Hunt & Ors v Optima (Cambridge) Ltd & Ors

Jubilee Mansions in Thorpe Road, Peterborough, a new four storey block of 26 flats, was developed by Optima (Cambridge) Ltd (“Optima”) between 2001 and 2004. 13 of the flats were retained by Optima for letting out purposes but the rest were sold mostly directly to long leaseholders, including the Claimants. The work was carried out by a number of different contractors. Strutt & Parker (“S&P”) was retained by Optima to carry out periodic inspections with a view to producing certificates to or for the benefit of potential purchasers, which would certify that based on those inspections the work had been constructed to a satisfactory standard and in general compliance with approved drawings and the Building Regulations. Optima agreed with the leaseholders to whom it sold back in 2003 and 2004 that the works would be completed to certain standards and requirements and as landlord it agreed to maintain, repair and renew the main structure of the overall building and common services. Unfortunately, as the years have gone on, a number of serious defects or deficiencies have emerged both within the flats and in the common parts and services such that the Claimants have issued the current claim against Optima and S&P (in various manifestations). Optima is said to have been in breach of its agreement with four of the Claimants to whom it sold back in 2003 and 2004 and in breach of its repairing covenant with all Claimants whilst S&P is said to have been negligent by way either of negligent misstatement or of a warranty or of some overarching tortious duty for failing to pick up 16 of the 19 defects or deficiencies complained of. There are interesting issues in relation to the tort and warranty claims, the scope of Optima’s various obligations and as to damages in particular in relation to remedial works to the common parts or services which may be established as being the liability of Optima.

The length of this judgment does not simply reflect the complexity of the issues (and there are some such issues) and the fact that there are 8 Claimants pursuing claims for 19 defects some of which directly affect their flats and others which impact on the building overall. It reflects also a lack of or belated agreements between the parties and their experts which is unfortunate.

The Claimants are:

All the Claimants were called except Mrs Sahi and Mrs Peace although I met both these ladies on a site visit. Without exception, I found all those Claimants called as witnesses decent, honest and reliable. I was particularly impressed with Mr Peace who with great courtesy and without exaggeration described the impact of a number of the defects which affected his and his wife’s flat.

Mr Khazai, the director of Optima involved at the time of the development and since, I felt, tried to help when giving evidence, although English is not his first language; certainly he was not dishonest in the sense of giving answers which he did not think were true. He seemed almost bewildered as to some of the complaints and his witness statement infers that the Claimants had acted unreasonably in pursuing a number of complaints. The fact that since proceedings have been issued a number of serious defects are accepted by Optima as needing extensive work undermines this bewilderment. I strongly got the impression however that his recollection of what happened in 2003 and 2004 was poor, contradicted for instance as it was on occasion by his own contemporaneous documents. I have no hesitation in preferring the Claimants’ evidence where it differs from his.

Mr Egford, the Third Defendant architect employed by S&P to inspect the works and certify, was honest but I felt that he was, as will be seen, too dependant on assuming that others were in effect doing his job for him. Time and again, he said that he relied on what Optima told him as to whether defective work had been put right or on the fact that the local Council building inspectors must have vetted various items of work. He does not seem to have differentiated between what S&P had quoted to do for Optima and what he was certifying to potential purchasers.

As for the experts, three experts of different disciplines (architect or design, engineer and quantity surveyor) were called by each party and there was one single joint expert valuer. With the parties’ agreement, the architect and engineer experts gave evidence simultaneously, what is known colloquially as “hot tubbing”; this worked extremely well with each of them dealing with each defect and being asked questions on it; they were then cross-examined separately on more overall matters. My views on the experts were:

Engineers:

Quantity Surveyors

The Sale Agreements between Optima and the 1st, 2nd, 5th and 6th Claimants were in similar form. Clause 1 contained definitions for the “Building”, the “Premises”, “Car Park”, “Estate” and “Premises” which were to be the same as those in the Lease. The Lease defined the Building as “Jubilee Mansions…shown edged in yellow on the plan annexed” and “the Premises” as “all that property known as [the particular apartment by number] more particularly described in the First Schedule together with the parking space numbered…” Clause 2 of the Sale Agreement, headed “Recitals”, referred to Optima as having “constructed the Building and Car Park on the Estate”.

Clause 3.1 of the Sale Agreement stated that Optima:

“shall cause the Premises to be completed in a good and workmanlike manner and with suitable materials pursuant to any Planning Permissions granted in respect of the Building so that the Premises shall be fit for occupation on completion and the Building will comply with all Planning Permissions and Building Regulations as soon as may be reasonably practicable…”

Clause 3.2 identified when completion, the granting of the Lease, was to take place with Clause 3.3 stating:

“In the case of any dispute between the Vendor and the Purchaser as to the state and condition of the Premises and their fitness for occupation the same shall be referred by either party to an independent chartered architect nominated by the Vendor whose decision shall be final and binding on the parties in connection with such dispute."

The Leases applicable to all the Claimants materially provided:

“1.4

“the Car Park” shall mean the area shown hatched yellow on the plan annexed

1.5

“the Common Parts" means the front doors the entrance halls stairs landing passages lifts storage cupboards bins stores cycle store garden land car park (except areas specifically demised in any Lease) footpaths and all parts of the Estate used in common by the Tenant with the tenants of the other parts of the Building…

1.10

"the Insured Risks" include fire…storm tempest flood bursting and overflowing of water pipes and tanks and other apparatus…and such other risks as the Landlord from time to time in his absolute discretion shall insure against…

1.13

"Pipes" means all pipes sewers drains mains ducts conduits gutters watercourses wires cables channels flues and all other conducting media and includes any fixings and any other ancillary apparatus…

1.19

"the Service Charge" means the sum calculated in accordance with the provisions contained in the Fourth Schedule hereto covering the items specified in the Fifth Schedule

1.20

“the Service Charge Proportion" means an equal proportion of the costs incurred in respect of the service charge calculated on the basis of the number of completed units in the Building

3 The Tenant covenants with the landlord:

.. 3.3 to pay the service charge proportion to the Landlord by way of further and additional rent subject to the terms and provisions set out in the Fourth Schedule hereto…

3.10

at all times during the Term well and substantially to repair clean replace and keep in good and substantial repair the whole of the interior of the Premises…

3.12

not to make any structural or external alterations or any additions to the Premises without the prior written consent of the Landlord

4 The Landlord covenants with the Tenant:

4.1

That so long as the Tenant complies with its obligations under the Lease he shall be permitted to peaceably and quietly hold and enjoy the Premises without any interruption or disturbance from or by the Landlord or any person claiming under or in trust for the Landlord

4.3

the Landlord shall:

4.3.1

at all times during the Term…insure the Building against loss or damage by the Insured Risks…

4.4

in case of destruction of or damage to the Building the Landlord shall as soon as is practicable reinstate the same…

4.6

The Landlord hereby covenants with the Tenant subject to the payment by the Tenant of the said Rent and the Service Charge and provided that the Tenant has complied with all the covenants agreements and obligations on his part to be performed and observe[d] as follows:-

4.6.1

To maintain repair decorate renew amend clean repoint paint varnish whiten and colour

(a)

the main structure of the Building and in particular but without prejudice to the generality thereof the roofs (which expression shall include any roof insulation materials or the like) and foundations external and internal walls (but not the interior faces of such parts of external and internal walls as bound the apartment or the rooms therein nor the doors exclusively serving the Premises in such internal or external walls) and timbers (including the timber joints and beams of the floors and ceilings thereof) external window frames main entrance doors chimney stacks drains gutters and external pipes thereof the passageways stairways and all Common parts of the building

(b)

the sewers drains channels watercourses gas and water pipes electrical cables and wires supply lines in under and upon the Building

