. Farrell under cover of a letter dated 6^th June, 2003 which asked Mr. Farrell if he would confirm his acceptance of the two schedules. Mr. Farrell did not reply. On 8^th July, 2003 Mr. Bruce chased him for a response, pointing out that the Defendant wanted "to proceed with all the agreed works without delay and therefore your response in respect of this schedule is urgently requested". The letter went on to propose remedial action in the kitchen and to the floor joists on the second floor. This latter scheme involved the levelling of the joists using firring timbers screw-fixed to the joists themselves.
22. On 21^st July, 2003 the Defendant's solicitors sent to the Claimants' solicitors a further report from Mr. Bruce. This dealt with the driveway drainage problems and contained a new proposal which involved the raising of the floor and driveway and the re-installation of the Aco drain at a higher level to suit. It also involved the provision of additional gulleys. Again, there was no response from either the Claimants or Mr. Farrell. On 18^th August, 2003 Mr. Bruce chased Mr. Farrell for responses on all of the outstanding matters, noting again that the Defendant was "extremely keen to implement these agreed words once confirmed and therefore your approval to the above as soon as possible would be greatly appreciated". On 21^st August, 2003 Mr. Farrell replied in these terms:

"There is no point in reaching agreement on the general defects in the house as these works cannot be carried out until all matters have been resolved. All works will be disruptive to my clients. So it is no use in the works being carried out on a 'piecemeal' basis.

The outstanding works to the flooring to the upper floors, the kitchen floor, the garage and the rear soffit board have to be resolved, and once this is achieved, the question of carrying out the works can be discussed."

23. The Defendant submits now that the failure of the Claimants and Mr. Farrell to grapple with the detailed proposals that they had made (through Mr Bruce) and their failure to offer their own proposals at this stage was unreasonable and amounted again to a failure to mitigate. That is an argument I address in greater detail in Section D below.
24. It was not until 22^nd October, 2003 that the Defendant received any sort of detailed information or proposals from the Claimants. They came by way of a letter from the Claimants' solicitors. The letter was not a response to the proposals put forward some months earlier by Mr. Bruce. Instead, the letter referred to a whole series of items, many of which had long-since been agreed, but also raised a question mark over the floors at first floor level. The letter accepted that both the first and second floors would have to be the subject of further detailed investigation. The letter enclosed a total of six reports. They were:

(a) The two-page report from Mr. Farrell of 12^th January, 2003, which had already been seen by the Defendant;

(b) A report from Mr. Farrell of July 2003, which had not been provided before;

(c) A report from Mr. Farrell dated 19^th August, 2003, which had not been provided before;

(d) A report from TRADA as to the condition of the joists, which had not been provided before;

(e) A report from Mr Griffith of May 2003, provided in July 2003, which had not been provided before;

(f) A report form Mr. Griffith dated August 2003, which had also not been provided before.

The letter said that the time for the inspection of the first and second floors would have to be agreed and then strictly adhered to. It went on to say:

"Our clients are only prepared to allow access on one occasion at a time to be agreed between the parties. This will not be varied, and we suggest that you ensure that the relevant people attend at this time."

25. The documents that were sent out with this letter were incomplete, as the subsequent correspondence between the solicitors demonstrates. There was a period of about six weeks during which colour copies of some of the photographs referred to in the six reports were provided to the Defendant's solicitors. Notwithstanding that, it is important to note that, in his closing submissions on behalf of the Claimants, Mr. Coney argued that by the time of this letter, the Claimants' experts had essentially "got everything ready for a trial on the defects", except in relation to the allegations surrounding the first floor. He submitted that the Claimants' team had provided to the Defendant an "unanswerable case" as to the defects and the necessary remedial works. One of the matters which I will therefore have to consider is how it is that, if the Claimants' experts were ready for trial in October 2003, no remedial works were carried out and the proceedings themselves were not commenced for a further three years.
26. Unfortunately, the inspection of the first and second floors did not take place until 9^th January, 2004. The day before the inspection the Claimants' solicitors informed the Defendant's solicitors that due to difficulties in storing the Claimants' furniture only part of the floor on the first floor had been lifted. The letter stated that:

"It exposes the relevant parts that your clients will want to inspect."

That turned out to be erroneous. At the trial, everybody was agreed that, at the inspection in January 2004, insufficient parts of the first floor were available to allow a meaningful investigation into the allegations that the entirety of the floors on the first floor were out of level and therefore constituted a breach of contract.

27. The inspection was attended by the employees of the Defendant. Neither Mr. Bruce, nor any other independent engineer, attended on behalf of the Defendant. Following the inspection it appears that matters took off in an entirely different direction. Following an offer from the Defendant, which was said to be without prejudice and which I have not therefore been taken to, the Claimants' solicitors wrote to the Defendant on 22^nd March, 2004, making an open offer to the effect that the Defendant would buy back the property from the Claimants. The letter set out a mechanism by which the purchase price could be agreed. This mechanism was, almost inevitably, the subject of dispute. There was apparently a long period in which the Claimants' solicitors simply did not respond to the Defendant's solicitors' queries. In December 2004 the Claimants' solicitors informed the Defendant's solicitors that the Claimants had changed their minds and decided not to move from the property. This is said to be a further failure to mitigate on the part of the Claimants.
28. For the first five months of 2005, the Defendant's solicitors were chasing the Claimants' solicitors in order to progress the matter without success. It is now said that, wholly unknown to the Defendant's solicitors, the Claimants were pursuing with the TCC the possibility of appointing a Judge/Arbitrator, although, from the documents, it does not appear that the request was made until May 2005 and was dealt with promptly by the TCC on 31^st May. When a copy of the TCC's letter was provided to the Defendant's solicitors they expressed their surprise at this conduct, and made it plain that they did not consider that there was a binding arbitration agreement and/or that the appointment of a Judge/Arbitrator was appropriate. This position had been made plain by August 2005. However, despite some desultory correspondence no further progress of any kind was made until these proceedings were commenced in the late summer of 2006. It should also be noted that, despite the passage of time referred to above, the proceedings started without there having been a without prejudice meeting between the parties. The Defendant claims that that was in contravention of the TCC pre-action protocol.

C. THE DEFECTS AND THE NECESSARY REMEDIAL WORKS

C1 The Items in the NHBC Resolution Report

29. The NHBC resolution report has been referred to in paragraph 12 above. Leaving aside the subsequent disputes in respect of Items 24 (the kitchen), 45 (the garage driveway) and 51 (the second floor shower room), each of which are dealt with in greater detail below, the contents of that report were long ago accepted in full by the Defendant. The report identified a large number of matters which had to be rectified, and the report recommended that the Defendant carry out those necessary remedial works. Those were the works which the Defendant was poised to carry out in January 2003 when Mr. Farrell raised the question of the scope of the works to the garage driveway and the first and second floors. Extraordinarily, those works have still to be carried out.
30. The works in the resolution report have an agreed value of £20,335.93, including VAT.^[1] However it is the Defendant's case that, since the Defendant company was and remains willing and able to carry out these works in accordance with the NHBC's recommendation, and the Claimants have acted unreasonably in failing to allow the Defendant to carry out the works, no sum should be awarded by way of damages. That raises issues of both fact and principle and I deal with them at Sections D1 and D2 below.

