Niklas Zennstrom and Another v Kevin Fagot and Others
| Jurisdiction | England & Wales |
| Judge | Mr Justice Edwards-Stuart,MR JUSTICE EDWARDS-STUART |
| Judgment Date | 21 February 2013 |
| Neutral Citation | [2013] EWHC 288 (TCC) |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Case No: HT-11397 |
| Date | 21 February 2013 |
[2013] EWHC 288 (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 Edwards-stuart
Case No: HT-11397
Richard Morgan QC (instructed by Harbottle & Lewis LLP) for the Claimants
Daniel Crowley and David Thomas (instructed by Fisher Scoggins Waters LLP) for Defendants (2) & (3)
Hearing dates: 12th-14 November, 6th & 20th December 2012
Introduction
In November 2009 the Claimants, as purchasers, and the Second and Third Defendants, as vendors, exchanged contracts in respect of a property known as 22 Crowsport, Hamble, Southampton. The price was £1.1 million. The property was in a much coveted private road with a view over the marina. It had been completely rebuilt by the Second and Third Defendants, to whom I will refer hereafter as Ms Moseley and Ms Wilks, in a contemporary Bauhaus style. It had a striking exterior and a minimalist modern interior lit by extensive use of glazing.
However, according to the Claimants and their advisers, the building was structurally unsafe and has since been demolished. Ms Moseley and Ms Wilks, who had lived together as a couple for nearly 20 years, say that they built the property as their dream home in which they intended to live permanently. The Claimants, by contrast, allege that it was built purely for profit and that Ms Moseley and Ms Wilks are therefore liable under the Defective Premises Act 1972 because they developed 22 Crowsport in the course of a business of providing dwellings and the building was neither built in a workmanlike manner nor was it fit for habitation when completed.
This is a trial of a preliminary issue of whether or not Ms Moseley and Ms Wilks owed a duty to the Claimants under the Defective Premises Act 1972. The outcome turns on the facts and, essentially, whether or not I accept the evidence of Ms Moseley and Ms Wilks that they were not acting as property developers. This is not a case where there is a conflict of evidence between the claimant and the defendant: effectively, the Claimants in this case are not in a position to give any relevant evidence. Whilst the First Claimant, Mr Zennstrom, has made a long witness statement, it really amounts to nothing more than a forensic analysis of the documents produced on disclosure. As far as he is concerned, therefore, issues as to the credibility of his evidence do not really arise. So although the crucial evidence comes from the Defendants, the burden of proof rests on the Claimants.
The Claimants have also sued the builder, Kevin Fagot, the architect, Andrew Ramus, and a company called Fast-Calc Ltd, who carried out certain structural calculations in relation to the steelwork for the building. As part of the contract of sale, the Claimants took assignments of Ms Moseley's and Ms Wilks's causes of action against those parties. Judgment has been entered against the builder, who appears to have no assets, and the architect may have no insurance cover, which may go some way towards explaining why the Claimants have sued Ms Moseley and Ms Wilks under the 1972 Act.
The facts
Ms Moseley and Ms Wilks bought No 22 Crowsport in July 2004 for £360,000. It was clearly in need of refurbishment, but soon after they moved in they carried out limited works of improvement such as replacing some of the old metal windows, fitting some new floors and some redecorating and refurbishment. Ms Wilks said that they were particularly attracted to this property because they could keep their boat at the Hamble Marina, which was just a short walk away.
At that time Ms Moseley was a personal fitness trainer and Ms Wilks worked in the food sales industry. She spent a substantial amount of time travelling. They soon began to make friends and Ms Wilks says that they went on skiing holidays with some of their new neighbours.
In 2005 they met the architect Mr Ramus, the Fourth Defendant. In February 2006 they made their first application for planning permission. This involved a complete redesign of the whole house, involving the extension of both the ground and the upper floors of No 22. This was refused because the planners apparently did not like such a large extension to the upper storey. They made a second, fairly similar, application in the following month and that too was refused.
