National House-Building Council v Vascroft Contractors Ltd
| Jurisdiction | England & Wales |
| Judge | Mrs Justice O'Farrell,Mrs Justice O'Farrell DBE |
| Judgment Date | 19 July 2022 |
| Neutral Citation | [2022] EWHC 1881 (TCC) |
| Docket Number | Case No: HT-2021-000076 |
| Court | Queen's Bench Division (Technology and Construction Court) |
[2022] EWHC 1881 (TCC)
Mrs Justice O'Farrell DBE
Case No: HT-2021-000076
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
TECHNOLOGY AND CONSTRUCTION COURT (QBD)
Royal Courts of Justice
Rolls Building, Fetter Lane, London, EC4Y 1NL
David Sawtell (instructed by BP Collins LLP) for the Claimant
Abdul Jinadu (instructed by Hickman Construction Law) for the First Defendant
Hearing date: 28 th June 2022
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This judgment will be handed down by the judge remotely by circulation to the parties' representatives by email and release to The National Archive. The date and time for hand-down is deemed to be Tuesday 19 th July 2022 at 10.30am
The matter before the court is the application by the claimant (“NHBC”), to strike out parts of the Defence and/or for summary judgment in respect of those parts, on the basis that they disclose no reasonable grounds for defending the claim because they are misconceived in law and/or they have no real prospect of success.
Background facts
This claim is brought by NHBC under its ‘Buildmark Cover’ insurance scheme for newly built and newly refurbished residential properties and arises out of extension works to an existing basement at Treetops, Crompton Avenue, Hampstead, London N6 4LH.
In 2007 the Defendant (“Vascroft”) was engaged by the owner of the property, Saterix Trading Incorporated (“Saterix”), to carry out shell and core work at the property.
Buildmark Cover is provided by way of a tripartite agreement between NHBC, the home-owners and registered builders or developers. In 2007 Vascroft was a construction company registered with NHBC; it applied to register the property for Buildmark Cover and NHBC agreed to offer Buildmark Cover in respect of the same.
The terms of the Buildmark Cover imposed on Vascroft obligations to ensure that the property was designed and built in accordance with the applicable NHBC ‘Requirements’, including the ‘Technical Requirements’, the ‘Performance Standards’ and the ‘Guidance’.
On about 15 July 2011 Vascroft was engaged by Saterix to carry out basement extension and other works at the property. A dispute arose, as a result of which Vascroft's employment under the contract was terminated and it left site, but the works were completed in about January 2013.
NHBC's case is that on 26 March 2014 the property was sold by Saterix to Ethiel Assets Limited (“Ethiel”).
A Buildmark Cover Insurance Certificate was issued in respect of the property under policy number AG163987, effective from 12 June 2014 and valid for a period of 10 years.
In 2013 and 2014, Saterix alleged that there were defects in the works, causing water ingress in the basement pool and leisure area, and sent emails to Vascroft, notifying it of the defects.
On 15 March 2017, following investigation of the defects, NHBC's investigator produced a ‘Resolution Report’, identifying remedial works that were required to be carried out by Vascroft pursuant to the ‘Rules’ under the Buildmark scheme. The remedial works were not carried out. By letter dated 30 August 2018 NHBC notified Vascroft that it would carry out the necessary remedial works and would require Vascroft to reimburse it for the costs incurred, including the costs incurred in connection with settling Ethiel's claim, administration charges and interest.
On 27 March 2019 NHBC entered into a settlement agreement with Ethiel, pursuant to which £1,003,343.03 was paid in respect of the defects.
Proceedings
On 2 March 2021 NHBC commenced proceedings against Vascroft.
On 28 October 2021 NHBC served particulars of claim, alleging defective design and workmanship in respect of the basement extension works, in breach of the Technical Requirements and the Performance Standards, causing ‘Damage’ within the meaning of the Buildmark Cover. NHBC seeks to recover the sum of £1,003,343.03 by way of indemnity under the terms of the Buildmark Cover scheme.
On 24 January 2022 Vascroft served its defence, denying that NHBC was entitled to recover the sums claimed, including the following grounds:
i) NHBC, Saterix or Ethiel failed to make a claim under section 2 of the Buildmark Cover within the two-year period of cover, or afford reasonable access to the property to carry out remedial works;
ii) Saterix, through its architect, Capital Interiors Limited (“Capital”) and structural engineer, AE Butler & Partners Limited (“Butler”), was responsible for the design of the interface between the existing basement and the extension, including the design of the waterproofing;
iii) NHBC approved the design of the basement and waterproofing;
iv) Vascroft's subcontractor, Oliver Connell & Son Limited (“OCL”), was responsible for any defective workmanship; and
v) the settlement payment was made to a third party, Mr Anand, rather than to Saterix or Ethiel, and did not reflect the reasonable costs of the required remedial works, any reduction in the sale price of the property for the known defects, betterment or damage caused by unrelated issues.
