Case Law Updates – April 2023
Avantage (Cheshire) Ltd & Ors v GB Building Solutions Ltd & Ors  EWHC 802 (TCC)
A fire occurred at a retirement village in Crewe on 8 August 2019, which destroyed almost the entire building.
As a result of the fire, the claimants (consisting of the PFI contractor and freehold and leasehold owners) are seeking damages from the Defendants (consisting of the contractor, architect, subcontractor, fire engineering consultant and employer’s agent).
The value of the claim is more than £40 million, on the basis that there were defects in the design and construction of the building and it lacked measurements for inhibiting a fire, including cavity barriers, sprinklers and compartmentation.
The claimants issued proceedings against the Defendants on 9 October 2019, but a stay was granted by the Court to allow parties to comply with the pre-action protocol and for investigations to be carried out.
A case management conference was held in October 2021, during which, directions to the trial were given and details of the expert witnesses were clarified, including the issues they were to address.
Two of these experts included, a fire engineer, Mr Wise who was responsible for providing evidence on the fire strategy, and a forensic scientist, Ms Hooton, who was responsible for providing evidence in relation to the causation, origin and spread of the fire.
During October 2022, parties attempted to settle the dispute via mediation and as a result, no longer complied with the timetable set out in the directions.
In February 2023, the claimants made an application to adjourn the trial (with the consent of all parties), due to an illness suffered by Ms Hooton. The application was successful and the trial was adjourned in later February 2023, until April 2024.
During March 2023 and due to the severity of Ms Hooton’s illness, the claimants issued an application to replace Ms Hooton, with another expert, Dr Ketchell to give evidence on the same issues. On the same date, the claimants also submitted an application to replace Mr Wise with Dr Ketchell, except the grounds for this application were vague.
Can Dr Ketchell replace the current experts, Ms Hooton and Mr Wise, and if so, do all documents relating to the dispute and in their possession (draft or final expert reports, meeting notes etc.), need to be disclosed?
The Court granted permission for the replacement expert, Dr Ketchell to:
- Provide evidence relating to the fire (origin, causation and spread) instead of the current expert, Ms Hooton, on the basis that Ms Hooton’s site inspection reports or note, and witness interview notes are disclosed; and
- Provide evidence relating to the adequacy of the fire strategy instead of the current expert, Mr Wise, on the basis that Mr Wise’s expert reports (whether draft or final), and any other documents produced by him relating to the dispute are disclosed.
For further information, please see: https://www.bailii.org/ew/cases/EWHC/TCC/2023/802.html
Toppan Holdings v Simply Construct  EWHC 2110 (TCC)
The Claimant (Toppan), a freeholder appointed the Defendant (Simply Construct), a contractor, to carry out works at care home in London.
Works were completed in 2016, however the Claimant and tenant discovered fire safety defects a few years later.
Instructions were given to the Defendant to remedy the defects, but the Defendant refused. The Claimant employed another contractor to carry out repair works and upon doing so, discovered additional defects.
Proceedings were issued by the Claimant requiring specific performance under the contract and successfully forcing the Defendant to execute a collateral warranty.
The Claimant issued adjudication proceedings against the Defendant, for the losses incurred (defects and remedial works). However, the Defendant argued the adjudicator lacked jurisdiction on the basis the warranty did not fall within the definition of “construction contract” under section 104 of the Housing Grants, Construction and Regeneration Act 1996 (“the Act”).
A decision was issued by the adjudicator in favour of the Claimant, requiring the Defendant to pay sums. However, the Defendant failed to do so and the Claimant issued enforcement proceedings.
The judge had to consider whether a warranty is a “construction contract” under the definition of the Act and therefore, whether the Claimant was entitled to issue adjudication proceedings, and enforce the adjudicator’s decision.
The court relied on previous case law, Parkwood Leisure Ltd v Laing O’Rourke Wales and West Ltd , where the classification of a warranty as a construction contract depended on if the required works had been completed or were due to be completed.
