Mr Philip Seeney and Another v Gleeson Developments Ltd and Another
| Jurisdiction | England & Wales |
| Judge | The Hon. Mr Justice Coulson |
| Judgment Date | 16 November 2015 |
| Neutral Citation | [2015] EWHC 3244 (TCC) |
| Docket Number | Case No: HT-2015000157 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Date | 16 November 2015 |
[2015] EWHC 3244 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Royal Courts of Justice
Strand, London, WC2A 2LL
The Hon Mr Justice Coulson
Case No: HT-2015000157
Mr Seb Oram (instructed by Hewitsons) for the Claimants/Applicants
Mr Tom Owen (instructed by Systech Solicitors) for the Defendants/Respondents
Hearing date: 6 November 2015
INTRODUCTION
By an application dated 8 September 2015, the claimants (whom I shall call "the Seeneys") seek summary judgment pursuant to CPR Part 24 in respect of a part of their claim. That part is set out at paragraph 22 of the Particulars of Claim, and comprises a declaration that they and the first defendant "compromised all claims for compensation or additional payment" that the first defendant might have as at 1 September 2011 "arising from additions or variations to the works" at 19, The Crescent, Cambridge ("the property"). The compromise agreement, in the sum of £30,000, is said to be contained in an email dated 1 September 2011. The application for summary judgment is denied by the defendants (whom I shall call "Gleesons"), because they maintain that any agreement was conditional on the conclusion of a formal contract.
The background to the dispute is factually quite complex, although the issues on the summary judgment application are ultimately straightforward. Although I have grave concerns as to how the parties have ended up in the current position, no criticism can be attached to counsel, who argued their respective positions with clarity and courtesy. I should particularly commend Mr Owen for his equanimity in the face of a certain amount of judicial heckling.
BACKGROUND
In 2001, the Seeneys brought a property (known as 1, Fuller Way, Cambridge), from a company within the Gleeson Group. Since — at least for present purposes — nothing turns on the various entities within that Group who have had an involvement in this saga, I shall simply refer hereafter to all such companies as "Gleesons".
1, Fuller Way was significantly defective. The Seeneys indicated substantial claims against Gleesons. Eventually, by an agreement (called "the Property Agreement") in writing dated 21 April 2009, those claims were compromised on the basis that:
(a) Gleesons would demolish and rebuild an adjoining property which they owned, known as 19, The Crescent, Cambridge (the property);
(b) On completion of the property (sometimes called Darwin House in the papers), the freehold would be transferred by Gleesons to the Seeneys;
(c) At the same time, the freehold of 1, Fuller Way would be transferred by the Seeneys to Gleesons.
It was effectively a property swap: Gleesons would build a new house for the Seeneys and take the existing, defective house in exchange.
The Property Agreement contained the following provisions:
"3. Gleeson and the Owners shall agree an initial planning stage specification (up to RIBA Outline Plan of Work 2007 Work Stage D — design development) for the rebuilding of Plot 1 by no later than 28 days from the date of this Agreement and before the planning application is made. A more detailed specification shall be agreed before submission of plans to Building Control. In both cases, the Owners are to sign off the specification indicating their satisfaction with it (such approval not to be unreasonably withheld or delayed).
4. Within a reasonable period of the grant of planning permission and of any other consents necessary for such work to proceed, Gleeson shall proceed with the demolition of Plot 1 [the property] and the construction of a new house on that Plot in accordance with the agreed specification. Gleeson will have complete freedom as to the method of procurement and sequence of works and all the other construction-related provisions. However, Gleeson agrees to appoint only NHBC registered contractors and the site will be registered with the considerate contractor scheme.
5. Gleeson may amend the specification with the consent of the Owners, such consent not to be unreasonably withheld or delayed. Consent shall be deemed to be given when any change is minor (in the reasonable opinion of Gleeson) and is reasonably required by Gleeson because of unavailability of materials or any other item specified provided that any substituted materials are of equivalent or superior standard and are no less suitable for their purpose.
