Offer-Hoar v Larkstore Ltd
| Jurisdiction | England & Wales |
| Judgment Date | 02 December 2005 |
| Neutral Citation | [2005] EWHC 2742 (TCC) |
| Date | 02 December 2005 |
| Court | Queen's Bench Division (Technology and Construction Court) |
| Docket Number | Claim No: HT-05–19 |
[2005] EWHC 2742 (TCC)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
St Dunstan's House
133–137 Fetter Lane
London, EC4A 1HD
His Honour Judge David Wilcox
Claim No: HT-05–19
Mr Christopher Thomas QC and Ms Gaynor Chambers (instructed by Warners) for the Part 20 Claimant
Mr Mark Pelling QC (instructed by Squire & Co.) for the Part 20 Defendant
Hearing dates: 24 and 25 October 2005
His Honour Judge Wilcox
The main proceedings concern a claim by the Claimants who are the owners of properties in Hythe Road, Kent for damages in respect of losses suffered by them on 15 October 2001 when their properties sustained damage as a result of a landslip alleged to have been caused by excavations carried out on the development site down slope and to the rear of their properties.
The First Defendant Larkstore Limited, a property development company, is the freehold owner of the site and the Second Defendant Bess was the building and civil engineering contractor engaged by Larkstore under a design and build contract to carry out the works being carried on at the site at the time of the loss.
Following the commencement of proceedings against Larkstore by the Claimants Larkstore commenced Part 20 proceedings against the Part 20 Defendant Technotrade Limited a limited company offering geo-technical site investigation and engineering services. Technotrade produced a site investigation report dated 14 December 1998 for a company called Starglade Limited.
Starglade sold the site to Larkstore on 21 June 1999 in two phases. Phase I was completed immediately. The completion of Phase II of the sale of the site to Larkstore was in August 2000.
On 28 March 2001 planning permission was granted by Shepway District Council to Larkstore's agents for Phase II of the site. In September 2001 part of the Phase II land was sold off to a third party.
It was a condition of the planning permission at paragraph 9(a):
"Prior to the commencement of the development the applicant shall obtain a written report from the specialist soil consultants, advising on the suitability of the land for the proposed development and identifying any works for stabilising the land and adjoining land and properties, reinforcing the foundations and strengthening the proposed development and any other works (including works of drainage) as may be necessary to ensure the stability of the land, proposed buildings and associated services, and any neighbouring land and building. This report shall be submitted to the Local Planning Authority for its consideration and approval before development commences".
Larkstore used the Technotrade report to satisfy that condition. It was the second time they had relied upon the report. The first time was to satisfy a similar condition in the planning consent given in relation to Phase I land and its development.
The consent of Technotrade was not sought by Larkstore for their use of the 14 December report. The report contains no prohibition against assignment.
Larkstore came into the possession of the Technotrade report when they purchased the development site from Starglade Limited in June 1999. It was offered for sale with detailed planning and building regulation approval for eight detached units.
The planning consent that related to the site at this time was that dated 19 November 1997 and contained at paragraph 10(a) an exactly similar condition as to the requirement for a specialised soil report which appears at paragraph (9)(a) of the 2001 consent.
It appears that this is a common form requirement in planning consents given for that area of coastal land extending from Sandgate in the east and into Hythe and is known as "the Latchpath" condition after an historical Hythe landslip. Mr Nash the managing director of Larkstore was given a copy of the Technotrade report which had been used to fulfil that condition.
The planning consent of March 2001 was applied for by Larkstore in relation to Phase II and the Technotrade report was recycled to fulfil the geo-technical report condition in the consent Y01/0128/SH.
At no time did Larkstore seek permission from Technotrade to use the report of 14 December 1998. There was no attempt to obtain from Technotrade any form of collateral warranty.
On 2 October 2001 Larkstore entered into the design and build contract with Bess Limited and the contract documentation included the Technotrade report of 14 December 1998.
The landslip occurred on Phase II of the site whilst Bess Limited were carrying out works on the 15 October 2001.
