Relicpride Building Company Ltd v Mr Roderick Charles Cordara and Another
| Jurisdiction | England & Wales |
| Judge | Lord Justice Kitchin,Lord Justice Moore-Bick,Master of the Rolls |
| Judgment Date | 13 March 2013 |
| Neutral Citation | [2013] EWCA Civ 158 |
| Docket Number | Case No: A1/2012/0161 |
| Court | Court of Appeal (Civil Division) |
| Date | 13 March 2013 |
[2013] EWCA Civ 158
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CENTRAL LONDON
COUNTY COURT
HHJ BAILEY
TCC09070
Royal Courts of Justice
Strand, London, WC2A 2LL
THE MASTER OF THE ROLLS
LORD JUSTICE MOORE-BICK
and
LORD JUSTICE KITCHIN
Case No: A1/2012/0161
David Holland QC (instructed by CKFT Solicitors) for the Appellant The Respondents appeared in person
This is an appeal against the judgment of HHJ Bailey dated 30 August 2011 and his consequential order dated 21 December 2011 dismissing the claim by the appellant (Relicpride) for payment of �35,000 retained from the sale price of a house at 2 Connaught Mews in Pond Street, Hampstead (the property) which is owned and occupied by the respondents (Mr and Mrs Cordara).
The retention is held by Mr and Mrs Cordara's solicitors as stakeholders. The judge held that Relicpride was not entitled to the retention or any part of it because the preconditions for its release had not been satisfied. The central issue on this appeal is whether the judge was right to so hold, and I believe it turns on the proper interpretation of the agreements under which the property was purchased and the retention held.
The relevant background may be summarised as follows. In the late 1990s, Faddian Holdings Limited (Faddian), a company incorporated in Jersey, acquired a site off Pond Street for residential development. It obtained planning permission and engaged Relicpride to carry out the necessary building work on its behalf.
In 2001, Mr Cordara, a Queen's Counsel specialising in commercial and tax law, and his wife, Mrs Cordara, an artist, were introduced to the development and on 12 June 2001 they entered into a written agreement with Faddian to buy the property which was at that stage in the course of construction. The agreement incorporated various special conditions of which the following have a particular bearing on this dispute. By special condition 11, Faddian was obliged to construct the property in accordance with particular drawings and specifications and in accordance with the appropriate planning consents. Special condition 14 provided that completion was to take place between 23 July and 15 August 2001. Importantly, by special condition 17, upon completion of the construction, Faddian was obliged to notify the Cordaras and allow them to inspect the property; the Cordaras were required to notify Faddian of any wants of construction which they found upon such inspection; and Faddian was obliged to use its reasonable endeavours to remedy any such deficiencies prior to completion of the sale.
In late July 2001, problems arose with the local planning authority, the London Borough of Camden (Camden). By letter dated 25 July 2001, Camden complained to Relicpride about the installation of air conditioning units for which planning permission had not been granted. Then, by a further letter dated 27 July 2001, Camden drew attention to a number of other discrepancies between the development and the approved plans, including a failure to install a canopy over the front entrance to the property, an omission which, it considered, detracted from the overall quality of the scheme.
Camden also had a difficulty of its own. The proposed development had attracted local opposition and Camden had engaged in a consultation process on the basis that the second floor of the property would be of a particular and rather modest size. However, it then proceeded to grant planning permission for the construction of the property with a second floor of rather greater size. This led at least one local resident to threaten Camden with proceedings for judicial review. Camden therefore entered into negotiations with Faddian which led to an agreement in principle to resolve Camden's difficulty on the basis that Faddian would construct the property with the smaller second floor which formed the basis of the consultation, and that any alteration to the second floor would be precluded by an agreement under s.106 of the Town and Country Planning Act 1990. By the end of July 2001, the construction of the smaller second floor had been completed but the text of the s.106 agreement had not been agreed. This was another issue raised by Camden in its letter of 27 July 2001.
The Cordaras had been keeping a close eye on the construction work and towards the end of July 2001 instructed their surveyor, a Mr Marshall, to prepare a list of outstanding works. On 31 July 2001, he carried out an inspection and shortly afterwards produced a report containing a list of items referred to by the parties as "the List of Snagging Items" or "the Marshall list".