(c)

the internal load bearing walls roof and floor joists of the Premises (but not including plaster or other surface material applied to interior faces of any load bearing walls whether internal or external or floor boards or ceilings)…”

The First Schedule defined the Premises, for instance in respect of Mr Hunt’s Penthouse:

“ALL THOSE premises known as Penthouse 1 situate on the 3^rd floor of the Building and shown edged red on the plan together with the parking space numbered 20 and edged in purple on the plan including

1 the plasterwork of the boundary walls of the Premises and the doors and door frames windows window fastenings window frames window sills and glass fitted in such window frames

2 the internal walls and partitions and plasterwork of the internal walls and partitions within the Premises and the doors and door frames fitted in such walls and partitions

3 the plasterwork of the ceilings and the surfaces of the floors including the floor tiling and woodblocks

4 one-half in depth of the space between the ceilings of the Premises and the floors of the apartment above but not the joists or beams from which the said ceilings are suspended one-half in depth of the space between the floors of the Premises and the ceilings of the apartment below including the joists and beams on which the said floors are laid and

5 All conduits that are now laid or may be laid within 80 years from the date of this Lease in or under any part of the Building and which exclusively serve the Premises…

7 the area of garden shown hatched on the plan

but excluding

8.

Any of the main timbers and joists of the Building not referred to as specifically included in the Premises and any of the walls [or] partitions (whether internal or external) except such of the internal walls and partitions and the plastered surfaces windows window frames and doors and door frames as are expressly included in this demise…

10.

any part of the Building lying above the surface of the ceilings or below the floor surfaces save as otherwise provided in the Lease

11.

the roof and foundations of the Building…”

The Service Charge was addressed in the Fourth and Fifth Schedules and was to cover "the expenses of maintaining repairing redecorating renewing mending cleaning repointing and repainting the Building and all parts of it” as well as various other expenses.

Jubilee Mansions comprises in effect two conjoined blocks, with Phase I at the rear and Phase II at the front, closer to the main road. Each phase has its own entrance, hall, stairs and lift. The Phase I roof is just over a metre lower than the Phase II roof. The overall building comprises a three storey facing brick façade (ground, first and second floors), with penthouses located on the fourth storey which is bounded by an almost vertical slate mansard roof. The ground floor has a beam and block suspended floor, supported off piled foundations with reinforced concrete ground beams. The inner leaf of the external cavity walls, the floors and all internal partitions have been constructed with a proprietary timber frame system. There are now 26 flats including four penthouses. There is no No. 13. One of the ground floor flats, that belonging to Ms Ransome, has an attached conservatory. Based on my site visit and the photographs, the Building overall and the flats which I visited are (at least superficially) attractive. Most if not all the flats comprise a reasonably sizeable sitting room and dining room or dining area, two bedrooms, kitchen, bath room and shower room.

The defects complained of were 19 in number, although one of the smaller items "cross smells" is no longer pursued. Briefly, the complaints are as follows (with the paragraph numbers matching those set out in the Scott Schedule in the pleadings) :

Optima had been in business since 1994, initially as a partnership, and was incorporated in 1996 as a property development and investment company which primarily became involved in residential developments, either as new build or by way of refurbishment. Mr Khazai was and is the managing director and had considerable experience in this type of work and operated as the project coordinator. Optima had a number of other personnel experienced in this work, including draughtsmen to the requisite architectural plans and specifications.

Optima purchased the site for Jubilee Mansions in early 2000. A firm called L J Gawn Associates ("Gawn”) was retained by Optima as engineers initially to investigate the site and later to provide structural and civil engineering designs. Optima carried out the architectural design and procured the requisite planning permission albeit with advice from Gawn. A company called Thermatech Timber Structures Ltd ("Thermatech") was approached with a view to them providing the timber structure which was to be supported off the ground floor. Indeed Thermatech quoted for these works on 25 May 2001.

It is not wholly clear when Building Regulations approval was sought. By early November 2001 certainly Gawn was sending technical documentation relating to the substructure to the Cambridge City Council Building Control officers; they had by then sent in timber frame details and calculations prepared by Thermatech. By the end of 2001 however site demolition had occurred and piling had commenced.

By December 2001, Optima had decided to secure the services of an architect to inspect the works from time to time and ultimately to certify in respect of each property to be sold that, in broad terms, it had been properly built. With that in mind Mr Khazai approached S&P and in particular Mr Egford at S&P’s Salisbury office in that regard. To that end, Mr Egford wrote to him on 7 December 2001:

“…I can confirm we would be pleased to make the necessary stage inspections and issue an Architect’s Certificate on completion relating to the above [117-119, Thorpe Road]…

Inspections would normally be carried out on hearing from you that the building has reached the following stages:-

1.

Damp proof course before backfilling of trenches

2.

First floor level

3.

Second floor level

4.

Wallplate level before roof commences

5.

Roof

6.

Plastered/second fix

7.

Completion

On satisfactory completion of each stage, we will let you have a certificate. The inspection will not include the testing of drains, electrical or piped services.

The charge for making inspections will be £850.00 plus VAT per visit. We will invoice after each visit and expect payment prior to the next. This assumes only one visit is require[d] for each stage and you are not carrying out a phased project which would involve other visits…

Lastly, the above does not include dealing with various solicitors queries for individuals purchasing the properties (except issuing copies of the certificates). We would deal with this for you but charge on an hourly basis as it is difficult to predict the input required as in our experience their requirements vary…”

There was a telephone conversation between Mr Khazai and Mr Egford on 10 December 2001 whereby the fee arrangements were by agreement altered from the above so that the fee was to be £8,750 plus VAT and expenses, made up as £350 times 25 units. At this stage there was therefore agreement between Optima and S&P. Mr Egford wrote to Mr Khazai on that day confirming this and asking him to "forward a complete set of the Planning and Building Regulations drawings together with the Structural Engineer’s details at your earliest convenience." He also enclosed S&P’s standard terms of business but it is unnecessary to refer to them as nobody suggests that they are material to the issues in this case.

There is little doubt that Mr Khazai and other Optima personnel took a close interest in the development, not only instructing Gawn and Thermatech but also in suggesting amendments to their designs. An example is a fax from Mr Khazai to Thermatech on 7 December 2001 adding additional noggins into the timber structure. Optima decided in effect as architectural designers the layouts and what was wanted where. They undertook the provision of details about doors and windows, including the Velux windows in the mansard roofs.

Whilst it is reasonable to infer that planning permission and building regulations approval had been obtained for the development, neither the witnesses nor the documentary evidence provided any clear indication as to what precisely had been approved. At most, the piling work started when there was only conditional building regulations approval dated 10 December 2001 (as later referred in a letter from Cambridge City Council which dealt with Building Control on 6 February 2002). Indeed, as will appear, material changes were made and there had to be further submissions to the local authority for amendments to the permission and approvals given. On 1 February 2002, Mr Khazai dispatched "copies of the Planning and Building Regulation drawings" but it is unclear whether these were complete or comprehensive. On 4 February 2002 S&P wrote to Gawn asking for details of the piling (which had not been clear to him before) and he asked for confirmation that the piles "were installed to your and the Building Inspector’s satisfaction." On the same day he wrote to Mr Khazai, having made his first inspection the week before, asking for details of the piled foundations the beam and block floor and the timber frame and trusses and or drawings submitted for Building Regulations and the written specification prepared by Optima.

Mr Egford visited again on 1 March 2002, although he classified this as Inspection No. 1. Like later certificates for Optima it was in these terms:

“In accordance with the terms of our letter of appointment dated 10^th of December 2001, we have today made a periodic visit to the property to inspect the progress and quality of the building work, to check as far as we are reasonably able to do so on a visual inspection, that the works have been carried out generally in accordance with the approved drawings, documents and the Building Inspector’s requirements and we certify that building work has now reached DPC level."

