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

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

		Royal Courts of Justice Strand, London, WC2A 2LL
		1 February 2008

 


Mr. Justice AKENHEAD:

Introduction

1. The Claimants apply for leave further to amend the Particulars of Claim and the Scott Schedule and for leave to adduce in evidence what is termed a quantum report of their expert, Mr Easton. The Defendant applies for an order that judgment be entered in respect of certain items on the Scott Schedule in respect of which it is said that orders of the court were not complied with.
2. The claim relates to a housing estate, Langbourne Place, Westferry Road, London E14. The estate comprises 145 residential flats in two blocks, named the "Low" and "High" Rise Blocks and various common parts. Not all the flat owners are claimants. Fairview Land Limited ("Fairview") was the developer and, by various agreements for lease, Fairview granted long leases to the Claimants or their predecessors in title of the flats. The Second Claimant was the management company with responsibility to maintain the common parts.
3. The Claimants claim in these proceedings that the flats and the common parts are defective. A substantial Scott Schedule has been prepared with some 829 items. Items 1 to 66 relate to alleged defects in the common parts; Items 67 to 596 relate to alleged defects in the individual flats in the High Rise Block of those tenants who are claimants whilst Items 597 to 817 relate to the Low Rise Block flats. Items 818 to 829 comprise claims in respect of "Estate External, Preliminary Costs & Additional Costs". The total claimed at least in the latest version of the draft Amended Particulars is just over £4,500,000. It is clear that, although there are nominally some 750 defects pleaded in respect of the flats, they mostly comprise generic defects, including:

(a) "inadequate insulation in partition" in bathrooms;

(b) shower "plasterboard partitions" in bathrooms;

(c) "various earthing, wiring, isolation and earth leakage"

4. The case has been case-managed by His Honour Judge Wilcox in whose list it is. Trial is fixed for 10 March 2008 with a hearing time of 7 days. That period allowed for the hearing is comprehensible only given that many defects are generic and that, as I was told, the parties, and the Court, have been proceeding on the basis that the large bulk of the evidence will be expert. It is still a tight timetable, however.
5. The Claimants have retained one expert, a Mr Easton, who is a chartered surveyor and has a "MB Eng" qualification; he is dealing with liability and quantum matters. The Defendant has three experts, a Mr Shaw to deal with the alleged defects (except electrical), a Mr Ford who addresses alleged electrical defects and a Mr Higginbottom who deals with quantum. It is clear that there has, until about November 2007, been extensive liaison between the experts, as ordered, which has resulted in various joint statements being produced. For reasons which I find inexplicable, there has been little or no liaison between the experts for the last two months. The discussions must be resumed forthwith.
6. Initially, Particulars of Claim were issued in July 2006 and Amended Particulars of Claim were served in November 2006. Re-Amended Particulars were served in March 2007. Various unsuccessful attempts were made by the Claimants to add new claimants. A Re-Re-Amended Particulars of Claim was served in the summer of 2007. The Defendant had joined in Costain Construction Ltd as Part 20 defendant in respect of certain alleged defects. Trial was initially fixed for January 2008.
7. At a Pre-trial review on 16 November 2007, HHJ Wilcox adjourned the trial date to March 2008 at the expense of the Claimants. Various parts of the Scott Schedule were struck out for various reasons. A mediation was to be organised. The Claimants were ordered to give specific disclosure of maintenance records and to provide further information as requested in certain respects, by 23 November 2007, failing which the claim in respect of the relevant items was to be struck out. The Claimant was ordered to "serve an up to date Re-Re-Re-Amended Particulars of Claim" which was expected to be simply an updating of the pleading. The order continued that "no amendment is permitted the effect of which would be to introduce a new item of claim or increase the quantum of an existing item of claim" without consent or the permission of the Court. It is clear that HHJ Wilcox neither sought to nor could cut out the Claimants from seeking to apply for permission to amend at any time. Further expert evidence was to be served by 25 January 2008, with supplemental liability and quantum reports limited to clarification only of any claims amended as set out earlier in the order (see above).
8. A Re-Re-Re-Amended Particulars of Claim was served by the Claimants' solicitors on 23 November 2007 which contained many of the amendments now sought to be made. Fairview's solicitors were asked to consent to the amendments but declined to do so on 3 December 2007. The Claimants issued their application on 3 January 2008. Also on 23 November 2007 the Claimants purported to provide the information which was the subject of the "unless" order. There followed in December a debate as to whether that order had been complied with.
9. Meanwhile, the mediation had proved in a limited way productive because in mid-December 2007 the parties settled with Costain in respect of specified complaints made against Costain whereby the Defendant was to pay £200,000 to the Second Claimant and Costain to pay £141,000 to the Defendant in full and final settlement.
10. A further version of the draft Re-Re-Re-Re-Re-Amended Particulars of Claim was produced on or about 21 January 2008, which has further altered the basic pleading. However, that has been the working document to which I have been referred by the parties. I will refer to it as the "RePsoC".
11. In the absence of HHJ Wilcox until late February 2008, I have been allocated the task of case managing this claim.

