Michael Griffiths and Margurite Griffiths v Clifton Earl Gilbert
| Jurisdiction | England & Wales |
| Judge | Sarah Watson |
| Judgment Date | 06 December 2022 |
| Neutral Citation | [2022] EWHC 3122 (TCC) |
| Docket Number | Case No: A50BM035 |
| Court | Queen's Bench Division (Technology and Construction Court) |
[2022] EWHC 3122 (TCC)
HER HONOUR JUDGE Sarah Watson
Case No: A50BM035
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
Mr George Woods (instructed by Knights plc) for the Claimants
Mr Avtar Khangure KC (instructed by Aspect Law) for the Defendant
Hearing dates: 2 August 2022 to 5 August 2022 and 30 August 2022
BACKGROUND AND SUMMARY OF CLAIM
In these proceedings, the Claimants, Mr Michael Griffiths and Mrs Margurite Griffiths, claim damages for fraudulent misrepresentation from the Defendant, Mr Clifton Gilbert (“Mr Gilbert”). Mr Gilbert was director and shareholder of C E Gilbert (Building Contractors) Limited (“CEG”). His son, Mr Nathan Gilbert (“Nathan Gilbert”) also worked for CEG.
In 2008, Mr and Mrs Griffiths entered into a contract with CEG to build a substantial house at Whitegates Farm, Ilmington, Armscote, Stratford upon Avon (“the Property”) in which Mr and Mrs Griffiths intended to live. The contract price was nearly £2 million.
Mr and Mrs Griffiths allege that Mr Gilbert represented to them that CEG would take out NHBC cover to the full build costs of £2 million. Mr Gilbert denies that he made that representation. His case is that he only ever said that CEG would obtain a standard NHBC policy, which has a limit on claims for defects of £1 million.
CEG obtained standard NHBC cover for the Property. Mr and Mrs Griffiths brought claims for defects with the Property and for asbestos contamination of the surrounding land. NHBC instigated their Resolution process pursuant to the warranty. Mr and Mrs Griffiths were unhappy with NHBC's response and withdrew from the process. They commenced arbitration proceedings against CEG, claiming damages for defects with the Property and contamination of land.
Mr and Mrs Griffiths commenced this action against Mr Gilbert in May 2014. It was stayed in July 2015 pending the outcome of the arbitration against CEG. An award was made against CEG in the arbitration in October 2018 for substantial damages and costs. CEG was unable to meet the award and went into insolvent liquidation.
Mr and Mrs Griffiths sought to recover from NHBC sums awarded in the arbitration. In a negotiated settlement, NHBC paid them a total of £1 million plus indexation under the warranty. Mr and Mrs Griffiths allege that, had the cover been for £2 million, they would have made a higher recovery from NHBC than they did. Mr Gilbert does not accept that is the case. He argues that, even if there had been a £2 million limit of cover for defects, NHBC would not have paid a higher sum than they did, because the NHBC cover would not have extended to some of the claims awarded by the arbitrator.
The Claimants' case
The parties agree that, during discussions before the contract was made, Mr Gilbert told Mr and Mrs Griffiths that CEG was registered with NHBC, would imminently receive A1 Builder status with NHBC and that CEG would obtain an NHBC warranty for the Property. The parties agree that they understood that the NHBC warranty would be NHBC's Buildmark warranty.
Mr and Mrs Griffiths allege that, before the contract was made, Mr Gilbert represented to them that the NHBC cover would be for the full value of the build costs of nearly £2 million. They allege that the representation was made both orally and by Mr Gilbert providing draft costings breaking down the proposed lump sum price during the course of the negotiations for the contract. They allege that the inclusion of the figure of £7,000 shown against “NHBC” in the “Fees” section of the first of the draft costings and the figure of £10,500 in the second of the draft costings were representations that Mr Gilbert had obtained quotations for those amounts from NHBC for the premium for cover for the full build costs and that CEG would take out that cover. They allege that they relied on those representations in entering into the contract with CEG and that they would not have entered into the contract had that representation not been made.
