Jane Forrest V Fleming Buildings Limited And Others
| Jurisdiction | Scotland |
| Judge | Lord Malcolm |
| Neutral Citation | [2014] CSOH 158 |
| Court | Court of Session |
| Date | 29 October 2014 |
| Year | 2014 |
| Docket Number | CA41/11 |
| Published date | 29 October 2014 |
OUTER HOUSE, COURT OF SESSION
[2014] CSOH 158
CA41/11
OPINION OF LORD MALCOLM
In the cause
JANE FORREST
Pursuer;
against
FLEMING BUILDINGS LIMITED AND OTHERS
Defenders:
Pursuer: Party
First Defenders: Broome; Macroberts LLP
Second Defenders: G Walker; Simpson & Marwick
29 October 2014
[1] The long and unfortunate history of the dispute with which this action is concerned is described in an earlier opinion of Lord Hodge [2013] CSOH 105. I heard a debate in the action. Matters did not proceed any more smoothly. At an early stage I was informed by Mr Gale, QC that, as a result of certain advice which he had tendered, Mrs Forrest (the pursuer) had withdrawn his instructions. I refused a motion by Mrs Forrest that the debate be discharged. The result is that in determining the legal issues I have the benefit of only the notes of argument lodged on behalf of the parties plus the oral submissions presented by Mr Broome on behalf of Fleming Buildings Limited (the first defenders) and by Mr Walker on behalf of the second defenders (Gibb Architects Limited). Understandably, by this stage being without legal representation, Mrs Forrest was unable to contribute on the merits of the matters at hand.
The pursuer’s averments and claims
[2] The case made on record can be summarised as follows. Through a quantity surveyor, in 2005 the pursuer and her now estranged husband instructed the first defenders to build a dwellinghouse in Bothwell at a price of just under £514,000. During the course of the work additions were agreed at a sum of almost £17,000. The contract was governed by the JCT Standard Form (1998) edition. The second defenders provided the architectural services. The pursuer and her husband became unhappy with the progress and the quality of the works. There were numerous defects. An expert opinion from Bluestone Building Surveyors was obtained. It confirmed various problems and defects. Further expert reports were obtained from Hurd Rolland Architects and from Morris Engineering Design Limited. Remedial costs were quantified at just under £400,000. The building authority has refused a completion certificate.
[3] The first defenders have been paid almost £416,000. The pursuer pleads that certain works have been omitted, giving an adjusted contract price of some £439,000. Under reference to the Hurd Rolland report, she states that the second defenders agreed to provide a full architectural service in a lead designer role. Their administration of the contract was unsatisfactory. On 19 December 2006 the second defenders issued certificate 10 valuing the works carried out at £456,000. On 21 December 2006 they issued a revised certificate 10 at £385,000. The outcome was that the first defenders were overpaid by £71,000, that sum remaining outstanding. It is averred that, after sight of the Bluestone report, the architects realised that there were defects in the first defenders’ work, hence the revised certificate.
[4] The first defenders did not progress the works. The pursuer and her husband lost confidence in the second defenders’ ability to administer the contract. By letter of 20 April 2007 their contract was terminated. They claimed entitlement to 14 days notice. Within that period two further certificates were issued. Certificate 11 valued the works at £463,000. Certificate 12 was issued the following day at a value of £508,000, and this despite the lack of any material progress in the works since the earlier valuation of £385,000. In addition the first defenders were given an extension of 37 weeks for completion of the works. It is averred that there was no proper basis for the terms of certificates 11 and 12, and that, having regard to the defects in the works, their true value is £23,684.03.
[5] Consequential upon the failure to pay in respect of certificate 12, by way of a letter dated 30 May 2007 the first defenders suspended performance of their obligations. The pursuer claims that this suspension is of no effect since the certified amount was not properly due. Furthermore the proper notice was not served in terms of clause 28 of the contract. It is averred that in any event by this stage the contract was at an end because of a collapse of mutual trust and confidence, and because of the defective nature of the works. The latter amount to breaches of contract which have caused loss and damage to the pursuer and her husband. The second defenders are criticised for issuing certificates 11 and 12. Furthermore they knew or ought to have known that an extension of time of 37 weeks would prevent the pursuer and her husband from claiming damages for delay in completion. The certificate should not have been issued after notice had been served terminating the architects’ contract. Thereafter their mandate was limited to handover arrangements. They had no power to issue the certificates, failing which they were issued in breach of a duty of reasonable care towards the pursuer and her husband. In these circumstances the first conclusion seeks reduction of certificates 11 and 12.
[6] The pursuer also pleads that she is entitled to compensation in respect of loss suffered as a result of the defenders’ breaches of contract. The project was funded by an overdraft from a savings bank, which was repayable on demand. As a result of the overrun and other problems, the bank demanded repayment. To raise money, in April 2007 the house was sold for £125,000 to a company owned by the pursuer’s father. The pursuer avers that this sale was “not for value”. She claims that had the contracts been performed properly, at this stage the house would have been worth £730,000, and could have been sold on the open market at that price. Accordingly the defenders’ breaches of contract and negligence have resulted in a diminution of the value of the subjects, hence the second conclusion for payment from the defenders jointly and severally of £605,000. There is also a claim in respect of anxiety and distress in the sum of £20,000.
[7] The action also concerns a claim by the pursuer for payment by the second defender of £150,000. This is based upon earlier court proceedings in which the pursuer sought to reduce an adjudicator’s award of some £112,500 in favour of the first defenders. The challenge was unsuccessful. It is averred that had certificates 11 and 12 not been issued, those proceedings and the resultant costs awarded against the pursuer would not have occurred. The costs are estimated at £150,000.
[8] The pursuer also pleads that on 15 December 2009 her husband assigned all his rights of action to her, the assignation being intimated to the agents for the defenders. Early in the debate, on behalf of the pursuer Mr Gale intimated that he was not relying upon the assignation. As already mentioned, his instructions were subsequently withdrawn. However, at the start of the second day of the debate, Mr Forrest was present in court. Mrs Forrest tendered a document by way of a notice of sist, with a view to the court allowing him to become a pursuer in the action. I was not satisfied that Mr Forrest had received appropriate legal advice on the matter. The motion was opposed and my attention was drawn to certain procedural informalities. In the whole circumstances I was not prepared to grant the motion at that stage. Counsel for the defenders had presented an argument based upon all parties not having been called, a submission which could not be maintained if Mr Forrest became a party to the action. Mr Broome had also challenged the competency of the assignation given the terms of the contract between the pursuer and the first...
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Jane Forrest (ap) Against Fleming Buildings Limited And Another
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