The application to amend

12. There are numerous amendments which the Claimants seek to make, many of which are not opposed. However, there are also many which are opposed; these have been referred to in argument as relating to:

(a) NHBC Requirements;

(b) Preliminaries;

(c) Electrical defects;

(d) Plasterboard defects;

(e) Room changes;

(f) Deviations from joint statements;

(g) Claim shifting from Second to First Claimants;

(h) Miscellaneous.

I will deal with each in turn. As indicated to the parties at the conclusion of the adjourned hearing on 29 January 2008, I am prepared to grant permission to amend on all aspects subject to certain constraints. I proceed upon the basic principle that amendments ought in general to be allowed to enable the real disputes between the parties to be adjudicated upon unless there is prejudice to the other party which can not be compensated for by a costs order or unless there is harm occasioned to the administration of justice (see notes to CPR 17.3.5).

(a) NHBC Requirements

13. In the RepsoC, the Claimants seek to allege that Fairview is additionally in breach for failing to comply with the NHBC Technical Requirements. They had always pleaded (at Paragraph 4) that there was an implied term that Fairview would cause the works to be carried out in a "good and workmanlike manner, with good and proper materials and to the relevant British Standards and/or the equivalent European Technical specification and/or in accordance with the Building Regulations". They wish to add that the works were to be carried out "in accordance with the NHBC Technical Requirements". An earlier plea for which leave had historically been given was that Fairview owed the First Claimants a duty under the Defective Premises Act 1972. The Scott Schedule is amended in draft to plead in a number of respects that NHBC Requirements have not been complied with. There had been some complaints in the Scott Schedule which had already previously pleaded non-compliances with such NHBC Requirements; for instance, Item 50 and 51 pleaded a breach of "NHBC 7.2-D12".
14. Mr Letman for Fairview objects on the basis that it is too late, his experts can not deal with them in time and most importantly the claim that there is an implied term requiring compliance with the NHBC Requirements is untenable. He argues that, although the agreements for lease indicate that in effect Fairview will procure that the "NHBC Builddmark Scheme" will apply to the demised premises, all that this promises is that the stand alone NHBC Scheme will apply. There is no dispute that, by this Scheme underwritten by the NHBC the developer undertakes that the dwelling has been built in accordance with the NHBC Requirements.
15. In my view, it is reasonably arguable that by implication the NHBC Requirements apply. I will certainly not decide this point now but it is arguable because the agreements for lease are predicated upon the basis that the NHBC Landmark Scheme will apply; in practice this is usually set up by the developer. That scheme imposes obligations on the developer or contractor to comply with the NHBC Technical Requirements. It is also arguable that as the NHBC Requirements are arguably simply reflections of proper standards of workmanship, design and materials, they provide a helpful tabulation of proper standards, which in effect are already pleaded.
16. The experts on both sides have had already plenty of opportunity to consider in detail the alleged defects and responsibility for them if any. In practice, given that the NHBC Requirements are well known, it will not be a major imposition for them to have to consider the alleged defects in question, many of which are repetitive types of defect. There should be plenty of time for them to do so. Any wasted costs can be compensated for by an appropriate order.
17. It follows that this series of amendments should be permitted to be made.