On the same day, he had a site meeting with Mr Khazai and another Optima employee, Mr Williams, and his notes record that he required Building Regulations details and floor and timber frame calculations.

It is unclear as to what extent Optima was supervising the work on the site. It had a Mr Cook as a site manager who seems to have had some supervisory responsibility. Matters seem to have gone wrong from an early stage. Thermatech wrote to Mr Khazai on 14 March 2002 referring to the "very serious matter" of the “load bearing walls and steels…very clearly not sitting on the required supporting/load-bearing foundations under". There was no written response. It is clear that Optima frequently changed the layouts of the flats, with some such changes being challenged by Thermatech such as on 3 April 2002 on the basis of them seriously impairing "the structural integrity and balance of the building"; indeed they asked that these modifications did not take place until it completed and handed over the entire building.

There were some discussions going on between Optima and Building Control about sound insulation, albeit that the disclosed documentation is clearly incomplete. Building Control wrote on 10 April 2002 about a proposed “RTC 151” sound insulation system from Lafarge Plasterboard Ltd, calling for more information.

On 24 April 2002, Mr Egford issued his second Certificate of Inspection in relation to the building work having now "reached roof level for Phase 1”. This ties in with the invoice from Thermatech of 22 April 2002 which suggests that the timber framed structural work on Phase 1 had been completed. Mr Egford wrote to Optima on 29 April 2002 asking (again) for details of the “floor construction/wall information” and "a copy of the approved Building Regulations drawings including sections and specifications notice." He recorded that he had received some structural engineer’s drawings and beam/block floor suppliers details. He also confirmed that changes were being made to the floor plans and he asked that the drawings should be updated to show this and that any changes should be checked with Gawn, Thermatech and the Building Inspector. He had clearly examined some drawings at this stage because he recommended that "movement joints should be provided within the brickwork to account for differential movement".

Formal planning permission was granted on 16 May 2002 in relation to 20 flats, with the penthouses to be the subject matter of a later planning application.

Optima retained a well respected trade organisation, TRADA (Timber Research and Development Association) to inspect the timber frame work done by Thermatech. TRADA carried out two inspections the first of which resulted in a report dated 27 May 2002 and related primarily to Phase I. 61 defects or deficiencies were noted although the report records that there was limited time to inspect on the third floor of Phase I.

There seems to have been some lack of coordination (at least on-site). On 2 July 2002, Thermatech complained that Optima’s officers had removed two load-bearing walls on the ground floor of Phase I.

On 17 July 2002 Mr Egford issued his Certificate No 3 certifying that the building work has reached the roof level of Phase I and third floor level on Phase II. The following day, he wrote to Mr Khazai identifying that seals had not been fixed around pipe ducts where they passed through the walls and floors. Mr Khazai’s response on 23 July was that he had taken on board Mr Egford’s comments and the work would be done to his satisfaction.

On 19 July 2002, Optima wrote to Building Control seeking approval to a modification to the floor construction, enclosing the original specification and a copy of the proposal. It was suggested that there would be "an impact insulation layer to [the] surface of [the] flooring, which is suitable for kitchens and bathrooms where surrounding tiling is likely to be used." This suggestion was ultimately never deployed. Attached was a "System Specification" prepared by Lafarge Plasterboard of a system known as “RTC 51” whose scope was defined as: "Ceiling framed using Lafarge plasterboard is mechanically fixed to the underside of timber joist floor" with Rockwool above. Floorboards were to be "tongue and grooved boarding". What are called "resilient bars” were to be fixed at right angles to the joists to accommodate impact noise. The "Acoustic Data Sheet" followed on 6 August 2002 which identified a laboratory test done on the RTC 51 system.

On 30 July 2002, Building Control provided an "updated conditional approval notice" under the Building Regulations. This approval however is expressly related to plans and details submitted on 19 October 2001. There is an undated poorly copied document in the Court bundles which lists some 15 "conditions to full plans approval” one of which is: "Details to be provided of NAMAS accreditation (or similar approved testing body) to verify minimum sound levels claimed by Lafarge. Impact sound levels for floors to be minimum 65 dB”. By this stage in any event the flooring had largely gone in on Phase I.

TRADA submitted its second inspection report primarily related to Phase II. This identified 17 deficiencies which were set out. In relation to the floor joists, it was noted that some metal joist hangers had not been fitted and others needed to have all their fixings applied. It identified a number of load-bearing walls to have been relocated. Photographs taken on 3 September 2002 were attached which highlighted some of the deficiencies noted. Very few of the ceilings had been put in and the underside of the floors was readily visible.

Mr Egford visited the site on 18 September 2002 and met with Mr Williams of Optima. Mr Williams said that he would send to Mr Egford a copy of the TRADA report. Mr Egford inspected the site and his notes record:

“1.04

QW advised the gutter system would be aluminium

1.05

The floor construction is still undecided. Steve Egford suggested the proposal is agreed with the Building Inspector prior to installation to avoid any future problems (latest thoughts are two layers of db check 15mm plasterboard on resilient bars fixed to underside of floor with hundred millimetre rockwool between-55RW/62db impact”.

It is unclear whether he carried out another inspection at this time but his Certificate of Inspection No 4 dated 20 September 2002 suggested that he had that day carried out an inspection and certified that "building has now reached roof level and first fix work is currently underway".

The disclosed documentation is lacking over the next three months. On 5 December 2002, Mr Egford issued his Certificate No 5 which certified that "roof work is 90% complete, plastering is nearing completion to Phase I”. His notes of inspection confirmed that he was belatedly given a copy of one of the TRADA reports. He met Mr Williams and his notes of inspection reveal:

“1.04

The ceiling is currently being installed and is 12.7 mm plasterboard fixed to resilient bars with an acoustic quilt laid between the floor. The building inspector has confirmed this accords with the Building Regulations.

1.05

An acoustic mat can also be laid above the chipboard floor, although QW advised this is not required to meet the regulations."

Internal floor layouts were being modified by Optima as late as February 2003 and on 21 February 2003 Optima sent to Building Control revised floor plans for the development.

On 6 March 2003 Mr Egford carried out another site inspection in the company of Mr Williams and Mr Talbot of Optima. Mr Williams confirmed that "he had completed all of the work relating to matters raised within the TRADA Report (instigated due to internal alterations)." Other notes of this inspection are:

“1.03

Quentin Williams advised that they had changed the specifications of the ceiling to 2 layers of 15 mm plasterboard, fixed to resilient bars and the acoustic quilt has not been installed. He confirmed Building Control are satisfied this complies with the Building Regulations…

1.07

Quentin Williams advised they are experiencing problems with the flat roof covering, which does not seem to be bonding to the decking/insulation.

Can details of the product used in the specification be sent to Steve Egford.

Steve Egford suggested manufacturers are contacted and their representative will inspect and either condemn or approve the installation and suggest work required, in order for any guarantee to [apply]”

He issued his Certificate of Inspection No 6 certifying "that the plastering is complete for Phase I and commencing for Phase II”.

The surface water drainage for the site as a whole had not been carried out by May 2003 because there was a continuing exchange about it with Building Control which continued at least until 12 May 2003. On 13 May 2003, Mr Egford issued his Certificate of Inspection No 7 certifying "that works are at various stages for each flat ranging from decorations to fitting of kitchens”. He had inspected the works in the company of Mr Talbot of Optima with the latter confirming that "the flat roof installers have revisited the site and cut out to affected areas of roof covering that has not adhered to the decking (this is in the region of 80-120m²)." It was confirmed that by this stage further planning permission had been granted for the roof space accommodation, namely the penthouses and that there were to be dormer windows in the front and rear elevations. It was confirmed that the roof openings within the flat roof were still leaking slightly.