On 23 February 2022 NHBC served its reply.
The application
On 12 April 2022, NHBC issued an application, seeking an order that:
i) Paragraphs 2.2(i) & (iii);
ii) Paragraphs 2.3(i), (ii) & (iii);
iii) Paragraph 2.4;
iv) Paragraphs 2.6(i) & (ii);
v) Paragraph 4.3;
vi) Paragraphs 4.6(b) & (c);
vii) Paragraphs 4.7 (ii), (iii) & (iv);
viii) Paragraph 4.8(iii);
ix) Paragraphs 5.2(iv), (v), (vi), (vii), (viii);
x) Paragraphs 6.3 (ii) & (iii);
xi) Paragraphs 7.1(ii) & (iii);
xii) Paragraph 8.1;
xiii) Paragraph 8.2; and
xiv) Paragraph 10.2(ii) of the Defence
be struck out pursuant to CPR 3.4(2)(a) and/or summary judgment be given on those issues pursuant to CPR 24.1 on the grounds that Vascroft has no real prospect of successfully defending on those issues and there is no other compelling reason why the issues should be disposed of at a trial.
The application is supported by the witness statements of Steven Baker, senior litigation counsel at NHBC, dated 12 April 2022 and 22 June 2022 respectively.
The application is opposed by Vascroft and reliance is placed on the witness statements of:
i) Andrew Hickman, solicitor and partner in Hickman Construction Law, dated 15 June 2022;
ii) Mitesh Vekaria, Managing Director of Vascroft, dated 15 June 2022;
iii) Raymond Crabbe, of RJC Consultants, dated 15 June 2022.
The applicable test
CPR 3.4(2) provides that:
“The court may strike out a statement of case if it appears to the court:
…
(a) that the statement of case discloses no reasonable grounds for bringing or defending the claim …”
The principles to be applied are as follows:
i) If the pleaded facts do not disclose any legally recognisable claim against a defendant, it is liable to be struck out. However, the application must assume that the facts alleged in the pleaded case are true.
ii) It is not appropriate to strike out a claim in an area of developing jurisprudence, since in such areas, decisions as to novel points of law should be based on actual findings of fact: Barratt v Enfield BC [2001] 2 AC 550 per Lord Browne-Wilkinson at p.557.
iii) The court must have regard to the overriding objective and should be slow to deal with single issues in cases where there will need to be a full trial on liability involving evidence and cross examination in any event and/or where summary disposal of the single issue may well delay, because of appeals, the ultimate trial of the action: Partco v Wragg [2002] EWCA Civ 594 per Potter LJ at [27]–[28].
iv) The court must be certain that the claim is bound to fail; unless it is certain, the case is inappropriate for striking out: Hughes v Colin Richards & Co [2004] EWCA Civ 266 per Peter Gibson LJ [22]–[23]; Rushbond v JS Design Partnership [2021] EWCA Civ 1889 per Coulson LJ at [41]–[42].
CPR 24.2 provides that:
“The court may give summary judgment against a claimant … on the whole of a claim or on a particular issue if –
(a) it considers that –
(i) that claimant has no real prospect of succeeding on the claim or issue; … and
(b) there is no other compelling reason why the case or issue should be disposed of at a trial.”
The principles to be applied on such applications are well-established and are summarised conveniently in Philipp v Barclays Bank UK plc [2022] EWCA Civ 318 per Birss LJ at [20] as follows:
i) The court must consider whether the claimant has a “realistic” as opposed to a “fanciful” prospect of success.
ii) A “realistic” claim is one that carries some degree of conviction. This means a claim that is more than merely arguable.
iii) This does not mean that the court must take at face value and without analysis everything that a claimant says in his statements before the court. In some cases it may be clear that there is no real substance in factual assertions made, particularly if contradicted by contemporaneous documents.
iv) The court must take into account not only the evidence actually placed before it on the application for summary judgment, but also the evidence that can reasonably be expected to be available at trial.
v) It is not uncommon for an application under Part 24 to give rise to a short point of law or construction and, if the court is satisfied that it has before it all the evidence necessary for the proper determination of the question and that the parties have had an adequate opportunity to address it in argument, it should decide it.
vi) If the respondent's case is bad in law, he will in truth have no real...
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