In the above case, the warranty was deemed a construction contract on the basis the works were yet to be completed.
However, in considering the current case, the court held the warranty had been granted for retrospective works. Therefore, it did not amount to a “construction contract” under the Act and the Claimant was not entitled to adjudicate, nor can the adjudicator’s decision be enforced.
For further information, please see: Toppan Holdings Ltd & Anor v Simply Construct (UK) LLP  EWHC 2110 (TCC) (27 July 2021) (bailii.org)
Clarion Housing Association Limited v Crest Nicholson Operations Ltd  EWHC 620 (TCC)
The Defendant entered into a contract with the Claimant to build 132 residential units at a site near Bury St Edmunds on 31 October 2018. In January 2022 the Claimant notified the Defendant of electrical defects with the works. A claim was issued on 11 February 2022 for defective works in an amount exceeding £200,000.
On 26 May 2022 the Claimant’s solicitors informed the Defendant that although the claim form had been issued it had not yet been served on the Defendant. Three days before the service of the Claim Form was due the parties agreed a stay of six months to allow discussions to take place and for rectification work to commence.
The Particulars of Claim were sent on 9 December 2022 via email to the Defendant with a cover letter stating that a copy was also sent by post. Unfortunately, the physical copy of the particulars of claim were sent to the Defendant’s registered address, however the representative of the Defendant did not work at that location and so did not receive the hard copy documents. The electronic version was not validly served as the Defendant had not communicated to the Claimant that such service was accepted. If the particulars of claim and the claim form were deemed to have been validly served on 9 December 2022 then the deadline for acknowledging service was 29 December 2022 (taking into account holiday days where the court is closed). The Defendant filed acknowledge of service on 5 January 2023.
The Defendant then filed on 18 January an application for relief from sanctions and a Part 11 challenge to the court’s jurisdiction.
The Claimant made an application dated 22 January seeking an order confirming the particulars of claim were served on time and in the alternative an extension of time for service by means of an order under CPR 3.1(2)(a) and 3.10.
- Whether the Defendant should be allowed relief from sanctions for late submission of their acknowledgement of service.
- Whether the application for Part 11 in challenging the court’s jurisdiction should be granted.
In assessing the Defendant’s application for relief from sanctions, Justice Kerr applied the three stage test established in Denton v TH White Ltd  EWCA Civ 906:
- Identify the non-compliance and assess the “seriousness or significance”
- Consider the reason for the non-compliance
- Consider the overall circumstances of the case so that the application is dealt with justly.
In his reasoning, Kerr J considered the defendant’s arguments being that the documents were sent to the wrong address and that the delay took place over the festive period, and so were insignificant. This was dismissed on the basis that it is standard practice to serve documents upon the Defendant’s registered office unless instructed otherwise. Further, the Defendant’s representative was made aware of the service of documents by way of electronic copy and that a copy was also sent by post.
The judge refused application for relief on the basis that the Defendant required the relief to be granted in order to make its Part 11 application. This was a double standard that would not permit, asking the court to excuse the Defendant’s default only for the Defendant to turn around and condemn the claimant’s default.
The Defendant’s application under Part 11 was dismissed as there was no valid acknowledgement of service under CPR 11.2, however Kerr J addresses the point of law on challenging the court’s jurisdiction. Kerr J rejected the argument from the Defendant that in Grant v Dawn Meats (UK) Limited  EWCA Civ 2212 it was established by LJ Coulson at  that during a stay “no steps in the action, by either party, are required or permitted”. Kerr J clarified that what is meant by this phrase is that during a stay a party cannot apply to the court or complain of a missed deadline that would have expired if the stay was not in effect. The existence of a stay does not nullify any steps taken whilst the stay is active.
For further information, please see: Clarion Housing Association Limited v Crest Nicholson Operations Ltd  EWHC 620 (TCC) (27 February 2023) (bailii.org)