It is not wholly clear when the flats began to be marketed but preparations were in hand by 21 May 2003 when S&P wrote to Optima to verify that its Professional Indemnity insurance cover was £5 million. This was material because the certificates to be issued to the new flat owner's were to identify that level of cover. A price list was produced in July 2003 for Phase I with 6 of the 9 flats shown as “Reserved”.

On 4 July 2003, Building Control confirmed that in respect of the conditional Building Regulations approval given on 30 July 2002 the conditions had "now been satisfactorily cleared”.

Mr Egford visited the site on 15 July 2003, his notes revealing that "the roof openings within the flat roof are still leaking slightly" and that Mr Khazai told him about the new planning permission and that dormer windows had been allowed for only on the rear and front elevations. This was to lead to Velux windows being inserted into the slate mansard roof at those locations. He certified on 16 July 2003 that "the works are at various stages for each flat ranging from completion (show flat) to decorations/tiling – phase II”. He offered to inspect on one or two more occasions to reflect the work involved in the new planning permission.

On 16 July 2003 Mr Egford wrote to Gawn (with a copy to Mr Khazai) as follows:

“I write regarding the above [the flats] as we are carrying out site inspections in order to issue an Architects certificate at the end of the project.

I would be grateful if you could send me a letter/certificate stating that all structural details have been carried out in accordance with your details and that you are satisfied with all aspects of the structure. As you may be aware, our clients are now utilising the roof space for 4 No. Flats which has leading implications for the structure.

We need the certificates in order for the purchasers’ and I would be grateful for this information as soon as possible as the sale of flats could otherwise be held up.

If you have any queries please do not hesitate to contact me and I look forward to hearing from you.”

Gawn replied on 18 July 2003 in the following terms:

“…3. We were not responsible for the design of the timber framed structure. This was provided on a design, fabrication, supply and erection basis by Thermatech Ltd. You will need to discuss any particular structural matters in this respect with offices.

4.

We liaised with Thermatech Ltd to establish load-bearing alignment for the four-storey construction at foundation level. We dealt with structural design matters up to ground floor slab level. We would confirm the substructure design was approved by the Building Control Officers at Cambridge City Council under a partnership agreement with the developer, and that subsequent site inspections were agreed with the Building Control Officers at Peterborough City Council.

5.

We did not supervise the substructure works, but visited site to inspect on several occasions during works in progress. The works up to this level were suitably completed, and details inspected/agreed with Checking Engineers and local Building Control Offices.

6.

We have latterly been involved in agreeing engineering aspects of the external works proposals. These are virtually complete, with design details agreed with the Drainage Engineer for Peterborough City Council, reflecting requirements of the Environment Agency are with respect to storm water discharge from the site into the adjoining watercourse through a series of catchpits and petrol interceptor for run-off from the parking areas.

We would confirm that the matters in which we have been involved here have been satisfactorily addressed, reflecting points noted above. Any comments in relation to the timber framed will need to be addressed by Thermatech Ltd…”

Mr Egford was clearly preparing himself for the issue of the first certificates for potential purchasers. He wrote to Optima on 21 July 2003 as follows:

“…There are a number of points that require clarification before I can issue certificates in order to satisfy the Council of Mortgage Lenders requirements which will be required by the solicitors/building societies as follows:-

1.

A copy of the Planning Consent

2.

Building control completion certificate

3.

A certificate/letter from the Structural Engineer (I have written to him directly on this and copy of the letter to you).

4.

An Electrical completion certificate

5.

A CORGI certificate relating to the gas installation…

7.

Confirmation all work as requested by TRADA has been carried out in accordance with their report…”

Mr Khazai replied on 22 July 2003, enclosing the planning consent, indicating that the Building Control completion certificates had not yet been issued and stating that the Electrical and CORGI certificates would be forwarded. He said that "all work requested by TRADA has been carried out in accordance with their report."

By this time, Optima had retained solicitors, Irena Spence & Co (“ISCO”), to handle the conveyancing to purchasers. On 23 July 2003, Mr Egford sent a draft Architects Certificate "for her reference". On 29 July 2003, he wrote to Peterborough City Council asking for their confirmation as to whether there were "any outstanding unresolved issues relating to this development" and for confirmation in relation to Building Control matters that:

“1.

All of the conditions attached to the original approval notice had been satisfied.

2.

Any alterations to the approved scheme have been approved."

This was replied to by e-mail on 15 August 2003 with Building Control indicating that "all conditions of the plans of approval had been cleared by Cambridge City Council" and that the author would "shortly be inspecting each flat with a view to issuing individual completion certificates".

By the end of July 2003, Ms Wyatt and Ms Ransome (the 5^th and 6^th Claimants) had instructed solicitors who were communicating with ISCO who wrote for instance to Ms Wyatt’s solicitors on 29 July 2003 enclosing amongst other things the "draft Architect’s Certificate" produced by Mr Egford a few days before and further stating:

“The Sellers still await the Building Regulation final inspection certificate together with the final architect’s certificate and these will be forwarded to you as soon as they are available….

Your client will have been made aware of the fact that further works of construction are intended at the site. It is intended to convert the top floor of the building as it currently stands into further flats. Planning consent in respect of that work is currently awaited. It is anticipated that the work will take approximately 6 months to complete…”

A similar letter was sent to Ms Ransome’s solicitor on 31 July 2003 and indeed to the other Claimants who purchased in 2004.

On 30 July 2003 S&P wrote to Thermatech stating:

“…1. Can you confirm you are satisfied that items identified within the Trada Report[s] carried out on 27 May 2002 and 4 September 2002 have been complied with. The inspector itemised a number of issues for your attention.

2.

I have been advised by the consultant Structural Engineer…that you were responsible for all of the structural design above ground floor slab level, including the steel work within the structure. Could you please confirm this and all alterations (which are also referred to in the Trada report) have been carried out in accordance with your calculations.

3.

The developers intend to include 4 no flats within the mansard roof space. Can you confirm that this accords with the Structural Design.

I would be grateful for your response at the earliest convenience on these and other matters to be resolved in order that a completion certificate can be issued, which if it is not will delay the sale of the flats."

A chasing letter was sent on 11 August 2003. There was never any response.

On 11 August 2003, Mr Egford wrote to ISCO saying that he was “not in a position to issue a certificate at this stage as I am awaiting information from various parties including the Structural Engineer and timber frame suppliers."

Gawn wrote to Mr Egford on 22 August 2003 stating that “Thermatech Ltd were responsible for all superstructure design elements of the main apartments…both Cambridge and Peterborough City Councils have confirmed that structural matters had been satisfactorily addressed.". It continued:

“We understand that all of these structural matters referred to in the Trada reports were addressed during works in progress. We were not appointed to carry out the site inspection. We were only asked to visit site to deal with specific matters noted by architects as, and when, they arose. Our client is advised that they dealt directly with the Trada enquiries during the main construction phase and did not authorise payment to Thermatech until such issues were resolved…”

Mr Egford replied on 29 August 2003 asking Gawn to "clarify your statement that appears on a few occasions –‘we understand’, and particularly from whom, e.g. the building inspector, client etc…” Gawn responded on 4 September 2003 saying that this related to advice given by Optima.

At about this time, there were discussions between Ms Ransome and Optima about the possibility of there being added to what was to be conveyed to her a conservatory, given that her flat was to be on the ground floor. I will return to this later in the judgment.