C2 The Driveway and the Garage

31. The Defendant accepts that the driveway is defective because rainwater ponds there and, at least during windy conditions, the water blows into the garage. As we have seen, in late 2002 the Defendant accepted the recommendation at Item 45 of the NHBC resolution report that it carry out "such works as are necessary for the effective drainage of surface water from both the garage floor and the tarmac drive surface". In January 2003 the Defendant proposed to break out the bitmac surfacing and re-lay it to eliminate high/low points and to raise the screed of the garage floor. It was this work which was the subject of Mr. Farrell's initial intervention. He described the proposed work as a "mere hotch-potch" which would not be effective.
32. The essential differences between the parties on this item are, sadly, hardly changed since January 2003. Mr. Farrell's scheme itself remains the same. Its principal feature is the re-laying of the garage floor and the re-laying of the whole drive to a new fall which would ensure that the water flowed down the drive to the road and away from the garage. This work is valued at £5,522.50. Mr. Brewer (the Defendant's expert surveyor), on the other hand, recommends levelling the surface of the drive so that the depressions are eliminated, and then building a low ramp at the threshold of the garage beyond the Aco drain to prevent the ingress of water. These proposals are costed at an agreed figure of £1,710.40.
33. It seems to me that the two competing schemes are both solutions which have been recommended by experts and which could properly be carried out. I do not consider that Mr. Farrell's scheme is, of itself, excessive. I do not therefore consider that the principle in Ruxley -v- Forsyth [1996] AC 344 has any relevance to this head of claim, a position which, as I understood it, Mr. Letman accepted on behalf of the Defendant. Where there are two competing remedial schemes then, in my judgment, the court should have regard to the approach that was set out in characteristically crisp terms by His Honour Judge Hicks Q.C. in George Fischer (Holdings) Ltd. -v- Multi-Design Consultants Ltd. [1998] 61 Con.L.R 85 when he said at para. 194

"Each scheme was criticised by the proponents of the other. Neither had been designed in full detail, so acceptance of either is, to some extent, dependent, first, on a judgment as to the ability of the designer, with the assistance of the specialist knowledge of the relevant manufacturer and a contractor experienced in using the system, to devise suitable detailed treatment of all the potential trouble-spots and, second, on an assessment of the guarantees and bonds offered by the manufacturer and contractor. Since Soladex would be so much the cheaper, and cannot be said to be the more detrimental to the appearance of the buildings - I should have thought, if anything, the reverse - it must clearly be preferred unless the criticisms of its expected effectiveness are, taking the above considerations into account, made good on the balance of probabilities."

34. With these principles in mind I turn to consider the alleged defects in this location. I deal first with the driveway. I consider that the ponding on the driveway is completely unacceptable. I am in no doubt that the necessary remedial works must deal with the difficulties created by this ponding. I was originally concerned that Mr. Brewer's scheme would not address, or address adequately, the ongoing ponding problem. However, during closing submissions, when I raised the point with counsel, Mr. Coney expressly accepted that the ponding would be dealt with by Mr. Brewer's proposal to re-lay the surface of the drive so that it was entirely level. If that is done, then the defective workmanship will have been addressed, and there is no dispute that the driveway will operate as it was originally designed to do. The design fall of the drive was from the road towards the Aco drain at the threshold of the garage. The question then becomes: Is a drive laid to that design a breach of the Defendant's contact with the Claimants? If it was, then I should prefer Mr. Farrell's scheme because he says that the driveway must be completely re-laid to a different fall that runs in completely the opposite direction from the design fall (i.e. towards the road). But if a properly constructed driveway with a fall towards the Aco drain is not in breach of contract, then there can be no justification for re-laying the drive at the Defendant's expense.
35. There was no evidence that a properly constructed driveway with a fall towards the Aco drain would represent a breach of the Defendant's contract. There was nothing to say that the Defendant was in breach of a British Standard or some NHBC requirement by designing a fall which ran in that particular direction. In those circumstances, there is no material before me on which I could find that the design fall of the driveway, once it has been properly constructed, constituted a breach of contract. In the absence of any breach of contract concerning the design of the driveway then, once the surface has been properly laid, no further remedial work to the driveway could be justified. In the light of Mr. Coney's concession, I do not consider that any other conclusion is appropriate or possible.
36. As for the garage, Mr. Farrell's scheme involves raising the height of the garage floor, but this is only a part of his overall scheme which changes the fall of the driveway. It anticipates that the driveway will be at a higher level than it presently is. In other words, if the drive does not have to be re-laid to a different fall, the proposal to raise the level of the garage floor seems to me to be inappropriate, because it would create a step at the threshold of the garage where the new garage floor level meets the existing level of the drive. In those circumstances, I would have thought that the solution proposed by Mr. Brewer (which identifies the provision of a short ramp at the threshold of the garage to prevent any water ingress) was a better technical solution.
37. I should also add that, in my judgment, there are at least two other technical difficulties with Mr. Farrell's scheme, both of which were raised in correspondence and cross-examination, but neither of which could be satisfactorily answered. First, Mr. Farrell's scheme involved raising the height of the Aco drain outside the property. Since that drain runs across the threshold of both the Claimants' garage and the adjoining garage, the Aco drain would be at two different levels, which, as Mr Brewer pointed out, was wholly unsatisfactory. Secondly, if Mr. Farrell's scheme was adopted, the Claimants' driveway would be laid to a fall which ran in completely the other direction to the fall of the adjoining driveway, and it is very difficult to see how the two driveways could then exist satisfactorily side by side. Again, this was a point raised by Mr. Brewer, and not answered by Mr. Farrell. Although it was suggested that the Claimants might be able to sort the matter out with their neighbours, it seems to me that that was an unsatisfactory basis on which the court should proceed.
38. Accordingly, for the reasons set out above, I reach the following conclusions:

(a) Following the re-laying of the surface of the Claimants' driveway, it is agreed that the ponding problem will be rectified. The design fall of the driveway does not itself constitute a breach of contract, and it has never been suggested to the contrary. There is therefore no justification for re-building the driveway to a different design fall;

(b) As regards the different proposals to prevent water ingress into the garage, I conclude that technically Mr. Brewer's solution of a small ramp is better than Mr. Farrell's solution of a raised garage slab. Mr. Farrell's solution only makes sense if the driveway was re-laid to a wholly new fall, which, for the reasons I have given, is not appropriate. In addition, Mr. Farrell's solution would create a step and would create difficulties with the Aco drain. It would also not work with the adjacent driveway. Mr. Brewer's scheme, on the other hand, has none of those difficulties;

(c) Even if I was wrong and the two schemes were roughly equivalent from a technical point of view, then adopting the approach of Judge Hicks in George Fischer, I would award damages on the basis of Mr. Brewer's scheme because it is cheaper, but would achieve the same remedial result.

39. Accordingly, I consider that Mr. Brewer's scheme is the appropriate remedial scheme in all the circumstances. The agreed cost of that scheme is £1,710.40. That is therefore the sum due, subject to the Defendant's over-arching argument that they should be entitled to carry out the work and that therefore no damages at all should be awarded. I deal with that contention in Sections D1 and D2 below.

