Bella Casa Ltd v Vinestone Ltd and Others
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Peter Coulson QC |
| Judgment Date | 09 December 2005 |
| Neutral Citation | [2005] EWHC 2807 (TCC) |
| Docket Number | Case No: HT-04–200 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 09 December 2005 |
[2005] EWHC 2807 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
His Honour Judge Peter Coulson QC
Case No: HT-04–200
Ms Finola O'Farrell QC provided written submissions on behalf of the Claimant
Mr Stephen Walker provided written submissions on behalf of the Second Defendant
Ms Rachel Ansell provided written submissions on behalf of the Third Defendant and Part 20 Claimant
Mr Justin Mort provided written submissions on behalf of the Part 20 Defendant
) By a claim form dated the 30th of June 2004, the Claimant, Bella Casa Ltd ('BCL'), a company registered in the Isle of Man, commenced proceedings against three Defendants in respect of alleged defects in the design and construction of refurbishment works at Flat 5, 21 Dean Street, in Soho ('the property'). The freehold owners of the property were the Soho Theatre Company ('STC'). The First Defendants, Vinestone Ltd ('Vinestone') were the head lessors of the property. By a contract dated 14/10/98, Vinestone agreed to grant a long lease to BCL in respect of the property and also agreed to procure the carrying out of the refurbishment works. The Second Defendants, Paxton Locher Architects Ltd ('PLA') were the architects employed by both STC and Vinestone to design, inspect and administer the refurbishment works. The Third Defendants, Duffy Construction Ltd ('Duffy') were employed by STC to carry out the refurbishment works.
) There are also a number of Part 20 claims. For present purposes, it is only necessary to refer to the Part 20 proceedings commenced by Duffy on the 28th of February 2005, against Faberdex (Installations) Ltd ('Faberdex'), the sub-contractor who carried out the design, manufacture, supply and installation of the glazing at the property.
) BCL's principal complaint against each of the Defendants is to the effect that the refurbishment works were incomplete and defective. In consequence, they claim damages for breach of contract and/or for breach of statutory duty pursuant to the Defective Premises Act 1972 against Vinestone, in the total sum of £961,220.65. Against PLA, BCL claim damages for breach of duty at common law and/or for breach of statutory duty pursuant to the Defective Premises Act 1972, in the total sum of £921,680.74. Against Duffy, BCL claim damages for breach of statutory duty pursuant to the Defective Premises Act 1972, in the total sum of £763,010.40. That is the claim which Duffy then pass on to Faberdex.
) Although, as I have noted, the quantum of BCL's claims varies from Defendant to Defendant, there is one important constant: a claim, said to be for loss of use, which is expressed in these same terms at paragraphs 40.2, 42.2 and 44.2 of the Particulars of Claim:
"BCL's consequential costs:
(A) Loss of use. As a result of the defects set out above, in particular the defective gas installation, the water ingress, inadequate heating, electrical faults and inadequate safety provision, BCL was unable to use the Property for human occupation until the completion of the remedial works. BCL has therefore been deprived of the use of the Property and claims:
(i) Interest on the balance of the purchase price and other costs paid on or about completion (£1,232,387.26 set out in Appendix 12) from 16 July 1999 until 18 December 2002 when the Property became fit for human habitation apart from the defects to the common parts, £341,962.14.
Particulars:
(a) Balance of purchase price £1,034,000 from 16 July 1999 to 18 December 2002 at 8%.
(£82,720 per annum) £283,291.18
(b) Other costs paid following completion, £198,387.20 as set out in Appendix 12 hereto at 8%.
(£15,870.98 per annum) £58,670.96
Total: £341,962.14.
(ii) Service charge for the property from 1st August 1999 to 18th December 2002:
Particulars:
1/8/99–31/7/00
£2,382.98
1/8/00–31/7/01
£5,882.38
1/8/01–31/702
£7,943.60
1/8/02–18/12/02
£2,238.81
TOTAL: 18,447.77
) The claim for interest at 8% was the subject of a request for further information by PLA. The request, and the answer, were as follows:
"Of: Paragraph 42.2 sub-paragraph(1)
Request
8. Please explain how the figure of 8% for interest has been arrived at and set all facts and matters relied upon in support of such figure as the loss consequent upon the alleged breaches.
Reply
8. The interest rate of 8% was based on the Judgment Rate of interest for the relevant period."
) In addition to the two express loss of use claims set out at Paragraph 4 above, the pleaded claims against each of the three Defendants contain, at Paragraphs 40.6, 42.5 and 44.5 of the Particulars of Claim respectively, a further claim for £5,348.35 in respect of "the expenses incurred by the Claimant when it was unable to occupy the property as particularised in Appendix 14." These charges are made up of utilities bills, for water, electricity and the like, and sundry other charges for services like satellite television.