On 5 September 2003 Building Control at Peterborough issued "Certificates of Completion" in respect of Flats 1 to 9 on Phase I identifying a "Completion Date" of 3 September 2003; these documents "certified that the building works described above have been inspected and so far as the authority has been able to ascertain the requirements of the Building Regulations are satisfied." These certificates were passed on to Mr Egford on 8 September 2003

On 9 September 2003, Mr Egford wrote to ISCO saying that he was "now in a position to issue certificates for apartments 1-9”, in Phase I. ISCO replied on 10 September 2003 saying that it would "advise you of the names of the purchasers and their mortgagees as Contracts are exchanged in connection with each of these properties". ISCO also sent to him a different version of the certificate which was in the Contract Mortgage Lenders form, about which they had communicated previously. Mr Egford agreed by his letter in reply dated 12 September 2003 that the certificate would be in that form, saying that he would “action this upon receipt of the names of the purchasers."

Ms Ransome was the first of the Claimants to exchange and complete on the purchase of her ground floor flat in Phase I, this being on 19 September 2003. She was followed by Ms Wyatt on 15 October 2003 albeit that completion took place two days later.

Mr Egford visited the site on 2 December 2003 and met Mr Khazai. The notes has of his inspection are informative:

“1.

Plans showing the proposed layouts for the 3^rd floor are required for consideration by all parties - Structural Engineer, Building Inspector etc

2.

The roof was inspected with the following comments

a.

Some of the fixings for the edge trim do not have their caps fitted.

b.

Some of the screws have not been fully fixed.

c.

The roof covering itself is badly ‘rucked’ and is holding water.

d.

The roof covering has been patch repaired. See photographs for above 1-4.

Details of the roof covering are required and confirmation from the manufacturers/fixers that it complies with their guidelines and is in accordance with their recommendations and their guarantee that this will be maintained. This has implications for all flats but particularly those on the third floor…

1.08

All test Certificates are required for the building.

•

NICEE

•

Gas Installations

•

Installations.

1.09

The situation regarding the conservatory to the rear of the property to be considered. Has Planning Permission being granted.

1.10

The tiling around the Velux at roof lights to the side elevation facing the car park is poor and needs to be to the standard as to the other side of the building. See photograph 6.

1.11

Some of the purpose made roof trim appears to be lifting (also see comments regarding fixing)…

1.17

Acoustic quilt should be fixed between 3^rd floor flats to at least the same standard as the lower floors and in accordance with the Building Regulations."

He visited again on 10 December 2003 and recorded as follows

“1.01

Plans showing the proposed layouts for the 3^rd floor are required for consideration by all parties, structural engineer, building inspector etc. (requested 2^nd December 2003)…

1.07

There is a leak to one of the roof lights which is being attended to…

1.09

The junction of the dormer windows and roof is poor even when viewed at ground floor level. Expanding foam sealant has been used and is visible and unsightly. These junctions should all be checked for adjusting (i.e. weathertight) and trim made good where required."

On 19 December 2003 completion took place in relation to Flat 17, the purchaser being a Ms Leach who was later to sell it on to Mr and Mrs Peace, the Seventh and Eighth Claimants.

On 22 January 2004, Mr Egford issued the first of his Architect’s Certificates in relation to an individual property, Flat 5, which was and is owned by Ms Wyatt. Shortly before 12 February 2004 (probably on 10 February), he visited site, this being at least his 11th inspection and he wrote to Mr Khazai on that date saying that he was "concerned regarding some issues with relation to the open plan layout of one of the apartments and the building inspector should be contacted to ensure he is satisfied" and that "some of the queries raised on previous occasions also remain unanswered". His inspection notes are not available.

Mr Hunt, the First Claimant, had become interested in one of the penthouse flats towards the end of 2003 but the penthouse works were still in the course of being carried out and completed. It is clear that an additional window, over and above that allowed by planning permission, was installed and by 11 March 2004 that had been removed. There were delays partly relating to the state of the works and possibly also conveyancing delays in relation to Mr Hunt’s flat. Finally, the sale agreement and completion took place on 15 April 2004. The Building as a whole was completed in late April 2004.

Mr Egford was approached on 19 April 2004 by ISCO for his certificate in relation to Mr Hunt’s flat. He e-mailed Optima on that day saying:

“I have not been to site since [F]eb 10th and would be grateful if you could update me regarding progress since then…are all the works now fully complete?

My records show I do not have completion certificates for all the services and I require these as a matter of urgency.

I have also raised a number of issues following previous site visits but do not have any acknowledgement that these had been dealt with…could you clarify…”

Optima’s response by e-mail on 26 April 2004 explained that the electrical certificate was still awaited and that it was thought that the final inspection by Building Control would be carried out within about one week. Mr Egford wrote to ISCO on the same day saying that he was still awaiting information from Optima before he could release the certificate for Mr Hunt’s penthouse.

By the end of May 2004, complaints were coming in from some of the Claimants particularly in relation to leaking. Mr Hunt had moved into his penthouse flat on 15 April 2004 and on 17 April 2004 there were extensive leakages through the ceiling in numerous places; he contacted Optima very shortly thereafter. Ms Ransome who had moved in to her flat on 19 September 2003 had no hot water and was then told by Optima that the problem was due to underground leaks. Ms Wyatt had reported leaks from her bathroom into the flat below, which Optima personnel told her came from pipes within the floor of her flat; she also wrote to Mr Khazai on 28 May 2004 about a serious and "continuing leak through the ceiling of the cloakroom".

Mr Egford was becoming perplexed about the failure of Optima to provide him with Electrical Completion, Building Regulations Completion, Gas Installation and Lift Installer’s Test Certificates and he wrote in that regard to Optima on 9 June 2004 saying:

“I cannot issue any further Certificates for this development until I am in receipt of this information and this will also mean that Certificates issued will become void as they were issued on the basis this would be forthcoming.".

The Certificates issued up to that date had not been qualified in any way in fact, at least so far as the recipients were concerned. He wrote in similar terms to ISCO on 11 June 2004. Some certificates were copied onto Mr Egford but he expressed concern to Optima on 8 July 2004 that the electrical certificates supplied had not been signed and it was unclear that the testers were appropriately registered; he felt accordingly that he could not complete any further certification.

On 18 and 19 October 2004, Flat 14 was sold and conveyed to Mr Bedwell, the Second Claimant. Like others, he experienced leaks into his property on the very same day that he moved in (21 October) and he spent the first weekend mopping up his lounge/kitchen area which had been completely flooded. Optima’s representatives visited the following Monday (25 October) and took apart the boiler and inspected the flooring which had already started to warp. Although Optima agreed to replace the flooring, this has not yet been done and the floor is still warped. Matters did not improve. On 14 January 2005 his kitchen ceiling collapsed due to the weight of water leaking; four days later his bedroom and bathroom ceiling caved in on him while he was sleeping. In all his ceilings have suffered leaks on at least 14 occasions up to and including 2012. By the end of 2004 he and others were complaining to Optima about what Mr Bedwell described as "the dreadful smell of raw sewage". The smell made him feel nauseous.

Ms Wyatt wrote to Mr Khazai in March 2005 complaining that she was being asked to pay various invoices from Optima for repairs. She referred to repeated problems with the boiler and the fact that her tenant had been left with no hot water or heating for 2 weeks; she also referred to the toilet leaking causing rising damp and the floor tiles to lift. She said that she could not "believe the amount of shoddy workmanship that has taken place" in her flat and that most "of the problems seem to [be] with the plumbing". There seems to have been no written (if any) response. Problems continued with the plumbing in her flat, as recorded in her plumber’s letter to her of 20 December 2005.

The first written record of problems with noise is contained in a letting agent’s inspection in respect of Flat 5, belonging to Ms Wyatt, which had been let out:

“The Tenant said that the people in the flat above have had ceramic tiling put down in every room and he can hear every time they move around the flat. He said on Monday night he only got 3 hours sleep. He has spoken to the managing agent who has said there is little they can do. He said that if something cannot be done about it he will not be renewing his contract as he feels he is paying a lot of money each month to have that amount of disruption."