In October 2006 they made a further planning application for an extension: this time it was successful - the upper floor had been reduced in extent so as to produce an asymmetrical appearance, which was apparently in accordance with the wishes of the planning department. By this time they had been working with the architect Mr Ramus, the Fourth Defendant, for some 18 months or so and had become very enthusiastic about his ideas for the property. The work envisaged by this new application was very extensive and involved demolishing most of the existing building. Finally, on 3 October 2007, they made a further planning application which involved the demolition of the whole of the existing structure and the construction of a completely new building - albeit with a similar outcome to the proposal which had been the subject of the third application.
In September 2007 - before the new application for permission to demolish the whole building had been made - work started with the demolition of most of the existing structure, and this was not completed until about the end of November or early December 2007. The work of rebuilding the house took much longer than originally envisaged and was still not complete when Ms Moseley and Ms Wilks moved back into the property on about 5 September 2008, at which time work was still going on. They celebrated their civil partnership on 13 September 2008 with a large party (although, for the most part, not held in the house).
A certificate of Practical Completion was issued on 6 April 2009, with effect from 1 January 2009. On 21 April 2009 a Final Certificate was issued under the Building Regulations by JHA Innovation Ltd, the authorised building inspectors appointed by the local authority. Shortly after this Ms Wilks met someone who told her about hypnotherapy. She was very interested and decided to do a "taster" week-end at Brighton University. She had been neither happy nor satisfied in her present job in the food sales industry and after the week-end course she decided that she wanted to change career and to become a hypnotherapist. This would involve a training course lasting a year or more before she could set up her own practice. The consequence of this would be that for well over a year the couple would lose the benefit of her current salary and would have to make do on Ms Moseley's earnings, supported by any private income or the disposal of any capital assets (such as of the buy to let properties that they had bought a few years earlier).
The evidence of Ms Wilks was that, after much anxious consideration, she and Ms Moseley concluded that if Ms Wilks was going to give up her job they would have to sell No 22 Crowsport because without the second income they would no longer be able to service the mortgage. Ms Moseley agreed that they should do this. However, Ms Moseley told the court that there was a further reason for moving and that was the unpleasant behaviour of their next door neighbour at No 23, a Mr Jenkins. He was a man who, they said, disapproved of having a same sex couple as his next door neighbours and took no steps to conceal his animosity. Ms Moseley said, and I accept, that Ms Wilks had found this particularly upsetting.
However, the case for the Claimants was that Ms Wilks and Ms Moseley were already unable to finance the outgoings of No 22 on their present joint incomes and that they had always intended to sell it as soon as the work was complete. It was said that they deliberately kept the house sparsely furnished, more like a show house rather than a home, so that it would be attractive to potential purchasers. Indeed, the Claimants go further and say that this was their intention from the moment that they acquired No 22 in July 2004. Alternatively, if they did not have that intention when they acquired No 22, they had certainly formed it by the time they embarked on the building works in August/September 2007.
Whether or not the Claimants' case is made out is the question I have to decide on this preliminary issue.
It was submitted by Mr Richard Morgan QC, who appeared for the Claimants, that Ms Wilks and Ms Moseley were already well on the property ladder when they bought No 22 and that they were all too well aware of the profits to be made from the successful development of residential property. In the light of this submission it will be necessary later in this judgment to set out the previous property dealings of Ms Wilks and Ms Moseley in some detail.
The procedural history
A few weeks before the date set for the hearing of the preliminary issue the Claimants applied to amend the Particulars of Claim to make allegations of dishonesty against Ms Wilks and Ms Moseley, in that it was to be alleged that they were well aware that there were defects in the building during construction and that these were deliberately concealed from the Claimants.
It was accepted on behalf of the Claimants that if the application was to be allowed it would have the consequence that the hearing of the preliminary issue would have to be abandoned and that it would have to be determined at the trial of the remaining issues, which was then listed for 18 March 2013.
I refused the application on essentially two grounds. First, I did not regard the...
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