C3 The Kitchen

a) Relevant Tolerances

40. There was a good deal of debate about the relevant tolerances relating to floor levels at the time that the property was built in 2000. Doing the best I can on the information provided, I conclude that the relevant tolerances were as follows:

i) The NHBC standards effective from January 2000 provided simply that "all measures shall be within the tolerances currently acceptable in the industry unless specified otherwise";

ii) BS5606 1990 provided that non-suspended floor slabs, before the laying of the screed, could vary from the target plane by plus or minus 25mm. However, that figure is meaningless in the absence of an overall length, because plus or minus 25mm would plainly be unacceptable in a small room, but may be acceptable over a much larger area;

iii) Figure 4 in the same British Standard talked about a variation in the target plane of plus or minus 15mm. Again, however, this figure on its own is of little assistance because it did not indicate over what length the plus or minus 15mm might be acceptable;

iv) The clearest guidance comes from the NHBC documentation of 2006 as to floor levels. That provided:

"Maximum 4mm out of level per metre for floors up to 6m across and maximum 25mm overall in any other case."

Mr. Farrell suggested that these figures were known and accepted within the UK construction industry prior to the publication of the NHBC material in 2006. I accept his evidence.

b) The Kitchen Units and the Kitchen Floor

41. It is not disputed that the island unit in the kitchen is out of level and requires rectification. Mr. Brewer has identified a scheme which achieves the necessary remedial works to the island unit at an agreed cost of £705. However, the Claimants maintain that the floor level of the kitchen is the cause of the problem with the island unit and it is therefore the floor level that requires to be rectified. The cost of that work is agreed at £3,172.50.
42. There was a major dispute as to whether the floor levels in the kitchen were, or were not, out of tolerance. As I pointed out to the parties during the course of the evidence, it was sadly typical of this case that, by its conclusion, the Claimants were relying on measurements taken by the Defendant's surveyor, whilst the Defendant was seeking to rely on measurements taken by the Claimants' surveyor. No joint measurements had ever been proposed, let alone taken, by the surveyors.
43. Mr. Farrell said in evidence that he had not taken any measurements at all, but he was taken to his report of August 2003 which demonstrated that he had measured the fall at 7mm in a length of 2.4m across the whole of the floor. He was obliged to accept that those measurements were within the NHBC 2006 permitted tolerances (paragraph 40(iv) above).
44. However, the matter does not end there. Mr. Brewer measured the slope of the island unit at 10mm in one metre, and he said that he assumed that the floor beneath was also sloping by the same amount. Although Mr. Letman said that this was an assumption rather than an actual measurement, it seems to me that there is nothing in that point, because it was an assumption which Mr. Brewer was properly and fairly prepared to make. In addition, in the statement prepared by Mr. Farrell and Mr. Brewer, pursuant to CPR 35.12, Mr. Brewer said this,

"Whilst it is accepted that the level of the kitchen floor is outside the tolerances, the out-of-level is not throughout. The worst area is where the units are sited where the out-of-level was around 20mm. I accept that this deviation from the horizontal exceeds the British Standard recommendation."

c) Analysis

45. It seems to me that, on analysis, these various measurements can be properly reconciled. It is plain that, when measured across the room as a whole, the level of the floor was just about within tolerance. It is equally clear that, in the area of the floor on which the kitchen island unit sits, the floor level is out of tolerance and represents a breach of contract. In those circumstances the issue becomes: Should the remedial work be limited to the island unit, or should the work that is carried out deal with the underlying cause of the problem, which is the level of the floor itself?
46. I am in no doubt that the cause of the problem with the island unit - namely, the slope of the floor beneath - should be remedied. Thus the appropriate action is to level the floor in the kitchen. There are two principal reasons for this. First, I accept the proposition that the problem with the island unit is simply a symptom of an underlying problem, and it is that underlying problem that needs to be rectified if the breach of contract is to be properly remedied. If the defective floor itself is not rectified, the solution cannot help but be some sort of "bodge-up", as Mr. Farrell put it, which makes no attempt to deal with the real defect.
47. Secondly, it seems to me that the island unit in the kitchen is an important feature of that room because it divides up the space between the kitchen area and the dining area. In those circumstances I consider that, because the floor in that important area is so severely out of tolerance, as Mr. Brewer accepts, it would be wholly unsatisfactory and inadequate if that problem was not resolved. It can only sensibly be resolved by levelling the entire floor of the kitchen.
48. Mr. Letman sought to argue that if the whole of the kitchen floor was re-laid, that would be an excessive solution in accordance with the principle in Ruxley. I do not accept that. Just as the debate on the garage and driveway came down to a debate between two competing remedial schemes (on which I found in favour of the Defendant), so the argument about the kitchen is also a debate about two competing remedial schemes on which, for the reasons I have stated, I have found in favour of the Claimants.
49. Accordingly, the prima facie measure of the Claimants' loss in respect of the kitchen is the agreed sum of £3,172.50. Again, this is subject to the over-arching point about the Defendant's right to remedy the defects themselves.

C4 The Second Floor

50. I have set out above the history in relation to the problems with the second floor. It will be recalled that Mr. Bruce's original proposal on behalf of the Defendant was the installation of firring pieces. That proposal was never accepted by the Claimants or their advisors.
51. Following the belated commencement of these proceedings and the instruction by the Defendant of Mr. Brewer, the matter was reconsidered following the inspection in January 2007, which I shall have to discuss in greater detail later in this judgment. Mr. Brewer agreed that the floors on the second floor required to be re-laid in the rear master bedroom, the en-suite shower room, and the front bedroom. There is therefore, belatedly, no dispute between the parties as to the need for this work.
52. The agreed value of this work is £17,495.62, inclusive of VAT. That includes an amount for redecoration. Again, that represents the appropriate measure of the Claimants' loss, subject to the Defendant's argument about its right to carry out the necessary remedial works.

C5 The First Floor

a) Matters Agreed

53. It is agreed that the floor levels to the front and rear bedroom on the first floor are out of tolerance and that remedial works are required. The remedial scheme has been agreed by the experts in the sum of £4,844.60. Again, of course, that is subject to the point about the Defendant's right to carry out remedial works. It is also agreed that levelling work is required to the first floor landing.

b) Matters Not Agreed

54. The principal element of the first floor construction that is not agreed concerns the floor levels in the first floor bathroom, and whether they are out of tolerance and need to be rectified. Although the dispute as to the floor in the bathroom is the vital element of the debate about the first floor, there are, again, no agreed measurements. During cross-examination, however, the evidence as to whether or not the floor was out of tolerance finally became clear (see below). There is also the Claimants' further case that, even if the floor in the bathroom was within tolerance, it still has to be levelled so as to correlate with the re-laid landing floor and, in particular, to avoid a step between the landing and the bathroom. I deal with those issues in turn.

c) The Condition of the Bathroom Floor

55. Mr. Brewer measured a fall across the bathroom floor of minus 10mm. Mr. Griffith thought it might have been slightly more than that, but expressly accepted that he could not argue with the minus 10mm. The experts were agreed that the width over which this slope was to be measured was 2.5m. Thus, Mr. Griffith was obliged to accept in cross-examination that, although it might be said that it was on the borderline, the floor in the bathroom was within the permitted NHBC tolerances of 4mm in every one metre (paragraph 40(iv) above). No other tolerance or British Standard was referred to of which the bathroom floor was, or might have been, in breach.
56. On the basis of that evidence, therefore, I am bound to conclude that the floor in the bathroom was within the contractual tolerances and that therefore the Defendant was not in breach of contract in respect of the first floor bathroom floor. Prima facie, therefore, the Claimants are not entitled to any damages at all in respect of that part of the works.