Another purchaser (of Flat 7), a Mr Davis, wrote in October 2005 referring to the fact that his flat had been flooded on seven occasions in the last 18 months for three given reasons, faulty pipes, rain through the roof and overflowing apparatus. He also referred to there being "a heavy stench of sewage".

On 10 February 2006 Mr and Mrs Peace bought Flat 17 from the original purchaser, with the conveyance being completed on 17 February 2006. Like others before them, they immediately (within three days of moving in) experienced a leak from their shower into Flat 12 below. Since that date their flat has been subject to leaks and floods on numerous occasions and by the autumn of 2006 had themselves carried out extensive further work. Their main bathroom has suffered from leaks since 2006 and has twice been redecorated due to water damage; indeed so concerned were they that water from the bath might flood occupants below they have not used their bath since 2006. Their flat has suffered on numerous occasions from leaks from the flat above including very recent ones; Mr Peace mentions 21 leaks, almost all of which are recorded in correspondence (mostly e-mails from him to Optima). For instance, on 15 December 2006 Mr Peace e-mailed Mr Khazai saying that water was leaking into the shower room and bedroom from the flat above.

By the middle of 2006 many of the owners in effect decided to form an unofficial group and the owners of Flats 1, 4, 6, 7, 9, 12, 14, 17, and 19 and Penthouse 1 attended a number of meetings. They first appear to have met on 28 June 2006 and their notes or minutes were forwarded to Optima. The first identifies "ongoing issues with individual apartments"; although a comprehensive list was attached, it is not within the court papers but I infer that it at the very least included complaints about the leaks. Item 10 identified that there had "been an ongoing bad smell issue in various flats and this needs resolving". Item 16 identified that "external gutters and downpipes need to be fitted correctly and cleaned, as rain water flooding is continually leaking at the joints and causing additional damage to property. It appears that downpipes from gutters are inadequate, and overflow in heavy rain."

Ms Ransome e-mailed Mr Khazai in the minutes in a reasonably pleasant way:

“We would like to say that we all like living at Jubilee, and really love the flats that you have built.

Unfortunately, our lives are being affected by our relationship with Optima. It appears that there are many disputes between individual flat owners and yourself.

We are also very concerned about the lack of contractual management and maintenance of the building.

We would very much like to work with you, amicably, to resolve all the individual issues, and the general upkeep of the building."

Mr Khazai responded on 4 July 2006 in a three-page letter saying that any individual flat snagging would be dealt with directly with the flat owner. So far as the bad smells were concerned Optima "would redouble our efforts to see what the problem is"; staff were being sent that day to unblock the gutters. He hoped that everyone could move forward in an amicable way. Ms Ransome, having consulted the other flat owners, replied by e-mail on 13 July 2006 referring to the fact that all the owners had “issues with our individual apartments that in some cases are ongoing for over two years" and referring to "unsatisfactory management of the building".

The notes of the next meeting on 26 July 2006 referred again to smells still seeming "to be present” and the presence of "sewage smells…noticed by all attendees". The gutters were recorded as not having been attended to. Ms Ransome sent these minutes to Mr Khazai.

Ms Ransome had a "rather strained half-hour conversation with" Mr Khazai on 1 August 2006 in which he suggested that the tenants were mixing two different issues, snagging and maintenance. He indicated that Optima did not have any ongoing obligation to make repairs and suggested that there were funding issues. On 8 August 2006, he e-mailed her saying that, with regard to water cascading down the wall, "unfortunately the gutters can't cope with the intense torrential rain that we have been having, you only need a few leaves or slate to block it".

On 6 September 2006, there was a Jubilee Mansions residents meeting at which a number of complaints were recorded including the bad smell which was minuted as still being "an ongoing problem that needs to be addressed by Optima" and the external gutters which "continually leak during periods of rain". The notes record that all attendees believed that Optima was in breach of contract in relation to amongst other things the roof and sewers.

On 29 September 2006 Mr Egford informed Mr Khazai that he was due to leave S&P within a few weeks and would issue the certificates for various apartments not already issued in Optima’s name. On 13 November 2006 he wrote again confirming that he had issued certificates for Flats Nos. 4, 5, 11, 12, 14 and 19 together with Penthouse 1. He said that he was awaiting electrical certificates and Building Control Completion Certificates for various other flats but he could issue certificates for a number of other Flats including Nos 15 and 17. He was to issue his certificate in relation to Flat 15a under cover of a letter dated 15 December 2007, this flat being bought by the Third and Fourth Claimant in December 2007.

Ms Wyatt’s maintenance firm recorded on 14 November 2006 that it understood "that the entire building has a sewerage problem which affects all flats". She passed that on to Optima several days later. Problems continued with leakages. For instance Optima wrote to Ms Wyatt on 12 March 2007 complaining that one of her pipes burst and let a lot of water down into the flat below" and sought to suggest that it was her responsibility. The flat owners met again in March 2007, writing to Optima on 29 March 2007 complaining amongst other things about the offensive smell problem (apparent since residents moved in), the overflowing gutters and roof leaks including a reference to missing tiles. Ms Ransome had a conversation with Mr Khazai on 3 April 2007 in which he said that he was not happy with the contents of that letter. There was a discussion about replacing the management company which had been retained by Optima to organise appropriate maintenance.

As from 1 September 2007, a new firm, Francis Butson & Associates ("FBA") took over the management of Jubilee Mansions; it was retained by Optima. It seems to have been the case that FBA made a reasonable impression upon the owners of flats, with, for instance, the owner of Flat 4 writing to them in February 2008 saying that the cleaners and gardeners introduced had done an excellent job.

Mr and Mrs Sahi who moved in to Flat 15a before Christmas 2007 suffered their first problem within days of moving in when the boiler "made a big bang and unfortunately didn't work", the flue being wrongly fitted. In January 2008, they received several letters from their neighbour below in Flat 11 complaining about noise from Flat 15a such as furniture being moved across the floor and walking around the apartment. He describes this in a note which they wrote: there "was an awful situation as we found ourselves tip toeing around the home"; they spoke to Optima about the problem who told them that the appropriate insulation had been fitted. At a later stage when floorboards were taken up to deal with leaks, they were told there was no insulation under the floorboards.

Serious leakage has occurred over the years in Mr Hunt’s penthouse flat. Examples were leaks in February and November 2008 and February and August 2009 and on Christmas Day 2010 when he woke to find melted snow dripping through to areas of the ceiling onto the floorboards and the pool table in the larger bedroom.

The occupiers of Flat 16 (Mr and Mrs Davenport) through solicitors wrote to the occupiers of Flat 20 complaining about "ongoing noise nuisance". Although proceedings were threatened, it appears that no litigation was instituted. However Mr Davenport wrote to Mr Peace on 4 February 2009 about water ingress problems from the flat above which caused his bathroom ceiling to collapse. However he described noise as being "now our key problem", his suspicion being that "Optima having failed to use sufficient soundproofing between floors in the block." The Flat 4 owner wrote to Mr Peace by e-mail on 10 February 2009 saying the gutters had always been unable to deal with a heavy rainfall, referring to a serious flood within his property, planning problems and going on:

“The sound insulation is, as we all know, hopeless. I cannot believe that it meets any reasonable spec whether the architect’s or the Building Inspector."

Most of the current Claimants and several other flat owners had banded together and instructed solicitors. On 1 April 2009 those solicitors wrote to S&P and Mr Egford complaining that the certificates issued by Mr Egford "were issued incorrectly and negligently in that the properties were not constructed to a satisfactory standard, and/or (possibly) in compliance with the Building Regulations." Examples were given, namely "defective roof and defective guttering… leaks in external and internal plumbing and consequent floods [and] lack of or shortage of sound insulation." They suggested that the recipients should arrange a full inspection and suggesting that, if there was no effective response, they would obtain appropriate expert evidence. S&P arranged a visit in May 2009. However, it took until 17 September 2009 to respond when it said that it had "reviewed the defects being reported", that the various installations "conformed with the Building Regulations at the time of construction", that S&P was not retained "to fully contract manage or specify the construction" and that Mr Egford’s certificates had been issued "correctly".