) It is these three claims, set out at Paragraphs 4–6 above, which form the subject matter of this Judgment. I have referred to them generically in this Judgment as BCL's loss of use claims.
) After a rather leisurely start to the proceedings, the parties started to focus on the real issues between them and, at a Case Management Conference on the 23rd of September 2005, I was asked by the Defendants to order the trial of certain preliminary issues. These applications, made late and with little notice, were opposed by BCL. I concluded that, with one exception, the hearing of the proposed Preliminary Issues would not save time and/or costs and thus did not fall within the guidelines set out in Sections 8.1–8.4 of the second edition of the TCC Guide. I therefore refused the bulk of the Defendants' applications.
) The exception to this concerned BCL's loss of use claims outlined in Paragraphs 4–6 above. The Defendants' contention was that, even assuming the correctness of all the facts pleaded by BCL, these claims could not succeed as a matter of law. Given the size of the loss of use claims, especially when compared to the overall value of BCL's claims against the Defendants, it seemed to me that this issue could usefully be taken as a Preliminary Issue. I therefore made that order. In doing so, I had in mind the words of David Steel J in McLoughlin v Jones [2002] 2 WLR 1279 at 1298 when he said:
"In my judgement, the right approach to preliminary issues should be as follows:
(a) Only issues which are decisive or potentially decisive should be identified.
(b) The questions should usually be questions of law.
(c) They should be decided on the basis of a schedule of agreed or assumed facts.
(d) They should be triable without significant delay, making full allowance for the implications of a possible appeal.
(e) Any order should be made by the court following a case management conference."
) I ordered that the parties should provide written submissions on the Preliminary Issue by 14/10/05, with short reply submissions to be provided by 28/10/05. No oral hearing was requested or required. I indicated that Judgment would be provided about a month or so after the reply submissions in order to ensure that the resolution of the point of law relating to the loss of use claims would not cause delay to the action as a whole.
) Written submissions on the preliminary issue were provided by 14/10/05 on behalf of BCL (Ms Finola O'Farrell QC), PLA (Mr Stephen Walker), Duffy (Ms Rachel Ansell), and Faberdex (Mr Justin Mort). Short submissions in reply were provided by BCL, PLA and Duffy. BCL and Duffy also produced short notes on one specific point that arose out of my researches on the law, such notes being provided on 6/12/05. Vinestone have indicated by letter that they rely on the submissions made by the other Defendants. I am extremely grateful to all Counsel for their clear and concise guidance on the points of principle which have arisen between the parties concerning the loss of use claim. I set out the Preliminary Issue and the assumed facts in Section B below and I analyse the nature of BCL's claim for loss of use in Section C below. Thereafter, at Section D, I analyse the court's treatment of loss of use claims in building cases before, at Section E below, reviewing the loss of use claims in other kinds of civil/commercial litigation. My conclusions are set out in Section F below.
B) THE PRELIMINARY ISSUE AND THE ASSUMED FACTS
) The Preliminary Issue was defined as follows:
"Assuming the facts pleaded in the Claimant's Particulars of Claim are correct, are the points in Paragraph 101 of the Second Defendant's Defence correct and do they provide a complete defence to the claims made in Paragraphs 40.2, 40.6, 42.2, 42.5, 44.2 and 44.5 of the Particulars of Claim?"
) I have already set out the relevant paragraphs of the Particular s of Claim in Paragraphs 4 and 6 above. Paragraph 101 of PLA's defence reads as follows:
"Further and without prejudice to the forgoing, it is specifically denied that BCL is entitled to recover the sums claimed in sub-paragraphs 42.2 and 42.5 or any similar sums contained elsewhere. BCL alleges that the said sums represent 'loss of use' by which PLA understand BCL to refer to loss of use of the Property. PLA deny that such sums are a consequence of any loss of the Property. The claim is for loss of the use of the money necessary to complete the purchase of the property and to continue to own the Property. It is denied that such costs represent a recoverable loss because:
(i) The costs do not represent...
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Cunningham v Collett & Farmer
...recorded in the reported cases. An analysis of awards of general damages in this sort of situation can be found in my Judgment in Bella Casa v Vinestone [2006] BLR 72; [2006] T.C.L. R. 2. In line with those authorities, had a claim been made out, I would have awarded Mr Cunningham and Ms Go......