d) Re-levelling the Bathroom Floor Anyway

57. The Claimants' alternative case, which emerged rather awkwardly during the cross-examination of the experts, was to the effect that, if Mr. Brewer's scheme for the landing was implemented, there would be a step from the landing to the bathroom, which would be unacceptable, and therefore the floor of the bathroom had to be re-laid in order to marry up with the new floor on the landing. The difficulty with that argument was that Mr. Brewer rejected it absolutely, and explained in clear terms in his cross-examination that, on the detail of his proposed scheme, there would be no such step. When this point was put to Mr. Griffith he had no answer to it. During his evidence he asked for, and was given, time to consider Mr. Brewer's clearly stated position that there would be no step. Mr. Griffith was unable to demonstrate thereafter that Mr. Brewer was wrong, or the way in which a step could, or might be, created.
58. In the light of Mr. Brewer's explanation and the absence of any cogent challenge from Mr. Griffith it is plain that the Claimants' alternative case has not been made out either. I find as a fact that the landing levels can be rectified in such a way that there would be no step up or down to the bathroom. There was therefore nothing to indicate that the bathroom floor, which itself was within tolerance, needed to be the subject of any remedial work at all.
59. I should also add that there are two additional reasons why, in my judgment, it would be wrong and unjust to make an order against the Defendant in respect of the bathroom floor on the first floor. First, I must bear in mind that, unlike the position on the second floor, there was never a complaint about the levels in the first floor bathroom until many years after the Claimants took up residence. Even then, the evidence was that the levels were investigated following an event when Mr. Iggleden threw water on to the floor to watch it run across the slope. It had never been a defect, therefore, with any visual impact.
60. Secondly, the cost of levelling the bathroom floor on the first floor is in excess of £8,000^[2] as compared to £4,123.07 for re-levelling both the front and the rear rooms on the same floor. The explanation, of course, for this discrepancy was the large amount of stripping out and replacement that will be involved with the bathroom and its associated fittings, tiling, and the like. I consider therefore that the figure is excessive and unreasonable in all the circumstances. In those circumstances the principles to which I have referred in both Ruxley and Fischer would become relevant.

e) Summary

61. For all these reasons, therefore, I reject the claim in respect of the first floor bathroom. The remedial work costs for the first floor are therefore £4,844.60 for the front and rear rooms and £621.03 for the landing (the latter was the agreed cost of Mr. Brewer's work to the landing). The alternative claim which was suggested at Item 7 of the schedule of loss - that the relevant costs would be the same as for the second floor - was, in my judgment, misconceived, because, as Mr. Griffith agreed, the extent of the defects on the second floor was different to, and worse than, the position on the first floor. The second floor scheme is inapplicable in any event because of my finding that no work is required to the front floor bathroom, as compared to the shower room on the second floor which was thoroughly defective and had to be completely re-levelled. Again, whether or not the Claimants are entitled to the sums referred to above of £4,844.60 and £621.03 depends upon the Defendant's argument as to their right to do the remedial work. It is to that proposition, and related arguments, that I now turn.

D. MITIGATION, REASONABLENESS, AND DELAY

D1 The Claimants' Refusal of the Defendant's Past Offers

(a) Introduction

62. It is the Defendant's case that the Claimants acted unreasonably in refusing four separate offers made by the Defendant between 2002 and 2004, and that, as a result, the Claimants failed to mitigate their loss such that no sums calculated by reference to the cost of remedial work ought to be recovered by the Claimants by way of damages. I deal with each of these offers briefly in turn to see if their refusal was unreasonable.

(b) Offer in August 2002 that the Parties' Surveyors Meet

63. The offer and the terms of its uncompromising rejection are set out in paragraphs 10 and 11 above. It must be unreasonable for a party in a dispute of this kind to refuse to allow the surveyors to meet to discuss their differences, particularly in circumstances where the costs of that meeting are being underwritten by the other side. It is impossible to understand what the Claimants thought they would achieve by adopting such an unreasonable stance. I am, however, less persuaded that, had the surveyors met in August 2002, they would have achieved anything very different to the terms of the NHBC resolution report produced a few months later at the end of October. Therefore, I find that the Claimants acted unreasonably in refusing the offer and that this plainly caused a delay, but I reject the Defendant's case that, if the surveyors had met, then on the balance of probabilities the case would have settled.

(c) Offer In January 2003 To Do The Work

64. The relevant facts are set out at paragraphs 13 - 17 above. With hindsight of course, it was most regrettable that the remedial works that were just about to start in January 2003 did not go ahead. Moreover, the principal reasons that the works did not proceed at that point - namely, Mr. Farrell's belated arrival on the scene and his radical plan for the garage and the driveway, and the Claimants' dogged reliance on that plan thereafter - have been found to be unjustified. At paragraphs 31 - 39 above, I have rejected the efficacy and appropriateness of Mr. Farrell's scheme.
65. But it is important not to be overly influenced by hindsight. At the time Mr. Farrell's advice was that only his scheme was appropriate, and it seems to me that the Claimants cannot reasonably be criticised for relying upon that advice at that point. Furthermore, as regards the second floor, the proposed works to be carried out by the Defendant were exceedingly vague, a deficiency of the NHBC resolution report which was not rectified by the Defendant's own schedule of works. I consider that the Claimants were entitled to know more about what work might be carried out to the second floor, particularly given Mr. Farrell's advice of 12^th January, 2003 which was provided subsequently to the Defendant (paragraph 17 above).
66. For these reasons, it is difficult to say that the Claimants acted unreasonably in January 2003 by causing the remedial works to be cancelled. However, I am firmly of the view that, in the light of the last minute developments on the Claimants' side which had led to the cancellation of these works, it was for the Claimants' team to put together a clear and comprehensive set of proposals in respect of both the garage driveway and the second floor, and indeed in respect of any other areas of defects which were in issue. This would have enabled one of two things to happen: either a detailed schedule of remedial works could have been agreed, or, if the parties had been unable to reach agreement, the Claimants' team could then have considered their other options. In reality, the Claimants' proposals for the remedial works - and even then they were incomplete - were not provided to the Defendant until October 2003 with full documentation being delayed for some further weeks. I consider that that delay was wholly unjustified.

(d) Offer of August 2003

67. The relevant fact and matters are set out at paragraph 22 above. The offer made by the Defendant was broadly consistent with the scope of the works which I have now determined, with three areas in which it was not as full as I had found to be appropriate. Those three areas were:

(a) The Defendant's proposals for the second floor following inspection involved the inclusion of firring pieces. With hindsight we now know that that was inadequate;

(b) The Defendant's proposals at that point included nothing for the first floor, because neither side had carried out an inspection of the first floor. Following an inspection it may well be that the same offer - involving firring pieces - might have been made in respect of the first floor, particularly given that the defects on the first floor were less extensive than on the second floor. On the balance of probabilities it seems clear that no more extensive remedial works would have been offered for the first floor by the Defendant;

(c) The Defendant's proposals in respect of the kitchen involved work to the island unit only, not to the floor as a whole.