(b) Preliminaries

18. Whilst it may well be the case that HHJ Wilcox understandably discouraged any amendments which materially increased the sum claimed, this amendment relates to the preliminary costs which the remedial works contractor would charge. This is covered in Item 829 of the Scott Schedule. The figure in the last approved amendment was £695,851; the amendment proposed is to increase that figure to £826,769. In the proposed amendment, there is no breakdown but Mr Pennicott QC produced a detailed breakdown which with three (two scaffolding and a fire equipment) items taken out produced the requisite total. On any simple analysis, this predicates a remedial contract period of 78 weeks. It contains a number of items of cost under three heads; site staff, site accommodation and contract running costs. Most of the items appear to be wholly typical preliminary type costs. I was told and accept that no remedial works have been carried out yet.
19. From the 3^rd statement (dated 2 January 2008) of Mr Fairweather, the Claimants' solicitor, which I have no reason to doubt, it is the case that the Claimants' quantum was predicated upon the basis that the individual tenants' remedial works would be carried out upon the basis they would each carry out their own remedial work. The quantum experts have however latterly agreed that costings should be done on the basis of the use of a single contractor. The agreement was dated 10 October 2007.
20. Whilst it is a reasonable inference that the use of a single contractor for remedial works as opposed to the use of multiple contractors should reduce the preliminary costs, Mr Letman voices the suspicion that, as the sum has superficially increased by some £130,000, the Claimants are using the quantum experts' agreement to increase their preliminaries claim. Mr Fair-weather in his 4^th statement says that in fact the total for preliminaries was originally £1,257,000, the implication being that some of the preliminary costs were contained within specific work costings and that these have been removed and brought under one preliminary costs banner; therefore he says that overall the sum has been reduced. Whilst I make no finding as to whether this explanation is true, it is not an unrealistic explanation and, for the purpose of this application alone, I accept it.
21. Mr Letman also objects to this amendment because it comes with insufficient explanation as to how the period of 78 weeks is calculated. He points to what he says are confusing explanations: in files of quantum information served on 12 November 2007 from Mr Easton, two programmes are served which show periods of 58 and 64 weeks for the High and Low Rise Blocks respectively. (those programmes are reasonably comprehensible in my view). In an email dated 17 January 2008 from Mr Fairweather to Mr Zetter of the Defendant's solicitors, some confusion is engendered because, although he supports the 58 and 64 weeks programmes, he says that the 80 or 78 weeks periods used in earlier programmes for proposed remedial works "are irrelevant". He explains however that 17 weeks are required to redecorate the staircases and suggests that there might well be some but not complete overlap between the two main periods.
22. The amendment should be allowed. It is clear that the most recent breakdown of the preliminary costs was provided to the Defendants by 23 November 2007 and possibly earlier. The need to review the preliminary costs arose out of the experts' discussions and their agreed change of approach. It would be wrong to prevent the Claimants from pursuing an amended claim for preliminaries to reflect that agreement. The Defendant and its expert team have had sufficient time to review how long the claimed remedial works are likely to take and what preliminary heads will be required. If there is some confusion as to how the 80 week remedial work period is assessed, that can readily be clarified by discussions between experts. In cases of this sort, there can rarely be a justification for position taking and for not having the experts talk so as to clear up any possible confusion as to what a particular expert really means. The type of items in the preliminary costs and the periods are well within the capabilities of any reasonable quantum expert to review (even at short notice) in construction defects cases.
23. The only caveat is that the amendment should be allowed with an added reference to what is the breakdown relied upon, namely that which was shown to me, albeit with the three items no longer relied upon deleted.

(c) Electrical defects

24. Electrical defects are pleaded in respect of all the flats. The quantum initially put against each of them seems to have been £1000 which is said to have been Mr Easton's "ball-park" figure. This, as Mr Fairweather says in his 3^rd statement, was predicated upon the basis of four electrical tests done in four flats. During discussions between the experts, it became clear, at what seems to have been a fairly late stage, that the Defendant's expert did not accept that the four tests were representative. I am told by Mr Pennicott QC on instructions that the Defendant's expert suggested in September 2007 that more tests be carried out; that I do not understand to be disputed, although it is not conceded expressly that reports were prepared at the suggestion of the defendant's expert. It is not accepted that he was invited to attend the further tests, as Mr Pennicott QC suggested, on instructions, also happened.
25. In any event, following those expert discussions, the Claimants did instruct an electrical contractor, MJ Wilcox Electrical Contractors Ltd ("MJW"), to carry out tests at a further 56 flats in October and early November 2007. Copies of the detailed inspection reports were submitted to the Defendants in batches in October and the first part of November 2007. Although all the tests were physically carried out by more than one person, there was one person in charge; that appears to have been Mr Wilcox. I am told that a typical report is that dated 24 October 2007 relating to 28, Langbourne Place. This indicates various faults in and "Observations and recommendations for Actions to be Taken" box. In that and the "Summary of the Inspection" boxes, the following is said:

"1. Ensuite fan not working.

