(1) Neil Holloway (2) Samantha Holloway v Chancery Mead Ltd
| Jurisdiction | England & Wales |
| Judge | THE HONOURABLE MR JUSTICE RAMSEY,Mr Justice Ramsey |
| Judgment Date | 30 July 2007 |
| Neutral Citation | [2007] EWHC 2495 (TCC) |
| Docket Number | Case No: HT-07–191 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 30 July 2007 |
[2007] EWHC 2495 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
The Honourable Mr Justice Ramsey
Case No: HT-07–191
Mr Nigel Jones QC, & Mr Alexander Gould (instructed by Mundays) for the Claimants
Mr Geraint Jones QC (instructed by the Defendant) for the Defendant
Hearing dates: 25 th July 2007
Approved Judgment
Mr Justice Ramsey
Introduction
These proceedings under part 8 of the CPR were commenced by Mr and Mrs Holloway against Chancery Mead and relate to a proposed arbitration in respect of their purchase of a property known as The Lighthouse, Fairbourne, Cobham, Surrey. Chancery Mead was the developer of the property. Under a contract for sale and purchase of property dated 8 May 2006 (“the Contract”) Chancery Mead agreed, as the Seller, to sell the property to Mr and Mrs Holloway, as the Buyer. The price was £1.95 million and completion took place on 21 July 2006.
Under the Contract, Chancery Mead undertook certain obligations, in particular under clause 20 it agreed to complete the dwelling house in a proper, neat and workmanlike manner, in accordance with certain documents including the technical requirements of the NHBC. Under clause 23 of the Contract, it was provided as follows: “The Seller is entered on the register of the NHBC and undertakes to deliver to the Buyer the Build Mark Documentation as soon as practicable after the date hereof”.
Subsequently, documentation was provided to Mr and Mrs Holloway in the form of a document entitled “NHBC Buildmark Offer” from a builder, Brodsworth Estates Limited (“Brodsworth”). Mr Duke, a director of Chancery Mead, is also a director of Brodsworth and they are, at least to that extent, connected companies.
The Buildmark Offer provided as follows: “NHBC and the Builder offer the First Owner of the Home and all subsequent Owners (within the period of cover) the protection set out in the Buildmark booklet which accompanies this document. To accept this Offer the First Owner or person authorised to act on their behalf must complete the Acceptance Form below and return it to NHBC”. It appears that the Acceptance Form was completed on behalf of Mr Holloway and signed by his solicitors, Mundays. It is dated 23 October 2006.
The Buildmark documentation contained an insurance cover given by the NHBC and it also included certain obligations upon the builder, Brodsworth. Section 1 dealt with cover before completion. Section 2 dealt with the first two years after completion and section 3 set out the cover in years three to 10. It is common ground that the current disputes between the parties relate to section 2, the first two years after completion.
Section 2 stated what the builder, Brodsworth, had to do if it was given notice of defects or damage in the property. Its obligation was “within a reasonable time and at his own expense to put right any Defect or Damage to your Home or its Common Parts which is notified to him within this period of cover”. Damage was defined as follows: “Physical damage to the Home caused by a Defect” and Defect was defined as “A breach of any mandatory NHBC requirement by the builder or anyone employed by him or by acting for him”.
Under section 2 of the Buildmark documentation, the NHBC insurance only applied if the builder did not meet its obligations under that section. In particular it provided that the NHBC would pay for: “Any arbitration award or court judgment which you obtain against the Builder relating to obligations under Section 2 which he has failed to honour”; “The Cost of any work contained in a Resolution Service report which is accepted by you and which the Builder does not complete all arrange to complete within the time set” and “If the Builder is insolvent, the Cost of any work which he would otherwise have been liable for under Section 2.”
The reference above to the Resolution Service is further elaborated in section 2. It states: “If the Builder does not deal with your complaint to your satisfaction, contact NHBC…. We will usually offer our Resolution Service.” It is then provided in the Buildmark documentation as follows: “If there is a disagreement about the Builder's obligation, we will usually try to resolve matters under our Resolution Service. See the important note below.” That is a reference to a note which says: “We will normally offer our Resolution Service. However, we can only help with disputes about Defects or Damage. We will not be able to help if you have a dispute about such matters as financial or contractual issues or boundary disputes. In these circumstances, we will suggest you consider another type of dispute resolution procedure. See complaints and dispute resolution procedures on pages 21 and 22.”
The description of the Resolution Service continues:
“When we offer our Resolution Service we will investigate any Defects or Damage which you have complained to the Builder about and which he has not put right within a reasonable time. We may need to visit your Home. We will then issue a report informing both you and the Builder of any work that he must carry out to fulfil his obligations under this Section.
The Builder must carry out the work within a reasonable period of time which will be set by an NHBC. You must allow the Builder reasonable access during normal working hours to carry out the work.
If the Builder does not carry out the work within the time set, and has not agreed a programme with you to complete the work, we will, at our option, pay the Cost of the work detailed in a report or arrange of the work to be done.
If you disagree with our Resolution Service report, there are other ways of resolving your dispute with the Builder. These are explained in the complaints and disputes procedures on page 21. Please note that the Financial Ombudsman Service cannot assist if you disagree with our Resolution Service report as it can only deal with complaints about our insurance cover.