68. It seems to me that, by August 2003, the Claimants' team should have known precisely what remedial works they required. If they had not undertaken sufficient inspections or investigations, then that was their own fault. Seven months after the remedial works had almost started, the Claimants should have been in a position either to accept the Defendant's updated proposals, which had been made by Mr. Bruce in July, or to point out which parts they did accept and which parts they did not, with an explanation as to why not. Therefore, by this time, the Claimants should either have been in a position to accept the Defendant's offer, or if they considered that the scope of works offered was unreasonably limited, they should have made clear the differences and, if a greater scope of work could not be agreed, they should have carried out the remedial works themselves.
69. Neither of these things happened. Instead, there was a delay of three years (August 2003 to August 2006) before the commencement of these proceedings during which only three things of any note happened:

(a) The provision of the Claimants' reports in October 2003, with photographs thereafter;

(b) The inspection in January 2004 which did not permit a full inspection of the first floor (paragraphs 26 and 27 above);

(c) The desultory correspondence about the buy-back of the property which, over the course of nine months, went nowhere.

70. Accordingly, whilst I do not consider that the Claimants acted unreasonably in not accepting the August 2003 offer (because, for example, it did not encompass all the work that I have now determined should be carried out) I also conclude that the Claimants did act unreasonably in not bringing matters to a head at this time, and, if they did not accept the Defendant's offer, or any improved offer, failing to carry out their own remedial works. I was careful to check with Mr. Coney during the trial that the Claimants could have funded the remedial works themselves. He confirmed that. Thus, I regard the failure to take either of the options outlined above to have been unreasonable.

(e) Offer to Buy Back

71. It seems that the buy-back was first suggested by the Defendant, and originally embraced in principle by the Claimants (see paragraph 27 above). However, in the event, after nine months of inactivity and desultory squabbling over the way in which the value of the property could be ascertained, the Claimants changed their mind. It is quite impossible for me to say that the Claimants acted unreasonably in refusing the offer. Indeed, it is not clear that a valid offer to buy back, capable of acceptance, was ever made by the Defendant. Even if it was, it seems to me that the Claimants were perfectly entitled to decide to remain in the property which they had bought and with which, but for the Defendant's original breaches of contract, they were quite happy. Again, however, I am troubled by the time which was allowed to pass from the inspection in early 2004, following which the buy-back offer was first made, to early 2005, when the Claimants announced their change of mind. Again, it seems to me that that delay was unjustifiable.

(f) Summary

72. At no time prior to the commencement of these proceedings did the Defendant ever offer to carry out the works which are now either agreed or which I have determined are necessary. Their offer went a very long way towards that full scope of works, but was never entirely consistent with it. On that ground alone it may properly be submitted on their behalf that the Claimants cannot be overly criticised for refusing the offers that I have referred to above. Further, as I made plain in the preceding paragraphs, I do not think that the Claimants can be unduly criticised for refusing the particular offers which I have analysed above. Where I am afraid I do consider that the Claimants, or perhaps more accurately the Claimants' team of professional advisors, can be roundly criticised is in respect of their failure to adopt their own pro-active course of action, their failure to accept anything less than the full scope of the works which they wanted to have carried out and, in particular, their lengthy periods of silence and inactivity. In the round it has to be said that, on the face of the correspondence, it was the Defendant who was always seeking to resolve this matter, and the Claimants who were always rebuffing their efforts. I refer to that point again at Section D4 below.
73. In all the circumstances, I find that the Defendant has not made out its specific case that, in consequence of the four offers referred to above, and the Claimants' refusal to accept them, the Claimants are not entitled to damages calculated by reference to the cost of the remedial works. However, the same argument arises again in respect of the Defendant's more recent offer. I therefore turn to address that argument which involves a consideration of principle as well as fact.

D2 The Claimants' Refusal of the Current Offer to Carry Out All Required Remedial Works

a) The Submission

74. On behalf of the Defendant, Mr. Letman submits that the Defendant should be allowed to carry out all remedial works ordered by the court in accordance with the terms of their offer contained in their solicitors' letter of 14^th May, 2007. He says that it is unreasonable for the Claimants to have rejected, and to continue to reject, that offer, as they did in their solicitors' reply of 18^th May, 2007 and by way of their closing submissions. The relevant part of the letter of 14^th May, 2007 reads as follows:

"Further to the hearing before His Honour Judge Peter Coulson, Q.C. last Friday we confirm that our clients, who are experienced and responsible national house builders, are prepared through their sub-contractors to carry out such remedial works as are agreed and/or determined by the court. They will ensure that all such works are properly supervised and carried out, and completed in a good and workmanlike manner.

Furthermore, our clients recognise that your clients will want to be satisfied from their own surveyor that this has been achieved, and therefore our clients are willing to meet the reasonable costs of your clients' surveyor inspecting all such works as are carried out. It is anticipated that this will involve no more than three visits and our clients' offer to meet his reasonable costs is limited accordingly."

75. Mr. Letman maintained that, in consequence, the Claimants are not entitled to damages representing the cost of carrying out remedial works, and that the Defendant is entitled to a declaration that it was, and is, unreasonable for the Claimants not to allow the Defendant to carry out the necessary works. As discussed during submissions, this would have the unusual effect of leaving the Claimants with no option but to engage the Defendant, free of charge, to carry out the remedial works.

b) The Principles

76. In an action against a contractor for defective work the usual measure of loss will be the cost or reinstatement/repair because that was the foreseeable consequence of the defective work (see, by way of example, East Ham Borough Council -v- Bernard Sunley & Sons Ltd. [1966] AC, 406 and Darlington Borough Council -v- Wiltshire (Northern) Ltd. [1995] 1 WLR 68 at 79). Certain standard forms of construction and engineering contracts give the contractor the right to return to carry out certain types of remedial work. Mr. Letman confirmed that in the present case the Defendant had no such contractual right. Accordingly, the only issue is whether the Claimants failed to mitigate their loss by refusing to allow the Defendant to carry out the works.
77. There have been a number of cases in this court where it has been held that the claiming party has not mitigated his loss because he unreasonably refused to prevent the contractor to complete and/or rectify items of outstanding work. That was, for example, the conclusion of His Honour Judge Toulmin, Q.C. in City Access Ltd. -v- Daniel P. Jackson [1998] 64 Comm. L.R., 84 at p.113. However, it should be noted that in City Access the work which was unreasonably refused was snagging work, rather then large-scale remedial works involving the decanting of the occupiers. Moreover, in Payzu Ltd. -v- Saunders [1919] 2KB, 581 the leading case on non-recoverable mitigable loss in the contractual context, Lord Justice Bankes observed that there would always be cases "where as a matter of fact it would be unreasonable to expect a Plaintiff to consider any offer made in view of the treatment he has received from the Defendants". Thus, the issue in this case turns on whether it is reasonable for the Claimants now to say that in the light of the past events they do not want the Defendant to come back to the property to undertake any work at all.