2. 230v fan in Zone 1.

3. Single socket in airing cupboard poorly terminated.

4. No earth fly leads to metal back boxes.

5. Kitchen ring circuit incorrectly wired spurs off of spurs.

6. Shower pull cord indicator not working

7. No fan isolators fitted.

8. Distribution not correctly identified or labelled, also requires an insulating back plate and fire barrier.

9. CPC's not correctly terminated in plasterboard switches.

10. Smoke alarm requires terminations checked and base fitted.

11. Unknown condition of Hob outlet plate/Cooker fusing.

12. Many cord grips have been removed or damaged.

13. No ID on RCD CPC.

14. No visual 4mm2 CPC around bathroom.

15. Many electrical appliances/equipment in the wrong zones in bathrooms.

16. CPC's twisted together throughout."

26. The Claimants seek leave to amend the Scott Schedule to increase the quantum to £3,295 and £2,150 for the High and Low Rise Blocks respectively by reference to these reports and to a broken down quote from MJW dated 22 November 2007, copied to the Defendant's solicitors. This quote in broad terms gives prices for the generic defects identified in the MJW reports.
27. Mr Letman argues that this application is too late. His electrical expert, Mr Ford, he contends, would need to visit each of the 56 flats to cross check the reports and there is insufficient time before the trial to do that and for him to prepare reports. He also points out that, as Mr Easton is not an electrical expert, either the Claimants will not have an electrical expert or they will have to rely upon Mr Wilcox as a hybrid type of expert.
28. I consider that Mr Letman is being too pessimistic. The experts have been considering some generic electrical defects in any event. The experts seem to have been agreed that further tests should be done. Whilst that could have been proceeded with fractionally faster than it was done, there is no reason why, assuming that access is given to as many flats as Mr Ford wishes to inspect (and I find it difficult to believe that he will need to inspect each of the 56 flats tested by MJW), he can not cross check the MJW reports. As the defects are generic defects, he can begin to form views as to responsibility very soon; for instance, there may be for one or more of the alleged faults a fairly obvious point that they are fair wear and tear.
29. It would be unfair to disallow this amendment given both that it has at least to a large extent arisen out of the experts' suggestions in about September 2007 that more tests be carried out and that there is enough time before trial for Mr Ford to check a sufficient number of the flats to form a comprehensive view as to whether there is liability and for Mr Higginbottom to form a view as to costing. To protect against possible prejudice, I order that:

(a) The Claimants serve such expert evidence relating to electrical defects within a week, that is by 5 February 2008 4.30 pm.

(b) Reasonable requests by the Defendant and its experts for access to the flats should be acceded to promptly.

(c) At the special Pre-Trial review hearing which I have reserved on 14 February 2008, I will review progress on this aspect of the matter, with the option of adjourning the hearing of all or some of the electrical defects claims possibly at the expense of the Claimants. This is a justified approach given that the seven day period for the trial is in any event an ambitious one.

If reliance is to be placed upon Mr Wilcox or an MJW representative as expert, somewhat more may well be required to seek to demonstrate default than is simply contained in the test reports; I leave that however to the Claimants.

