Jonathan Paul Hunt and Others v Optima (Cambridge) Ltd (First Defendant) Strutt & Parker (A Firm)(Second Defendant) Stephen Egford (Third Defendant) Strutt & Parker LLP (Fourth Defendant)

Hearing dates: 18�21, 25, 26 and 28 February 2013

Introduction

Jubilee Mansions in Thorpe Road, Peterborough, a new four storey block of 26 flats, was developed by Optima (Cambridge) Ltd ("Optima") between 2001 and 2004. 13 of the flats were retained by Optima for letting out purposes but the rest were sold mostly directly to long leaseholders, including the Claimants. The work was carried out by a number of different contractors. Strutt & Parker ("S&P") was retained by Optima to carry out periodic inspections with a view to producing certificates to or for the benefit of potential purchasers, which would certify that based on those inspections the work had been constructed to a satisfactory standard and in general compliance with approved drawings and the Building Regulations. Optima agreed with the leaseholders to whom it sold back in 2003 and 2004 that the works would be completed to certain standards and requirements and as landlord it agreed to maintain, repair and renew the main structure of the overall building and common services. Unfortunately, as the years have gone on, a number of serious defects or deficiencies have emerged both within the flats and in the common parts and services such that the Claimants have issued the current claim against Optima and S&P (in various manifestations). Optima is said to have been in breach of its agreement with four of the Claimants to whom it sold back in 2003 and 2004 and in breach of its repairing covenant with all Claimants whilst S&P is said to have been negligent by way either of negligent misstatement or of a warranty or of some overarching tortious duty for failing to pick up 16 of the 19 defects or deficiencies complained of. There are interesting issues in relation to the tort and warranty claims, the scope of Optima's various obligations and as to damages in particular in relation to remedial works to the common parts or services which may be established as being the liability of Optima.

The length of this judgment does not simply reflect the complexity of the issues (and there are some such issues) and the fact that there are 8 Claimants pursuing claims for 19 defects some of which directly affect their flats and others which impact on the building overall. It reflects also a lack of or belated agreements between the parties and their experts which is unfortunate.

The Parties and the Witnesses

The Claimants are:

In Mr and Mrs Peace's case, they acquired Flat 17 from a Ms Leach who had originally bought it from Optima, albeit that there was no assignment of any causes of action which she may have had against either sets of Defendants.

All the Claimants were called except Mrs Sahi and Mrs Peace although I met both these ladies on a site visit. Without exception, I found all those Claimants called as witnesses decent, honest and reliable. I was particularly impressed with Mr Peace who with great courtesy and without exaggeration described the impact of a number of the defects which affected his and his wife's flat.

Mr Khazai, the director of Optima involved at the time of the development and since, I felt, tried to help when giving evidence, although English is not his first language; certainly he was not dishonest in the sense of giving answers which he did not think were true. He seemed almost bewildered as to some of the complaints and his witness statement infers that the Claimants had acted unreasonably in pursuing a number of complaints. The fact that since proceedings have been issued a number of serious defects are accepted by Optima as needing extensive work undermines this bewilderment. I strongly got the impression however that his recollection of what happened in 2003 and 2004 was poor, contradicted for instance as it was on occasion by his own contemporaneous documents. I have no hesitation in preferring the Claimants' evidence where it differs from his.

Mr Egford, the Third Defendant architect employed by S&P to inspect the works and certify, was honest but I felt that he was, as will be seen, too dependant on assuming that others were in effect doing his job for him. Time and again, he said that he relied on what Optima told him as to whether defective work had been put right or on the fact that the local Council building inspectors must have vetted various items of work. He does not seem to have differentiated between what S&P had quoted to do for Optima and what he was certifying to potential purchasers.

As for the experts, three experts of different disciplines (architect or design, engineer and quantity surveyor) were called by each party and there was one single joint expert valuer. With the parties' agreement, the architect and engineer experts gave evidence simultaneously, what is known colloquially as "hot tubbing"; this worked extremely well with each of them dealing with each defect and being asked questions on it; they were then cross-examined separately on more overall matters. My views on the experts were:

(a) Architects

(i) Mr Brophy, called by the Claimants, is a qualified and experienced Architect who came over as wholly decent, open and straightforward. He spoke with an authority which was compelling. His involvement which has been more extensive than the other two comparable experts has led to him having done more investigation and necessarily having a more thorough knowledge than them.

(ii) Mr Molsom, called by Optima, is a building surveyor. Whilst he was, as one would expect, wholly honest, he perhaps necessarily had been less thorough than the other two. His approach was somewhat superficial, as evidenced by his relatively short report and I felt that he tended to give opportunistic answers when cross examined.

(iii) Mr Armes, S&P's expert, is an experienced Architect. He was wholly open in his answers under cross examination particularly in his ready acceptance of the existence of defects and breach of duty on the part of his client in respect of a number of the defects. He was a decent and patently truthful expert.

Of these three experts, on balance I prefer the evidence of Mr Brophy over the other two and Mr Armes over Mr Molsom.

(b) Engineers:

(i) Mr Chick, the Claimants' engineer, had been involved in some detail since 2011 and had done the most thorough job of investigation, compared with the other two. He was very impressive both in quality and breadth of his report but also in his oral evidence.

(ii) Mr Bothamley, Optima's expert, was the least satisfactory of the engineering experts. I felt that he was inconsistent; for instance, he tried to go back on what he had agreed with the other two for no good reason, for instance on the agreed remedial scheme for the conservatory.

(iii) Mr Tutt, S&P's engineer, was by no means unsatisfactory but I felt that he was not particularly emphatic or very convincing.

Of the three experts, I was most impressed by Mr Chick.

(c) Quantity Surveyors

(i) Mr Nutland is an experienced Quantity Surveyor who was extremely thorough albeit down to earth and had extensive experience in the contracting business prior to becoming fully chartered. He produced the most detailed cost estimates and was most impressive. I felt that he was on occasion too pessimistic about future costs in terms of the percentage add-ons (preliminaries, contingency and fees) and a number of items but was obviously otherwise reliable.

(ii) Mr Molsom, although not a quantity surveyor, had building experience. His investigation was the least detailed and he tended to be seeking always the cheapest option, irrespective of whether it was the most suitable one.

(iii) Mr Byford is also an experienced Quantity Surveyor who, although somewhat constrained by time before the trial, produced comprehensible and reasonably thorough reports. He sought to be helpful.

I was surprised that prior to noon on the day when the quantum experts were due to give evidence they had reached minimal agreement on a figures basis but belatedly they reached a greater measure of agreement. Overall, they were all co-operative but on balance I found Mr Nutland to be the most impressive, followed by Mr Byford.

The Sale Agreements and the Leases

The Sale Agreements between Optima and the 1st, 2nd, 5th and 6th Claimants were in similar form.Clause 1 contained definitions for the "Building", the "Premises", "Car Park", "Estate" and "Premises" which were to be the same as those in the Lease. The Lease defined the Building as "Jubilee Mansions�shown edged in yellow on the plan annexed" and "the Premises" as "all that property known as [the particular apartment by number] more particularly described in the First Schedule together...