Some damage occurred to the neighbouring properties upslope from the site and extensive stabilisation works had to be undertaken on the site for the purposes of the proposed development.
On 25 March 2003 the main proceedings were commenced by the upslope neighbours against Larkstore and Bess.
On 23 February 2003 a Deed of Assignment between Starglade Limited and Larkstore Limited was entered into, some five years after Technotrade had completed its duties under the contract of retainer with Starglade Limited, 3 1/2 years after the Phase II completion and 2 1/4 years after the landslip had occurred.
The material parts of the assignment are:
i) Starglade with full title guarantee assigns to Larkstore the Report together with all the benefit and interest and rights of Starglade in and under the Report and the right to enforce the same TO HOLD to Larkstore absolutely.
ii) For the avoidance of doubt the assignment effectively hereby includes the right to sue in respect of breaches of Technotrade of its duties and obligations and to bring all such claims against Technotrade as are available at law.
On the same date Larkstore wrote to Starglade confirming the agreement that had been reached in relation to the assignment:
"… In consideration of you making the assignment of even date, we undertake to pay you half of the net monies received from Technotrade Limited.
"Net monies" means all sums received from Technotrade Limited, whether by Court order or judgment or by compromise or otherwise and whether in respect of the cause of action assigned by you to us or otherwise, but after deduction of our costs of pursuing Technotrade Limited and deduction of any costs we may be ordered to pay Technotrade Limited.
We agree to hold all monies received from Technotrade Limited on trust for division in accordance with the foregoing …"
On 6 October 2004 Part 20 proceedings were commenced against Technotrade Limited who served a defence of the 3 November 2004. Larkstore served a reply of the 18 January 2005.
On the 14 June 2005 an order was made for the determination of preliminary issues:
i) Whether Larkstore is able to recover the or any part of the loss allegedly suffered by it, by the operation of the assignment.
ii) Whether Technotrade owed a duty of care to the Claimants as alleged.
iii) Whether Technotrade owed Larkstore a duty of care as alleged.
THE ASSIGNMENT BASED CLAIMS
Larkstore pursue a claim for breach of contract which is exclusively referable to the assignment there never having been any contract between Larkstore and Technotrade.
By paragraph 32 of the Particulars of Claim under the assignment is claimed the benefits of Starglade's rights of action for breaches of tortious duty.
Mr Pelling QC attacks the validity of the assignment contending that it is so remote from the transfer of the land by Starglade to Larkstore, that it could not be considered incidental to that transaction and that furthermore since there was a separate consideration agreed, namely half of the net proceeds recoverable from Technotrade, it is champertous.
Mr Nash, the managing director of Larkstore gave evidence that it had been anticipated at the time of the original transfer of the site in March 2001 that there would have been an assignment of the geo-technical report to Larkstore, and that it was clearly overlooked. However, when the landslip occurred and the alleged defects in the report became apparent Mr Nash wrote to the loss adjusters representing Bess Limited the contractor in respect of the claims pursued by the upslope property owners. The letter dated 21 November claims the following:
"05 The introduction to the Technotrade site investigation clearly states that it was undertaken to determine ground conditions to enable foundation and hard standing design to be carried out. It was not produced to deal with any other issues, such as the short time stability of third party land during the construction process.
06 Item 2.3 of the Technotrade Report warns of the possibility of landslips and rotational slips.
07 Bess Limited commenced work on site at their own risk without so much as making a Building Control application, let alone obtaining approval. The local authority have confirmed to us that had a Building Control application been made to them, they would have required Bess Limited to provide sufficient information "to ensure that a satisfactory technical solution is achieved and implemented for all land stability issues on the site and adjoining land arising as a consequence of the proposed development".
08 Bess Limited carried out and provided us with a copy of a condition survey on the retaining wall prior to their commencement on site, clearly demonstrating their concern over its stability and the potential for problems in this area …"
At that stage Mr Nash's fire was directed to the contractors Bess Limited. When they became insolvent he belatedly looked to Technotrade as...
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