c) Analysis

78. The outstanding works are more than mere snagging. They arise, let us not forget, out of the Defendant's failure to build the property properly in the first place, and have been compounded by the Defendant's unwillingness to do the full scale of works which I have now determined are necessary. The re-levelling of the kitchen floor and the replacement of the floors on the second floor throughout are the two most obvious examples of works which the Defendant either failed to accept at all, or accepted only after the start of this litigation. On all the evidence it seems to me that it is not unreasonable for the Claimants to say now, five and a half years on, that they do not want the Defendant to return to the property to undertake any further work.
79. Further, and in any event, I should add that, in my judgment, it would take a relatively extreme set of facts to persuade me that it was appropriate to deny a homeowner financial compensation for admitted defects, and leave him with no option but to employ the self-same contractor to carry out the necessary rectification works. I am in no doubt that for the reasons I have given the facts in this case do not justify such an outcome.
80. However, before leaving this issue, I should also say that the delays, and the failure on the part of the Claimants' team to state their own case as to remedial works promptly and clearly, were also related to their evidence as to their attitude to the Defendant. All of the correspondence before the commencement of the proceedings in 2006 is written on the basis that, if a remedial scheme could be agreed by the parties, the Defendant would carry it out. Certainly prior to the litigation the Defendant clearly expected to be given that opportunity and that expectation was obviously known to the Claimants and their solicitors, and never gainsaid.
81. But, on his own evidence, Mr. Iggleden said that, once he became aware of the problems with the second floor in the summer of 2003, he decided that he was not going to allow the Defendant back to the property. Yet he failed to tell anyone of this decision, not even his own solicitors, with the result that much time and energy was spent debating a schedule of potential remedial works to be carried out by the Defendant which Mr. Iggleden alone knew would never be performed. This only confirms my view that, by the summer of 2003, the Claimants' team ought to have taken hold of the dispute by the scruff of the neck and adopted the course set out in paragraphs 68 - 70 above.
82. However, despite my finding that the Claimants were at fault for failing to communicate their decision on this very important matter to the Defendant, I conclude, for the reasons which I have given, that the Claimants were entitled to decide that they did not want the Defendant to carry out the remedial works. Accordingly, I reject the Defendant's application for a declaration that the Claimants' refusal was unreasonable. The effect of this is that the Claimants are entitled to financial damages in respect of the costs of the remedial works. In addition, I expressly reserve the position on costs generally. It seems to me that the issues that may arise as to the conduct of the parties, and the consequence of that conduct on any orders that I make for costs, will have to be dealt with separately.

D3 When Should The Remedial Works Have Been Carried Out?

83. It follows from the findings that I have set out above that the Claimants did not act unreasonably in rejecting the various offers made by the Defendant, and cannot be said to have failed to mitigate their loss simply as a result of those refusals. Of course, that means that someone else will have to carry out the remedial works which will take place (at the earliest) in the last four months of 2007. I asked Mr. Coney whether he submitted that it was reasonable that such works were being carried out four years after the bulk of those works would, but for the Claimants' intervention, have been carried out free of charge by the Defendant. He accepted that he could not make such a submission. For the reasons set out above, I conclude that the Claimants have failed to mitigate their loss as a result of these delays. That then prompts the next question: when should the remedial works have been carried out?
84. I have said that by mid to late summer 2003 the Claimants' team should have resolved that, because of their failure to reach agreement with the Defendant over the scope of the work, the Claimants would have to carry out the works themselves. The finding that the Claimants' team could have carried out the works at that stage is entirely consistent with the detail in Mr. Farrell's reports and Mr. Griffith's reports, all of which had been completed by this time, and which set out a programme of works and further inspections. Such a conclusion is also entirely consistent with Mr. Iggleden's evidence that, by this same time, he had resolved not to have the Defendant back to the property. The agreed period for the actual carrying out of the remedial works which I have determined (without the remedial work to the bathroom on the first floor) was thirteen weeks. Thus, it seems to me those remedial works could, and perhaps should, have been completed by the end of 2003.
85. I appreciate that it might be said that some of the steps in the process may have taken longer than that. I also appreciate that it might be said that, even though the Claimants were able to fund the remedial works themselves, they might have preferred to pursue their TCC action first. This litigation has taken significantly less than a year. Even making an allowance in the Claimants' favour for all of those points, it still means that, on any view, the necessary remedial works should have been completed by the end of 2004. Indeed, I cannot see any justification, in the evidence that I have heard and in the documents that I have looked at, for any later date for the completion of both the action and the remedial works, regardless of the sequence in which those two things happened.
86. Accordingly, I find that the remedial works should have been completed by the end of 2004 at the latest, even making allowance for a trial for which, according to Mr. Coney's submission, the Claimants' team was fully prepared in October 2003. The delays that have occurred, and the reasons why that position has not been achieved, cannot, it seems to me, be laid at the door of the Defendant.

D4 Delays

87. I can test the reasonableness of my conclusion, that the action and the remedial works should both have been completed by the end of 2004, in another way. Mr. Letman complains about specific periods of delay on the part of the Claimants' team which amount to the best part of three years in total, from July 2003 to now. I consider that, in general terms, these criticisms are well-founded. That also demonstrates, therefore, that the action and the remedial works should, but for those delays, have been completed three years ago, by the end of 2004. Dealing briefly with the periods of delay on which Mr Letman relied:

(a) 4 months from July to November 2003: As set out in paragraphs 21 -24 above, responses were chased to Mr. Bruce's reports. Instead of there being any substantive response, four months later the Claimants served their own reports (in October 2003 even though they had been prepared some months earlier). There were then further delays in respect of the provision of the photographs;

(b) 6 months from April to October 2004: As set out in paragraph 27 above, there was a period of six months when, following the Defendant's response to the Claimants' open offer to buy back, nothing happened at all;

(c) 22 months from December 2004 to October 2006: As set out in paragraph 28 above, nothing happened during this period to advance either the carrying out of the remedial works, or the legal pursuit of the Defendant.

88. For these reasons I conclude that these delays are the responsibility of the Claimants' team. They demonstrate that there has been a delay for the best part of three years for which the Claimants could not now be entitled to any compensation. As I have indicated, that fits precisely with my conclusion in Section D3 above that this action and the remedial works should have been completed about three years before they actually will be.

E. THE SCHEDULE OF LOSS

89. I set out in the following paragraphs my conclusions as to each item in the Schedule of Loss.

Item 1 - Resolution Report Items

90. This is agreed at £20,335.93 (see paras. 29 - 30 above).

Item 2 - The Driveway and the Garage

91. I have determined this at the figure of £1,710.40 (see paras. 31 - 39 above).

Item 3 - The Kitchen

92. I have determined this at the figure of £3,172.50 (see paras. 40 - 49 above).

Item 4 - The Second Floor

93. I have determined this at the figure of £17,495.62 (see paras. 50 - 52 above).

Items 5 - 7 - The First Floor

94. I have determined this at the figures of £4,844.60 and £621.03, a total of £5,465.63 (see paras. 53 - 61 above).

Item 8 - Miscellaneous

95. A separate claim in respect of this item was unclear and was in any event abandoned by Mr. Coney during his closing submissions.

