Crest Nicholson Operations Ltd v Grafik Architects Ltd
| Jurisdiction | England & Wales |
| Judge | Sarah Watson |
| Judgment Date | 10 November 2021 |
| Neutral Citation | [2021] EWHC 2948 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-2019-BHM-000005 |
[2021] EWHC 2948 (TCC)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN
BIRMINGHAM TECHNOLOGY AND
CONSTRUCTION COURT (QBD)
Birmingham Civil and Family Justice Centre
Priory Courts
33 Bull Street
Birmingham
B4 6DS
HER HONOUR JUDGE Sarah Watson
Case No: HT-2019-BHM-000005
Mr Andrew Singer QC (instructed by Gateley Plc) for the Claimant
Mr Samuel Townend QC and Mr Tom Coulson (instructed by in house counsel) for the Second Defendant
Hearing date: 30 September 2021
INTRODUCTION
This is an application to strike out a claim pursuant to Civil Procedure Rule 3.4(2) on the basis that it discloses no reasonable grounds for bringing the claim and/or because it is an abuse of process.
The Claimants, Crest Nicholson Operations Limited and Crest Nicholson (South West) Limited (together referred to as “Crest”) were developers of a residential apartment building at The Quays, Portishead. The First Defendant is the architect who designed the development. It is not party to the application. The Second Defendant is NHBC Building Control Services Limited (“BCS”). Crest engaged BCS to carry out the services of an Approved Inspector for the development.
The claim concerns defects in the external wall systems of the development, which Crest claims constitute breaches of the fire safety requirements in Part B of the Building Regulations which were current at the time of the design and construction of the development. The building is over 18 metres in height. In particular, Crest alleges that there are defects as a result of the incorporation of combustible phenolic insulation and non-compliant Parklex cladding and also that the design and installation of the cavity and fire barriers was defective. Crest refers to those defects as the “Cladding Defects”. In addition, Crest alleges that there were defects in the render system because expanded polystyrene (“EPS”) was used in the render system below 18 metres, despite the fact that EPS is not of limited combustibility, as defined in the relevant Building Regulations. In addition, Crest alleges that the design and installation of cavity and fire barriers was defective. Crest refers to those defects as the “Render Defects”. The Render Defects are the main defects about which Crest complains.
In late December 2019, BCS's parent company, NHBC, which provided the warranty for the development, accepted claims from owners on the basis that the development does not comply with Building Regulations. NHBC has a right to reclaim its costs from Crest. Crest's claim is to recover significant losses in meeting the remedial costs. It seeks to recover those costs from the First Defendant and from BCS. Its claim against BCS is for breach of contractual and tortious duty for failing to identify, and notify Crest of, the defects. There is also a claim for a contribution against BCS on the ground that it is liable to the building owners for the same loss as that for which Crest is liable. However, Crest has recently confirmed that the contribution claim will not be pursued against BCS and concedes that its Particulars of Claim should be amended accordingly.
The history of the litigation is as follows.
a. On 19 February 2019, Crest issued a protective claim for limitation reasons. It had not complied with the pre-action protocol before doing so.
b. On 18 June 2019, the first of several consent orders was approved, extending time for service of the Claim Form to enable the pre-action protocol to be followed.
c. On 5 July 2019, Crest served a protocol-compliant letter of claim on BCS.
d. On 6 September 2019, BCS responded to the claim. In that letter, it noted that it appeared that there had been no expert input into the claim.
e. On 26 November 2019, Crest's solicitors wrote to BCS stating that they had since instructed Mr Easton as their expert. In that letter, they asked for information that Mr Easton had requested for the purposes of preparing a report on the question of whether BCS was in breach of its duties as Approved Inspector. They also indicated that his provisional view was that BCS's performance was poor.
f. On 20 December 2019, NHBC accepted policyholders' claims on the basis that the development did not comply with Building Regulations.
g. On 27 March 2020, Crest's solicitors chased for an answer to the questions raised by Mr Easton.
h. On 1 May 2020, BCS responded, saying that it would not respond to the questions raised.
i. On 20 May 2021, Crest served its Particulars of Claim.
j. On 22 July 2021, BCS issued this application. Unusually, it did not make any formal or informal request for further information before doing so. Nor did it notify Crest of its intention to make the application.