(d) Plasterboard defects/(e) Room changes

30. As both these types of proposed amendments relate to plasterboard complaints, I will address them together. There were in the already amended Scott Schedule a large number of complaints about "inadequate insulation in [plasterboard] partitions" and there were complaints, obliquely, about "plasterboard partitions" sometimes with the word "incorrect" added (these relating to the use of allegedly non-waterproof plasterboard). The amendments seek to add a complaint in about 40 cases that the plasterboard partitions were "incorrect", which in context means that they were allegedly not waterproof. Some of the room locations are altered in the draft RePsoC in circumstances where the room complained was related to the "Bathroom" or "Bathroom Ensuite" whereas in the proposed amendment it becomes "Bathroom Ensuite" or "Bathroom", given that the flats have two bathrooms. The quantum on all the plasterboard items is substantially reduced in the proposed amendments. It is likely to be the case, as I was told, that the proposed amendments do not account for any additional quantum as the plasterboard would have had to be replaced, it is said, to put right the originally pleaded complaints.
31. Mr Letman, on behalf of the Defendant objects to these amendments on the grounds that they are too late and his liability expert will not have sufficient time before trial to sample and check the locations of the new complaints.
32. Again, I consider that Mr Letman's pessimistic approach is unfounded. Previously, his expert sampled two out of about 100 areas of plasterboard to check whether the plasterboard was waterproof. Mr Letman told me that those tests have been done and have revealed that the sampled plasterboard was waterproof; a report is due soon, he says to confirm this. Provided access is provided to a few flats soon, there is no good reason why further samples can not be obtained and tested in fairly short order and a report submitted well before trial. Similar conditions to those set out at Paragraph 29(b) and (c) apply.

(f) Deviations from joint statements

33. The only remaining series of items in issue on this head of amendment relates to various plasterboard complaints in which the quantum sought to be claimed has become £3,645. Examples are Items 605, 609 and 610. A detailed breakdown (with some 26 items in it with rates and descriptions of work and materials) was shown to me which, I was told, had been provided to the Defendant or its quantum expert in November 2007.
34. The Defendant objects on the ground that this new figure is inconsistent with what was set out in the experts' joint statement, dated 10 October, 2007 and the claim in the amended figure would be doomed to failure or it is embarrassing to have to deal with it.
35. I am not satisfied that there is necessarily an inconsistency. The joint statement identifies very limited agreements about the plasterboard items: there is agreement about prices being related to the use of a single contractor for remedial works and the use of agreed labour rates and material prices. There is no agreement about what the plasterboard complaints should be priced at. In the "Matters not agreed" part of the statement, appear these entries:

"60 no Plasterboard partitions… Whilst the Claimants' costing of these works has significantly reduced (from £4,839 down to £1,421.58) the quantum of this claim has not been finally agreed, as the experts have not reached agreement over the duration…for each element of the works…

27 no Plasterboard/insulation to bathroom/shower… Whilst the Claimants' costing of these works has significantly reduced (from £8,899) down to £258.58 the quantum of this claim has not been finally agreed, as the experts have not reached agreement over the duration…for each element of the works…"

It all depends what "these works" mean in this context. It would be slightly surprising (if not unheard of) if an expert had agreed that the quantum was worth no more than £x and came along a few weeks later and asserted that it was £30x. I am not prepared to accept at this stage that, based on entries in a "not agreed" part of a joint statement, the Claimant's expert either did or intended to agree the lower figures for the work which he considers necessary to put right the alleged defects. If I am being insufficiently robust about this at this stage, it will of course be open to the Defendant's Counsel at trial to cross examine him as to his credibility on this topic. It would be wrong to cut out the Claimants from seeking to rely upon what they believe to be the bona fide evidence of their expert by reason of some possible inference that he (only) might be going back on something he signed up to in a joint statement.

36. I will therefore allow this amendment. It is not seriously argued that there is any prejudice flowing from this series of amendments.

(g) Claim shifting from Second to First Claimants

37. These amendments relates to various common losses which were claimed by the Second Claimant but which are now sought to be claimed by the individual Claimants. These are claims for the costs of accommodation and removal and storage of furniture during the remedial work and for the loss of rental in respect of owners who let out their flats. Objection is taken on the basis that they are inadequately particularised and that in the light of the unmeritorious claim for these heads by the claimant company "the Defendant has assessed its position accordingly". Against those points, the Claimants say that it was obvious that the wrong Claimant was claiming for these types of loss and the quantum is sufficiently particularised.
38. These amendments should be allowed. The heads of claim were always pleaded albeit by a party which at least superficially would not suffer the loss; the Defendant itself through Mr Zetter say that the claims by the Second Claimant were obviously without merit. The heads of claim are very common ones when individual claimants are asserting that they have to vacate their houses during remedial work. They are relatively easily checked. For instance, the need to remove and store an average flat's furniture (and the costing thereof) is eminently researchable in fairly short order; the period of 6 weeks can be readily assessed. There is no real prejudice here. If the Defendant feels it necessary to "re-assess" its position, it can do so in ways in which its costs position can be protected.