The Owners may amend the specification with Gleeson's consent, such consent not to be unreasonably withheld or delayed, subject to any such amendments being added to Schedule 1 to this agreement so that Gleeson will subsequently be compensated for any consequential increase in cost of such amendments in accordance with clause 15.
…
14. The enfranchisement costs incurred in acquiring the freehold of Plot 1 and Plot 2 will, in the first instance, be paid by Gleeson.
15. Following the transfer of Plot 1 to the Owners and Plot 2 to Gleeson, Gleeson will then pay to the Owners the sum of £25,000 less:
(a) the enfranchisement costs incurred in acquiring Plot 1 [the property]; and
(b) the cost of the additions and alterations to the specification set out in Schedule 1 to this agreement together with the cost of any amendments to the specification which the Owners may require in accordance with clause 5.
For the avoidance of doubt, if this is a negative figure then the Owners will make a payment of this sum to Gleeson."
There were therefore three matters identified in the Property Agreement on which subsequent agreement would be required. Those were:
(a) The more detailed specification referred to in clause 3;
(b) The enfranchisement costs incurred by Gleesons in acquiring the property (referred to as Plot 1) in clause 15(a);
(c) The costs of the additions and alterations to the specification required by the Seeneys in accordance with clause 5, as referred to in clause 15(b).
The agreement of the detailed specification at (a), and the costs at (c), were potentially linked.
By July 2011, Gleesons were ready to put the building works at the property out to tender. The emails between July and early September 2011 reveal two principal matters that were being debated back and forth: the value of the additions/alterations required by the Seeneys (referred to by both parties as 'the extras bill'), and the agreement of the detailed specification. Since those are the critical emails for the purposes of this application for summary judgment, I set them out in detail in Section 6 below. As I have already said, the issue is whether the eventual agreement (that the extras bill was £30,000 as at 1 September 2011) was binding on Gleesons, or whether it was subject to a formal contract that was never concluded.
Following further exchanges after 1 September 2011, a number of things are clear. First, although the possibility of a supplemental agreement was raised on both sides, no such document was ever provided by Gleesons to the Seeneys. A draft agreement was found on the files of Gleesons' former solicitors, but there was no evidence on either side that it had ever been sent out. Still further, the supplemental agreement was so general, with all of the relevant details to be filled in, that it was of no practical value.
Secondly, notwithstanding the absence of an agreed specification, Gleesons went on to build the property. That is an important matter, for reasons which I shall explain. I am told that, except for finishing details, the property has been completed for some time. Sadly, because of the ongoing dispute between the parties, it is sitting there, empty, whilst the Seeneys continue to occupy the defective house at 1, Fuller Way.
That dispute came to the fore in September 2012 when Gleesons sent the Seeneys a demand for £89,575.61 said to be due for extras that the Seeneys had instructed, pursuant to clause 5 of the Property Agreement. The list made no reference to the £30,000 and, in subsequent correspondence, it became apparent that Gleesons refused to acknowledge any agreement in that figure. Their stance was not made any clearer by their failure to identify when they said that the extras had been ordered, so there was nothing with which to compare the £30,000. The Seeneys, for their part, refused to pay the £89,575.61, and commenced a claim for specific performance.
In response, Gleesons maintain that the Seeneys' failure to pay the sum due under clause 15 of the Property Agreement amounts to a repudiation of and/or allows them to rescind the Property Agreement. Moreover, they say that their counterclaim is worth not £89,575.61 but, depending on which way it is calculated, £163,902 or £440,937. Neither of these sums was demanded prior to the commencement of proceedings. Moreover, neither figure is arrived at by a method of calculation which gives any indication of the extras allegedly ordered by the Seeneys. Instead the figures are calculated using global comparisons.
Thus, it appears to be Gleesons' case now that, although they have provided the Seeneys with a defective house at 1 Fuller Way for 14 years, they can either put to one side the subsequent settlement agreement into which they entered by way of compensation for those defects (the repudiation/rescission arguments), or constitute a mechanism by which they, Gleesons, receive almost half a million pounds by way of counterclaim. It may be that the commercial, reputational and practical realities of such a...
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