There are two grounds on which BCS argues the claim should be struck out, being that the Particulars of Claim do not sufficiently particularise the alleged breaches of duty to enable BCS to understand the case it has to meet and that the claim is not supported by expert evidence. It argues that, as a result, the claim discloses no reasonable ground for bringing the claim and should be struck out. BCS had also sought to strike out the claim for a contribution on the basis that it had no liability to Crest's successors in title as a matter of law. That part of the application is no longer relevant because Crest has confirmed it no longer pursues that part of the claim.
FIRST GROUND: LACK OF PARTICULARITY
The law
The parties have both referred me to the case of Pantelli Associates Ltd v Corporate City Developments Ltd [2011] PNLR 198. In that case, in response to a claim for payment, the Defendant made allegations of professional negligence against a quantity surveyor. The allegations of negligence are set out in paragraph 9 of the judgment of Coulson J. They consisted of no more than a list of the duties and an assertion that the Claimant had failed in the performance of those duties. There were no allegations setting out the factual basis of the claim.
Mr Townend relies on the following passage from the judgment:
“ 11 CPR r 16.4(1)(a) requires that the particulars of claim must include “a concise statement of the facts on which the claimant relies”. Thus, where the particulars of claim contain an allegation of breach of contract and/or negligence, it must be pleaded in such a way as to allow the defendant to know the case that it has to meet. The pleading needs to set out clearly what it is that the defendant failed to do that it should have done, and/or what the defendant did that it should not have done, what would have happened but for those acts or omissions, and the loss that eventuated. Those are “the facts” relied on in support of the allegation, and are required in order that proper witness statements (and if necessary an expert's report) can be obtained by both sides which addressed the specific allegations made.
“12 It is plain that, on any view, the amendments contained in paragraph 16 of the amended defence and counterclaim do not begin to meet the test in r16.4(1)(a). It is impossible for anyone to work out from those generalised and generic allegations what particular matters were being alleged against Pantelli. It would be impossible for a solicitor to take a witness statement from those involved in providing the services in question that could hope to meet these points, because no details have been provided for a prospective witness to accept or dispute. Accordingly, para 16 is not a proper pleading of a case of professional negligence.”
At paragraph 16, the Judge said that it was: “ …simply not good enough to turn a positive contractual obligation into an allegation of professional negligence by adding the words “failing to” to the obligation”.
Mr Townend also refers me to the case of Herons Court v Heronslea and Others [2018] EWHC 3309 (TCC), in which Waksman J considered the issue of the particularity of the Claimant's pleadings in a case against BCS for breach of its duties as Approved Inspector. The Judge's comments are obiter dicta because he decided that BCS were under no duty, as a matter of law. However, he considered whether, had he decided differently, he would have struck the claim out as an abuse of process for lack of particularity. From the judgment, it appears that numerous breaches of the Building Regulations had been identified and the Claimant had initially relied on the doctrine of res ipsa loquitur in support of its allegation that the Defendant was in breach of duty as it had given approval to a development that breached the Building Regulations in so many respects. The Claimant then provided more information as to the basis of its claim in the form of an expert's report. It appears from paragraph 62 of the judgment that the report identified the applicable building standards and building control performance standards and gave examples of why the defects would breach the professional obligations of an Approved Inspector. It appears that it identified the fact that periodic inspections on site at key stages should have identified some of the defects and the expert was unable to understand how they were not observed by the Defendant. Waksman J indicated that he would have ordered proper particulars to be provided, possibly accompanied by an unless order, but would not have struck the claim out as an abuse of process. Mr Townend relies on this case as supportive of BCS argument that the particulars in the case before me are inadequate, while acknowledging the remarks are obiter dicta.
This case
BCS makes no complaint of lack of particularity as to the alleged defects. They are comprehensively set out in the Particulars of...
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