Miscellaneous

39. There were several other amendments which were objected to albeit they were not pressed by Mr Letman. For instance, it is argued that claims for overheads and profit at 10% on the remedial work cost is a new claim. That may be but it can relatively easily be dealt with by the quantum experts as it is the stuff of what their expertise is. If the Defendant wishes me to address any other amendments in this judgment other than those which I have addressed specifically up to this point, I will do so separately.

Claimants' application for leave to adduce in evidence a quantum report of their expert, Mr Easton

40. Three files of workings by Mr Easton were served on the Defendant in mid-November 2007. It is by no means certain that the Claimants needed leave to serve these files in the light of the judge's order of 16 November 2007. The files comprise Mr Easton's detailed costings and specifications for the remedial work which he is propounding. There are no prose explanations and no financial collections. That said, it is relatively clear what the documents are.
41. Objection is taken by the Defendant in effect upon the ground that the information is presented in an incomprehensible way which is difficult to correlate to the claim.
42. I have formed the view that this objection is in substance unfounded. First, even if the Defendant's expert found the information confusing, all that he had to do, and should have done, was to contact the Claimants' expert and asked for an explanation. Secondly, the information, whether ultimately proved to be justified or not, is reasonably clear. For instance, there is a repetitive item totalling £1003.95, which relates to "Ensuite (Extra over for plasterboard works etc") which obviously relates to the "incorrect plasterboard items" similarly priced in the RePsoC. Detailed breakdowns are provided against largely repeated items throughout these files whilst specifications are also provided. It is not usually for the Court to dictate how expert evidence is to be presented. Although some prose explanation and some arithmetical collections would have been helpful, the fact that they have not been provided should not mean that the Claimants should be barred from adducing the information provided.

Strike-out

43. Ultimately, in the light of my decision in relation to amendments, there was only one item left which the defendant sought to strike out. This related to Item 826 which relates to an allegedly leaning boundary wall for which remedial works are described in the Scott Schedule as "Insert rock anchors" and the sum of £20,000 is claimed. The Claimants were ordered by HHJ Wilcox on 16 November 2007 to provide, by 23 November 2007, the further information requested in Requests 66 and 67, failing which in effect Item 826 would be struck out. The information requested was to provide a full cost breakdown and to confirm a schedule of work. The answer was provided by Mr Fairweather on 23 November 2007 as follows:

"Mr Easton has allowed 10 anchors @ £2000 each at one metre centres. The cost per anchor is taken form SPONS [a well known pricing publication].

No schedule of works is required, they are just rock anchors."

44. I have formed the view that this is an unsatisfactory answer which does not comply with the learned judge's order. Rock anchors are usually used in rock, often in tunnels: holes are drilled for varying distances, a bolt inserted in to the hole, the hole filled sometimes with resin or grout and the other end of the bolt fixed or attached to the structure which needs supporting. The use of rock anchors in East London, an area more known for London Clay, is at first blush surprising but it may be that there is some rock in the area of the flats. Any schedule of works needs to identify what material will be used (e.g. stainless steel, alloys, concrete, grout, resin), the depth and angle for the anchors and preparatory work (e.g. excavation, hole drilling, support of the wall). Mr Easton has produced detailed schedules of work for numerous other items. There is no good reason which has been advanced why there has been no such schedule produced in this case. The reference to SPONS is only to identify the overall market price and not the schedule of work.
45. This item, 826, should be struck out.

General

46. I have formed the view that it is now necessary for both sides and their experts in this case to cooperate and embark upon a period when what I called in argument "ultra-efficiency" was to be applied. It would be better if there was a concentration upon trial preparation. The experts must resume talking and producing further joint statements to assist the parties and the courts. At the Pre-trial review now fixed for 14 February, I will review, in HHJ Wilcox's absence, where the parties have got to and what needs to be done at and for the trial. I will consider the question of costs of and occasioned by the amendments secured by the Claimants and of the application, albeit that I gave some provisional indications in that context at the hearing.