We have no liability under this section unless we have issued a Resolution Service report which you have accepted or unless the Builder is insolvent or has failed to honour an arbitration award or court judgment.”
At page 22 of the Buildmark documentation, it then sets out as follows under the complaints and disputes procedure:
“Disputes with the Builder. NHBC's Resolution Service is valuable for resolving straightforward disputes about standards of workmanship. The details are on page 11. It is free to Owners and is generally quicker than other options.
Other options for resolving disputes with the NHBC or the Builder. The following notes give guidance on ways of resolving the different types of dispute. However you may wish to seek advice about the most suitable method to meet your specific needs.”
It then sets out under separate paragraphs Arbitration, Small Claims Court, Other Courts, other forms of alternative dispute resolution. The passage under Arbitration was obviously written before recent reforms in the TCC. It says:
“Arbitration means an independent arbitrator considers the facts of the dispute and decides how it will be settled. Arbitration has the advantage of being generally quicker than court actions and can deal with any matters provided both parties agree. An arbitrator's award is legally binding and can be enforced in the same way as the court judgment. However, as in the court proceedings, one party may have to pay the costs and arbitrator's fees. Further details are available free of charge from the Chartered Institute of Arbitrators. If after receiving details you wish to proceed the Institute will appoint an arbitrator upon your application.”
It can be seen from this that Mr and Mrs Holloway could, on giving notice to Brodsworth, have Defects and Damage made good by Brodsworth or in default of Brodsworth doing so obtain remedies from the NHBC.
The current position
Regrettably, disputes have arisen between Mr and Mrs Holloway and Chancery Mead. This has led to acrimonious correspondence between Mr Haria of Mundays and Mr Duke and Mr Geraint Jones, a director of Chancery Mead. Each party considers that the attitude being taken by the other party is unreasonable. Mr and Mrs Holloway have obtained expert reports and maintain that there are significant defects in the property. Chancery Mead say that most of the items are snagging and that they have made reasonable offers to carry out any work which they consider to be their responsibility.
On the 30 April 2007 Mundays, on behalf of Mr and Mrs Holloway, sent Chancery Mead a Notice to Refer and a draft Statement of Case seeking to commence arbitration proceedings under clause 24 of the Contract. The draft Statement of Case claimed under the following headings:
(1) Costs incurred by Mr and Mrs Holloway in rectifying the installation of a fire and in dealing with drainage problems.
(2) Costs of rectifying defects and completing outstanding works which Mr and Mrs Holloway intend to have carried out.
(3) Costs of professional fees and ancillary costs associated with the investigation and carrying out of the remedial works.
(4) Costs of rental of alternative accommodation whilst remedial works are being carried out.
(5) Costs of the removal and storage of furniture and personal effects during remedial works.
(6) General damages for distress and inconvenience.
In response, on 4 May 2007, Chancery Mead said that whilst they were content to agree to the appointment of an arbitrator, they first required Mr and Mrs Holloway to...
To continue reading
Request your trial
-
Emirates Trading Agency LLC v Prime Mineral Exports Private Ltd
...that the parties should "attempt in good faith to resolve the dispute or claim", that would not have been enforceable. 32 In Holloway v Chancery Mead Limited [2007] EWHC 2495 (TCC) Ramsey J. had to consider whether a provision in a building contract that the parties shall seek to resolve a ......
-
Tang Chung Wah (Aka Alan Tang) and Another v Grant Thornton International Ltd and Others
...(and possibly also, paid) person. 44 The Tribunal relied especially in that regard on the judgment of Ramsey J in Holloway and another v Chancery Mead Ltd [2007] EWHC 2495 (TCC), [2008] 1 All ER (Comm) 653, and in particular a passage at paragraph 81 of that judgment which, after a review ......
-
Sulamérica Cia Nacional de Seguros SA and Others v Enesa Engelharia SA and Others
...of Colman J. in Cable & Wireless Plc v IBM United Kingdom Ltd [2002] EWHC 2059, [2002] 2 All E.R. (Comm) 1041 and Ramsey J. in Holloway v Chancery Mead [2007] EWHC 2495 (TCC), [2008] 1 All E.R. (Comm) 653, in each of which the court expressed the view that an agreement to enter into a pre......
-
Sulamérica Cia Nacional de Seguros SA and Others v Enesa Engelharia SA and Others
...unqualified reference to ADR, a sufficiently certain and definable minimum duty of participation should not be hard to find. 25 In Holloway v Chancery Mead [2007] EWHC 2495, Ramsey J was faced with a clause which made "a determination by an NHBC investigator … a condition precedent to any r......
-
English Commercial Court Enforces Obligation To Resolve Disputes By Friendly Discussion Prior To Arbitration
...to be followed was that recommended by the Centre for Effective Dispute Resolution (CEDR). Also in Holloway v. Chancery Mead Limited [2007] EWHC 2495, the Court reviewed authorities concerning the enforceability of ADR agreements and agreements to agree, concluding that to be enforceable th......
-
Persuasion and Compulsion
...to enforce. They have tried to set out the minimum requirements for an enforceable clause. In Holloway & Holloway v Chancery Mead Ltd [2007] EWHC 2495 (TCC), three key requirements were stated as: 1. the mediation clause must be sufficiently certain in that there should not be any need for ......