They also allege that, after the contract was made, Mr Gilbert represented to them that CEG had taken out NHBC cover for the full build costs by including in valuations issued as claims for payment sums for NHBC fees. They rely on valuation no 1 dated 30 May 2008, in which £8,400 was claimed, and valuation no 7 dated 10 March 2009, in which the balance of £2,100 was claimed. They claim they relied on those post-contractual representations in continuing to pay CEG's claims for payment without taking steps to obtain the cover they expected.
They allege Mr Gilbert is personally liable for those representations, as they were made fraudulently, knowing that he had no intention to arrange for CEG to put in place such cover.
The Defendant's case
Mr Gilbert denies he ever represented that CEG would provide a level of cover in excess of NHBC's standard Buildmark cover, which has a claims limit for defects to the Property of £1 million. In the Defence, he also alleges that he made clear that the cover would be the same cover as he had obtained for a substantial house CEG was building at Braggington, with which Mr and Mrs Gilbert were familiar, and would be for £1 million. He also states in his Defence that he did not know until this litigation began that NHBC offered Buildmark cover over the standard £1 million cover.
He denies that the figures in the draft costing against “NHBC” in the “Fees” section of the draft costings were solely for NHBC cover. His case is that they included membership of NHBC, contractors' all risk insurance and public liability insurance. He also says the figures were just approximate estimates of those costs within in a breakdown of a total fixed price contract and, like other fees identified in the draft costings, if those estimates were not spent, they would be part of CEG's profit. He denies that the draft costings amount to representations as to the actual cost to CEG of NHBC cover.
He also denies that the inclusion of claims for payment in the valuations amount to a representation that there was NHBC cover for the full build costs.
Further, he denies that any representations were made by him on his own behalf. His case is that he acted at all stages in his capacity as director of CEG, who were the proposed contractors.
PRELIMINARY PLEADING POINT
Mr. Khangure KC argues that, as the allegation that Mr Gilbert represented that the NHBC cover would be for the full build costs is contained only in the Reply and not in the Particulars of Claim, it does not form part of the Claimants' case for trial and, without that allegation, the claim must fail. He argues that the allegations set out in the Particulars of Claim were true, and it is only if Mr Gilbert represented that the NHBC warranty that CEG would obtain would cover the full build costs that the Claimants might succeed in their claim.
Mr Khangure relies on the case of Martlet Homes Limited v Mulalley and Co Limited [2021] EWHC 296 (TCC) in support of the argument that it is not open to the Claimants to argue the case by reference to allegations which appear only in the Reply.
The Re-amended Particulars of Claim include allegations that Mr Gilbert represented that CEG would procure Buildmark cover. Paragraphs 6 and 7 of the Re-amended Particulars of Claim include allegations of representations that CEG would put in place cover for the “ full cost of putting right damage”. In the Defence, Mr Gilbert pleaded that that he had stated that the Property would have the same £1 million Buildmark cover as CEG had procured for Braggington, which was a comparable development. The Claimants provided more detailed allegations of the allegations as to the representations in the Reply. They alleged that the Defendant had represented that the NHBC cover would be “ for the full value or full build cost of the Property” or “for the full value of the Property, the build cost of which was just under £2 million” and that “ the Company would take out and charge a fee for NHBC cover for the full value of the Property at the price set out in [the draft costings document]”. At trial, the Claimants did not pursue the case that Mr Gilbert had represented that the warranty would be for the “ full value of the Property”. The Claimants' case at trial was that representation was for the full value of the work or the full build cost, which was £2 million.
No application was made to amend the Particulars of Claim to include the allegations in the Reply.
Mr Woods argued that the Defendant had understood the Claimants' case from the Reply for a considerable length of time, the parties had dealt with the allegations in the Reply in their evidence and also that HHJ Grant, when making case management directions, had directed that amendments be made to the Particulars of Claim and given permission for the Reply.
I do not consider the question of any directions given by his HHJ Grant affect the question of whether the alleged representations are properly pleaded so as to form part of the Claimants' case for trial. When the court gives case management directions, it does not advise the parties or alter the rules of pleading. The court sometimes directs that a statement of case that lacks clarity should be better particularised. Its failure to point out that an allegation in a Reply should be in the Particulars of Claim does not mean the court has made any ruling that affects the issues for trial.
Mr Woods also argued that the allegations in the Reply were responsive to the Defence, which pleaded that warranty offered was limited to £1 million, and...
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