Mr Peace e-mailed Mr Khazai on 18 May 2009 suggesting that Optima should take the opportunity in the flat above (recently vacated by Optima’s tenants) to install "flooring which incorporates suitable sound deadening material, since we find that the noise above is excessive and detrimental to our enjoyment of our property". Optima's response was that if it "changed the flooring above you the whole place would need to be changed as it is unfair to change one and not get everyone to change [theirs]". Mr Peace’s response was that the tenants had

FBA arranged for a roofing contractor to inspect the roofs. He reported on 1 November 2009. The Court bundle is incomplete about the references to problems with the slate roofing but there are photographs of what appears to be a poor state of affairs on the flat roofs, together with standing water. It was very obvious that there were serious problems with the roofs.

The noise problem has been experienced by most tenants. Mr and Mrs Sahi experience serious noise problems including from the occupants of a flat two floors above, this being referred to in an e-mail from them to Optima on 3 March 2010.

It is clear that by May 2010 FBA were having problems with Optima and felt by 27 May 2010 that they had no choice but to resign as managing agents because, as they wrote to Mr Peace on that day:

“It has been a difficult decision but we have not been able to manage the property as effectively as we would like to do the lack of co-operation from the freeholder, Optima…

As to the future, our suggestion is for you and your fellow leaseholders [to] get together to form a Right To Manage (RTM) company which has, subject to various conditions, the right to manage their own building. The members of the RTM company can either carry out the management themselves or appoint a managing agent such as [FBA] we would still be willing to manage the property but not with Optima as our client…"

FBA gave notice to Optima on the same day. On 10 June 2010, Ms Ransome filed an application under Section 24 of the Landlord and Tenant Act 1987 for the appointment of a manager for Jubilee Mansions by the Residential Property Tribunal Service of the Leasehold Valuation Tribunal. I infer that this was done on behalf at least of a number of the occupants and the given grounds included the alleged "failure of Optima to manage and/or maintain the building" and "poor build quality being made worse by sloppy repairs by Optima".

Proceedings having been issued by the Claimants on 23 March 2010 in the Peterborough County Court, they were served on or before 23 July 2010 by the Claimants’ then solicitors.

On 29 September 2010, a contractor (Manor Roofing) approached by Optima produced a quotation for the re-covering over the existing roof at Jubilee Mansions in the sum of £43,455 plus VAT plus if required additional insulation for £12,496 plus VAT.

Various flat owners (who are not Claimants) put in statements for the Tribunal which tell a similar tale to that put forward by the Claimants in this case. For instance Mr and Mrs Davenport from Flat 16 complained about leaks (caused by appalling work done by the original plumbing contractor) and sound problems in that there "doesn't appear to be any insulation between the floors of the building which will really affect the quality of life in these flats when someone (particularly kids) is living in the flat above." Mr Khazai submitted a statement also to the Tribunal, which is not in the Court bundle. Mr Butson’s statement gave examples as to how FBA’s management had been hampered by Optima which included that Optima carried

The Leasehold Valuation Tribunal issued its decision on 1 December 2010 following a hearing and site visit which was to the effect that Mr Butson should be appointed Receiver and Manager of Jubilee Mansions for three years commencing on 1 January 2011. The Decision refers to a number of the defects pointed out to them including the roof onto which Tribunal members were able to climb; they record ponding of water and felt which had lifted and bubbled and distorted in many places as well as a lot of rubbish. The tribunal found that the relevant person namely Mr Khazai was in breach of obligations under the tenancy agreements, that unreasonable service charges had been made and that other circumstances existed which made it just and convenient for an order to be made of appointing a Receiver and Manager.

By 10 December 2010, Optima was accepting that it would itself pay the cost of the repairs to the roof based on Manor Roofing’s quotation and the repair in the car park area where the drain at the edge had fallen away. This was contained in its letter to the Claimants’ then solicitors of that date. The Residential Property Tribunal Service advised him on 6 January 2011 that such work would have to go through the newly appointed Receiver and Manager.

By this stage Mr Chick had been appointed and had secured a report from specialist plumbers who had visited five of the Claimants’ properties. The author’s overall impression was that “the standard of workmanship is poor, inadequate, not to current regulations, and would fail to pass a thorough inspection by building control, the plumbing and heating works". He found poor connections of appliances within the kitchens and waste pipes which were not secured with proprietary brackets. FBA sent plumbers to the site in March 2011 after complaints about foul smells. They removed 100 gallons of water and sewage from the ground beneath the building.

Thereafter, the matter has proceeded through the litigation.

Given possible limitations problems, the Pre-Action Protocol was not followed before the Claimants’ Claim was issued on 23 March 2010 and consequently some time elapsed after service in July 2010 whilst this was done after the event. It should be pointed out that there are no third party or contribution proceedings between the Defendants.

The Claim against Optima is essentially of two types. The first relates to breaches of Clause 3.1 of the Sale Agreements, claims for such breaches being maintained only by Mr Hunt, Mr Bedwell, Ms Ransome and Ms Wyatt. Mr and Mrs Sahi did purchase their flat directly from Optima but the Agreement for Sale did not contain Clause 3.1. Mr and Mrs Peace were subsequent purchasers who did not have an assignment of any rights of action from the first purchasers of Flat 17. All the Claimants claim against Optima for breach of Clause 4.6.1 of each of their Leases, this being what I will call the "repairing covenant" although, as will be seen, it goes somewhat further than repair. Optima is said to have been in breach of Clause 3.1 of the Sale Agreements and of Clause 4.6.1 of the Leases in relation to all the defects briefly described above. Damages are claimed against Optima in relation to the remedial work costs and also to various miscellaneous and specific costs incurred by individual Claimants, together with general damages for discomfort and inconvenience. The total loss claimed, albeit no longer pursued in its entirety, was over £2 million. Specific performance was claimed originally against Optima in effect to require it to carry out the requisite works under Clause 4.6.1 but by way of re-amendment to the Particulars of Claim damages in lieu of specific performance are claimed.

Optima’s Defence (by way of amendment) pleads that any causes of action under Clause 3.1 of the Sale Agreements on the part of Ms Ransome and Ms Wyatt are barred by limitation because their flats had reached practical completion in September or at the latest early December 2003. It generally denies that it was in breach of Clause 3.1, save for several matters for which liability is admitted in the Scott Schedule. Issue is taken on the damages claimed and, for instance, it is said that the First to Sixth Claimants cannot claim for the cost of remedying admitted defects where Optima has confirmed its intention to have those works carried out at its expense but it is accepted that it is not able to seek a contribution from them in respect of the admitted defects through the provision of the Service Charge. Issue is taken in the Reply to that Defence that the cause of action is barred by limitation.

So far as the case pleaded against the Second to Fourth Defendants is concerned, the Claim is now put in three ways. First it is said that that the Certificates, issued in respect of the Claimants’ properties by Mr Egford and, vicariously S&P, were enforceable warranties. Secondly, it is said that the Certificates amounted to negligent misstatements which give rise to a cause of action in tort. Finally it is said that Mr Egford on behalf of S&P owed a duty of care to the Claimants to carry out the professional services referred to on the Certificates with reasonable skill and care for the purpose of the subsequent production of the Certificates. In relation to all of the defects as set out in the Scott Schedule (except Items 2, 4 and 9), it is said that Mr Egford and S&P were in breach of warranty or negligent as the case may be. So far as damages are concerned, damages for breach of warranty and for negligent misstatements are put on the basis of capital diminution as at the date of acquisition of the relevant flat but damages for breach of the general duty of care are the same as those pleaded against Optima. Mr Egford is said to be liable as the person who actually did the inspections and issued the Certificates whilst S&P is said to be liable in effect vicariously for him. The case against the Fourth Defendant is said to be based on vicarious liability because it is said, in the alternative, it ultimately in time was responsible for him.