Item 9 - Storage Costs - Actual

96. The pleaded claim is for £12,414.61 up to 30^th June, 2007. It is intended to cover the cost of storing the items from the bedroom and the dining room, which were placed into store in May 2003 to facilitate the inspection of the rear room on the second floor. The principal complaint is not about the fact that some items had to go into store to facilitate the inspection, but that the claim now is for a period of over four years.
97. It seems to me absurd to suggest that it was reasonable for these items (which included clothing) to have been kept in storage for such a period. Even allowing for all the uncertainties noted above, I have concluded that the storage charges would have ceased when the remedial works were reasonably completed. That, as I have said, would have been no later than the end of 2004. In the alternative, by the end of December 2004, if not long before, the Claimants would have realised that no remedial works were imminent and they should have recalled these items from storage. Either way, no claim for damages can be countenanced beyond the end of 2004. Such charges were either unforeseeable or arose from the Claimants' failure to mitigate.
98. Thus, this claim can only run from 1^st June, 2003 to 31^st December, 2004, a period of nineteen months. That will, of course, include the period during which the remedial works should have been carried out. The monthly figure for this period was apparently £226.17. Nineteen months at £226.17 makes a total of £4,297.27. This figure is subject to an agreed credit of £345, which brings the total to £3,952.23.

Item 10 - Storage Costs (Prospective)

99. Items 10, 11 and 12 concern the removal, storage and alternative accommodation costs to be incurred as and when the remedial works are undertaken. It is agreed that the appropriate alternative accommodation would be unfurnished, so that the Claimants would use their own furniture during their time away from the property. In those circumstances it is agreed that the principal storage charge claim at Item 10, which was based on an assumption of furnished accommodation, is inapplicable.
100. Although there was an alternative claim within Item 10, on analysis that is for the continuation of the existing storage charges in Item 9 through the period of the remedial works. I have already allowed in my ascertainment of the sum due under Item 9 for the period in which the remedial works would, and should, have been carried out. Therefore, no further sum is due under the alternative claim within Item 10.

Item 11 - Removal Costs

101. This is a claim for £3,487.11 for the removal costs when the Claimants' possessions are moved out of the property to allow the remedial work to be carried out. Mr. Letman's argument was that, prior to the provision of the schedule of loss, this was not a pleaded item of claim. On a narrow view of the pleadings he is right about that. However, the pleaded claim did include a claim for furnished accommodation and storage. The claim that I have allowed involves unfurnished accommodation and thus no storage. I consider that it is inherent in such a claim that it also included for the removal costs to get the furniture either to storage or, as I have found, to the alternative accommodation. It would be unjust to ignore such an obvious claim. I therefore reject the Defendant's pleading point on this issue and allow the sum of £3,487.11 for Item 11.

Item 12 - Alternative Accommodation

102. The parties are agreed that I should take the figure for unfurnished accommodation at £1,400 per month. What is the appropriate period? The remedial work will take thirteen weeks. However, the claim is for almost twice that - at six months - because, it is said, an assured shorthold tenancy would not be available for less than six months. Whilst that might be right as a matter of law, there is no evidence that any attempt has been made to obtain a tenancy for a lesser period. I can see no reason why a four month tenancy could not have been agreed. I am most reluctant almost to double the alternative accommodation claim in the absence of any evidence as to the sorts of tenancies that might be available to the Claimants. I am certainly not prepared to assume that only a six month tenancy would have been available.
103. Accordingly, it seems to me that I have to work on the thirteen week period and build in a reasonable amount for such slippage as may occur. I consider, therefore, that four months - sixteen weeks - is the appropriate period to take. I should also note that these accommodation figures (which are referable to today's prices) represent a benefit to the Claimants, given my view that these remedial works should in fact have been carried out three years ago. Accordingly, the appropriate figure for damages is four months times £1,400, a total of £5,600.

Item 13 - Office Centre

104. I believe this item of claim was not pursued.

Item 14 - Clothing Costs

105. This claim was not pleaded and was not set out in any documents or any witness statement. I therefore disallowed any examination-in-chief on the topic. The item of claim must therefore fail.

Item 15 - Credit for Replacement Flooring

106. I deal with this under the general heading of 'credits' below.

Item 16 - Costs of the Inspection on 10^th January, 2007

107. This is a claim for £2,876.50 apparently incurred by the Claimants in respect of the inspection of the first floor which I ordered at the first case management conference in November, and which took place on 10^th January, 2007. It is agreed that this is an item of costs, not an item of damages. However, I am asked to comment on the reasonableness of the Claimants' conduct in respect of this inspection and the charges which were incurred in consequence. There is inevitably some history to this issue.
108. At the case management conference on 16^th November, 2006 the principal issue concerned whether or not there should be a further inspection on the first floor of the property. The Claimants were unhappy with the disruption involved, and were resisting the Defendant's application that such an inspection be ordered. I was at that stage unaware of the detail. However, I explained that, if the Defendant was right and there had not been a proper inspection of the first floor, the Claimants might be unable to prove that head of claim altogether. I therefore ordered that an inspection take place. Of course, as we now know, such an inspection was vital to the Claimants' case because, for the reasons explored in paragraph 26 above, there had never in fact been a full inspection of the first floor. Without it, the Claimants' claim in respect of the first floor would have failed.
109. The precise terms of my order were as follows:

"1. Inspection

1.1 The Claimants are to permit the Defendant to inspect the property in question, namely, 2 Cairns Mews, Oxley Gardens, Shooters Hill, SE18 as follows:

1.1.1 A preliminary inspection without opening up is to take place in the week commencing 27^th November, 2006;

1.1.2 Thereafter a full inspection, including such opening up as is required by the Defendant is to take place before 22^nd December, 2006 over a maximum of three consecutive days.

1.2 If, and insofar as the extent of the full inspection above reasonably requires that:

(i) all or any of the Claimants' furniture and effects be placed temporarily in storage;

(ii) the Claimants temporarily vacate the property,

the Defendant is to pay the reasonable costs of storage and/or their hotel accommodation. Any such payment of costs is made without admission of liability and on the basis that the same be treated as costs in the case.

1.3 For the avoidance of doubt, the Defendant is to make good any damage to the property caused by them or their experts or contractors during the said full inspection within the three day period allowed.

1.4 The parties are to co-operate with one another and do all things reasonably necessary to ensure compliance with these directions."

110. I consider that the Claimants' solicitors' correspondence in the run-up to the inspection made unreasonable demands of the Defendant, such as the letter of 22^nd November, 2006 which sought to deny access to the Defendant's director, Mr. Redfearn, and endeavoured to ensure that the Claimants made all the arrangements in respect of the opening up. On this latter point the Defendant's solicitors responded the following day, namely, 23^rd November, 2006, to say:

"3. Furthermore, under the Order our clients are to make good any damage to the property caused by them or their experts or their contractors during the full inspection. It is therefore clear from the Order that the intention was for the opening-up to be dealt with by our clients and/or their contractors. If your clients insist on making their own arrangements, our clients will not accept responsibility for the costs and will not be liable to make good any damage.

4. In any event, your clients are under a duty to mitigate and they will be in breach of such a duty if they incur unnecessary costs and expenses in arranging for the floors to be opened up and the furniture removed by other contractors. No such costs will be incurred by them in the event of our clients carrying out the necessary works."

111. Again, this offer was not accepted by the Claimants. Thereafter, there was considerable further correspondence which I do not intend to set out here. The tone and content of the Claimants' solicitors' letter was hectoring and, at times, obstinate. In my judgment, their letters give the unfortunate impression that the Claimants were seeking to utilise the terms of my order (which they had not been happy about in the first place) to generate further claims. But for the Claimants' unreasonable conduct, their costs in respect of the inspection would, in my view, have been very modest because the vast bulk of the costs would have been born by the Defendant. Accordingly, I consider that, in general terms, the costs incurred by the Claimants in connection with the inspection were not reasonably incurred, and should not be recoverable as costs.