The property was nevertheless fit for occupation and, despite the various outstanding matters to which I have referred, the Cordaras and Faddian were keen that the sale should proceed to completion. To enable this to happen, on 3 August 2001, the Cordaras, Faddian and Relicpride entered into three separate but interrelated agreements in writing, two of which are relevant to this dispute. The first, referred to as the Supplemental Agreement, was made between the Cordaras and Faddian and provided that completion should take place on that same day but that the Cordaras should retain �35,000 out of the purchase price. This agreement substituted the following terms for special condition 17:
"3.1.1. [Faddian] shall procure that [Relicpride] complies with its obligations in an Agreement dated 3 August 2001 and made between the [Cordaras] and [Relicpride] ("Relicpride Agreement") and if Relicpride fails to carry out its obligations then in default of the Seller carrying them out within a further month to indemnify the [Cordaras] in respect of the reasonable and proper cost of carrying out the List of Snagging Items (as that expression is defined in the Relicpride Agreement)
1. 3.1.2 The [Cordaras] shall retain �35,000 out of the Purchase Price which shall be retained by the [Cordaras'] solicitor as stakeholder ("the Retention")
2. 3.1.3 The Retention shall be paid to [Faddian] immediately upon the occurrence of the last of the following events:
a) completion of the Section 106 Agreement and the issue of the resultant Planning Permission in the form previously agreed with the [Cordaras'] solicitors;
b) the satisfactory completion of those works referred to in the Relicpride Agreement;
c) the issue by the District Surveyor for the London Borough of Camden of his certificate or other form of confirmation that the works referred to in this fax dated 30 July 2001 addressed to Liam Coyle of Relicpride Building Company Limited have been completed."
The second, referred to as the Relicpride Agreement, was made between the Cordaras and Relicpride. It reads, so far as material:
"1. [Relicpride] shall within the next two months carry out and complete
1.1 those snagging items set out in the attached list marked "List of Snagging Items";
1.2 the outstanding matters detailed in the District Surveyor's fax dated 30 July addressed to Liam Coyle of Relicpride bearing reference number 00/2/418.
2. [Relicpride] shall carry out and complete such further works to the Property in order to satisfy those objections of the Local Planning Officer set out in his two letters dated 25 July 2001 and the other 27 July 2001 both addressed to [Relicpride] in so far as they relate to the Property.
3. The [Cordaras] confirm that they will do all reasonable things necessary to assist in procuring completion of the Section 106 Agreement and the issue of the resultant Planning Permission including granting access to the Property on reasonable notice in writing and having been consulted prior thereto on the works required to enable [Faddian] to carry out any necessary works to it [Relicpride] making good all damage occasioned thereby and being a party to the Section 106 Agreement (if required by the Local Planning Authority) but without any obligation to incur any expense in doing so."
Completion duly took place. The Cordaras retained �35,000 out of the purchase price which they paid to their solicitors, Tweedie & Prideaux, now Veale Wasborough Vizards; they released the balance of the purchase price, amounting to about �2.2 million, to Faddian; and they moved into the property where they have lived ever since.
The agreements contemplated that all outstanding items would be addressed within a relatively short time and the retention would then be paid over to Faddian. But that did not happen and the Cordaras say it has never fallen due for a variety of reasons, as I must now explain.
First, the Cordaras say there has never been a s.106 agreement. Its substance was agreed in principle in early August 2001 but Camden deferred completion pending resolution of the other planning issues raised in its letters of 25 and 27 July 2001. Negotiations between Relicpride, Faddian and Camden continued over the next few months until, in February 2002, Camden changed its stance and indicated that completion of the construction of the property with the smaller second floor had superseded the need for a s.106 agreement but that a further application for permission should be submitted with revised plans showing the property as built. On 15 May 2002, a further application was duly submitted by Relicpride and, on 4 October 2002, planning consent was granted. From that point Camden no longer required the s.106 agreement and, as the judge found, was no longer prepared to enter into it.
Second, the Cordaras say that not...
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