Item 17 - Costs of Reports

112. The parties are agreed that these are costs, not damages, and I am not required to comment further.

Item 18 - General Damages

113. There is a claim for general damages by both Claimants. There are two issues: the amount recoverable and the relevant period. Taking the latter point first, the relevant period is three years, namely the years 2002, 2003, and 2004 when the remedial works and this action should have been completed. There can be no basis for awarding general damages for the period after December 2004 because, on my analysis, any disruption thereafter was the consequence of the Claimants' own delays.
114. The sums awarded by way of general damages in claims of this sort are modest, ranging from the £500 awarded by His Honour Judge Newey, Q.C. in Fryer -v- Bunney [1982] 263 EG 158, to the £1,250 awarded by His Honour Judge Davis, Q.C. in James McKinnon -v- County Metropolitan Developments [1985] CILL 225. The figure in a more recent case - Bayoumi -v- Protim Services Ltd. [1966] 30 HLR 785 - was £1,500 per year. The most up-to-date decision on this topic is that of Mr. Justice Ramsey in Eiles -v- London Borough of Southwark [2006] EWHC 1411, TCC where he allowed £1,000 for a total of five years of living with the problems, and an additional £1,250 for a period of two years of investigations and remedial works. That made a total award of general damages of £2,250. At paragraphs 152 to 155 of his Judgment he also sets out a useful summary of the court's approach to claims of this sort.
115. It seems to me that the Claimants have suffered some disruption as a result of the loss of the master bedroom and will suffer further disruption when the remedial works are belatedly carried out. There is therefore plainly a loss that requires to be compensated by way of general damages. I consider that, in the overall scale of things, the measure of disruption is in the middle of the sorts of disruption that homeowners can suffer in these sorts of circumstances. Therefore I consider that for each Claimant, in respect of each of the three years that I have indicated, they are entitled to £750 by way of general damages. That gives an amount of £2,250 for each Claimant and a total by way of general damages of £4,500.

Item 19 - Interest

116. Interest is not due on Items 1 to 7 of the Schedule of Loss because these costs have not yet been incurred. In fact, because the figures are calculated at today's prices - not those applicable in 2003 or 2004 - the figures operate in the Claimants' favour. Items 11 and 12 are also prospective and therefore do not attract interest. Interest could only be payable in principle on Items 9 and 18.
117. In the exercise of my discretion I would not allow any interest in relation to those items of the damages claim for two reasons. First, the remedial work and other claims have been calculated, as I have said, at 2007 prices which represent a benefit to the Claimants, and which it seems to me would include for any modest allowance I might make by way of interest. Secondly, there are other sums paid by the Defendant some years ago, of which the Claimants have had the use, in respect of events which have not all happened. I deal with that under the heading of 'Credits' below.

Credits

118. There is agreement that £1,853.83 in respect of the Pickfords charges should be credited against any sums awarded to the Claimants. There is a dispute about the figure of £4,000 paid in respect of the removal and re-installation of the shower and wardrobes on the second floor, and also a dispute about the payment of £6,630.50 in respect of the replacement of all the carpets and the laminated floors.
119. Although the £4,000 was agreed for a specific purpose I reject the suggestion that in some way it is binding and cannot now be opened up, particularly given the agreement that the re-installation of the shower is already included within the figure for the second floor (Item 4 of the Schedule of Loss). Mr. Letman argues that the credit to reflect this double counting should be £1,500, calculated by taking half the total cost of removal and re-installation (as being applicable to removal only), and working out the future re-installation cost by deducting from the £2,000 that would remain a figure of £500, being a figure referable to Mrs. Horniblow's evidence as to the cost of re-installation of her wardrobe in an adjoining property. Although this was somewhat rough-and-ready, there was no other evidence as to the possible amount of this credit. Since it was agreed that a credit was appropriate, because of the double counting, and in the absence of any other evidence, I am bound to find that the credit should be calculated in the amount of £1,500. That is therefore the amount which I find is already included in Item 4 and should be deducted from any other sums due to the Claimants.
120. The £6,630.50 was also agreed and paid by the Defendant. I again reject the suggestion that it is in some way inviolable. First, it was paid in respect of an event - the removal and replacement of all the laminated floors and carpets - which has simply never happened. Secondly, it was agreed at a time when the remedial works to be carried out by the Defendant seemed to be imminent. It would be wrong, it seems to me, to hold the Defendant to a position advocated years ago, in respect of an event that has still not happened, given everything that has occurred since, and given my earlier criticisms of the Claimants' own conduct.
121. Further and in any event, I am very unhappy about the circumstances in which this figure came to be formulated. It was said by the Claimants to the Defendant at the time that their carpet suppliers, A.J. Rogers & Sons Ltd., had expressed "grave doubts as to the successful refitting of the carpets". In fact, the position was that A.J. Rogers & Sons had simply said that "We cannot guarantee that the refitted carpet will finish with our normal high standards". There was no evidence, either then or now, to justify the stance that all of the carpets would have to be replaced. Further, if it was the case that all the carpets had to be replaced, why were the Claimants spending money on storing the old carpet from the master bedroom for four years?
122. I conclude that some of the carpets, and all the laminated floors, will have to be replaced as a result of the remedial works. I also conclude that some of the carpets will be capable of being re-used. I do not consider that the A.J. Rogers' quotation can be read in any other way. I consider that, in respect of the sum previously paid to the Claimants, it would be fair to apportion £4,000 to reflect the likely cost of the new laminated flooring and the new carpets. That would leave a figure of £2,630.50 as a credit which should be allowed against the sums otherwise awarded to the Claimants. I also note that the Claimants have had the sum of £6,630.50 for over four years, which more than equates to any interest which they might otherwise have claimed on other items in the schedule of loss.

F. RECONCILIATION

123. Accordingly, the gross sum due to the Claimants is as follows:

(a) Item 1 - £20,335.93;

(b) Item 2 - £1,710.40;

(c) Item 3 - £3,172.50;

(d) Item 4 - £17,495.62;

(e) Item 5 - £5,465.63;

(f) Item 9 - £3,952.23;

(g) Item 11 - £3,487.11;

(h) Item 12 - £5,600;

(i) Item 18 - £4,500.

Total - £65,719.42.

124. From that falls to be deducted the credits of £1,853.83 (paragraph 118 above); £1,500 (paragraph 119 above); and £2,630.50 (paragraphs 120 - 122 above). That makes a total credit of £5,984.33. That is to be deducted from the gross sum due to the Claimants and would give a net sum due and owing by way of damages in the sum of £59,735.09. This Judgment has therefore dealt with all the outstanding issues between the parties save for the question of costs. At present, as I understand it, there is to be a hearing to deal with all issues of costs on Monday, 2^nd July at 10am.
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Note 1   This figure makes due allowance for the agreed figure of £2,750 plus VAT for redecoration of the second floor which is already included in another head of claim.    [Back]

Note 2   £9,032.02 less an allowance for the landing which, on Mr. Brewer's scheme, was £621.03.    [Back]