The Re-Amended Defence of the Second to Fourth Defendant raises a number of defences. In relation to Ms Wyatt, it is said that her claim is time-barred because the certificate for her was issued in January 2004 more than six years before the issue proceedings and she exchanged and completed her purchase in late 2003. It is said also that the claim by Ms Ransome in so far as it is based on breach of the general duty of care is barred by limitation because the cause of action accrued when she purchased her flat in September 2003. It is said that Mr Egford did not assume any personal liability to the Claimants as he was always in the employment of S&P and that S&P LLP was not incorporated until 1 February 2008 at a time when Mr Egford was no longer working for S&P in any form. Liability is denied in relation to all the defects. It is denied that there was any material reliance by any of the Claimants on the Certificates which were issued or on anything which Mr Egford did or did not do. It is denied that there was any freestanding duty of care, the third basis of claim being denied. It is denied that there was any warranty because it is said that there was no consideration therefor and there was no transferred consideration. It is said that the Certificate for Flat 17 by Mr and Mrs Peace had not been issued when they purchased and that there was no assignment to them of it or its benefits. The damages are denied. Contributory negligence is pleaded against all Claimants for failing to instruct surveyors to undertake an independent inspection or to make enquiries of S&P to ascertain the extent of its involvement and therefore the matters in relation to which it was in a position to certify. In the Amended Reply, the limitation defence is denied because it is said that the causes of action had not accrued on the date when they purchased their flats; there is reference to the fact that Ms Ransome’s Certificate being dated 23 April 2004 confirms on its face that S&P would remain liable for a period of six years from that date. It is then said that any claim by Ms Wyatt and Ms Ransome was brought within three years of them obtaining the knowledge required to bring the action and therefore within the time limits set down in Section 14 A of the Limitation 1980.

There were two sets of amendment applications, one on the second day of the trial and the second two weeks after final speeches. The earlier application involved the Claimants seeking to re-amend the Particulars of Claim to add or supplement the claim against S&P by reference to the warranty claim and add a claim for an additional duty of care which required S&P to exercise care independently of the Certificate. I allowed the amendments notwithstanding extensive objection from S&P. Paragraph 26A provided in effect particulars of the warranty claim which was already expressly pleaded in Paragraph 26 (“The matters stated in the Certificates amounted to warranties…”); there could be no prejudice in clarification being given in the new Paragraph 26A as to how it was supported by consideration. Paragraph 26 added the “new” duty of care. I formed the view that there was no prejudice in this as the same evidence would be deployed to promote or challenge this as for the negligent misstatement claim which was already pleaded.

There were three very late applications made after the final speeches. The Claimants applied to adduce written evidence from five other flat owners above and below several of the Claimants whose consent would be required to enable the works to put right the acoustic and flexing floors problems. They also applied for permission to re-re-amend the Particulars of Claim to add, in the prayer claims, for an indemnity in respect of "any further sums which might reasonably be sought from the Claimants by other residents as a condition to remedial work being carried out" and an injunction against Optima for it to "take such steps as are reasonably necessary to enable any works identified in the course of this case to be carried out within a reasonable period of time from judgment. Optima applied to adduce a letter from and calculations carried out by their engineering expert and a test report which purports to evidence the sound insulation gains that might be expected from using a particular acoustic solution. These applications were made not even at the 11th hour but very close to the witching hour.

As to the Claimants’ applications first. I had raised with Counsel during the trial a concern about the absence of any evidence of other flat owners’ consent to work being carried out in their flats to enable effective remedial solutions to be carried out both in the Claimants’ flats and in theirs to resolve the acoustic and flexing problems. I encouraged the parties to reach some provisional accommodation in the event of liability being found against Optima but the parties were unable to agree anything. On 25 February 2013, individual Claimants wrote to their neighbours above and below (but only long leasehold owners) seeking consent to enable the "bounce and sound transference" remedial works to be carried out. In these letters it was said that the works would take around eight weeks, it being said that the Claimants would be paying for the works in their flats. Three of these five flat owners replied by 7 March 2013 when the Claimants’ solicitors wrote to the other parties and to the Court attaching these letters of consent. Over the following few days the final two flat owners’ consents were sent on. It is clear that all of them, unsurprisingly seek to be compensated as a condition of the consent in effect to associated costs and losses (such as loss of rent, costs of alternative accommodation and furniture storage and the like). The most extreme requirement is from Mr Scott in Flat 7 which is below Mr Hunt’s penthouse flat who has sought seven guarantees including six months loss of rent (at £1,100 per month and £250 per week for disruption).

The authorities on late amendments, such as Worldwide Corporation v GPT Ltd [1998] EWCA Civ 189 and Swain Mason v Mills & Reeve [2011] 1 WLR 2735 reveal a much tougher and less tolerant approach to them with a heavy onus on the applicant making a late or very late amendment application to justify it and put forward a fully and properly pleaded amendment. The same approach in broad terms is applicable with regard to the introduction of evidence after the final speeches or indeed at any very late stage.

The Claimants and their legal and expert teams obviously knew, because it was pleaded and supported by expert evidence, that to succeed on their first alternative quantum approach in relation to the flexing and acoustic problems, extensive access would be required to other flats to enable work to be done both on ceilings and floors. Thus, Mr Hunt’s floor would need to be opened up both from his side and from that of Mr Scott. There seems to be no good explanation as to why either the current amendment sought or the new "consent" evidence could not have been deployed weeks if not months ago. It is argued, optimistically, by Counsel for the Claimants that they do not need to adduce evidence to demonstrate that adjoining owners will consent because, it is suggested that the Claimants are entitled to reinstatement unless it would be unreasonable to reinstate and, if reinstatement involves quantum being based on a reinstatement method which involves going into other peoples’ flats, so be it because once the Claimants have damages they can do with the money whatever they like (including by implication not doing the reinstatement on which the quantum has been assessed by the court). That seems to me to be a bad point because it puts the cart before the horse in that the Court must decide the reasonableness of the reinstatement solution and amongst other things whether there is any realistic chance that the proposed reinstatement will actually be done.

It was, in my judgment, much too late for these applications to be made by the Claimants and Optima. There has already been a seven-day trial which is a proportionate length of time for a case such as this. If this evidence was allowed in and the amendment allowed, Optima should be entitled to require all or any of the five flat owners to be called or at least adduce expert evidence to seek to undermine the assertions made; there would have to be a recall of expert witnesses. For instance, Optima might wish to produce evidence about Mr Scott’s flat to show that it is now so configured that the work within his flat could be carried out in very much less than the eight weeks let alone six months which Mr Scott talks about. The experts might have to adduce detailed further calculations. All Counsel properly accepted that it would not be acceptable for there to be a further trial hearing day or days to enable the issue of consents and the possible financial consequences to be addressed by witnesses, including some of the other flat owners; the same goes for the expert matters. One might need to examine whether the consents were fully informed ones; expert evidence could be deployed to address specific problems in specific flats. There would therefore be serious prejudice to the Defendants and to the whole trial process in circumstances in which it is and always was incumbent upon the Claimants to plead and adduce evidence of material facts supporting the reasonableness of the reinstatement work upon which their primary quantum case is based. There is no good reason why Optima’s expert could not have produced his late calculations and report in any event.

I should add also that the form of the Claimants’ amendment was inadequate in that it did not plead any of these consents as material facts supporting the reasonableness of the primary reinstatement solution pursued by the Claimants. In reality all that the proposed amendment did was to claim indemnity relief in the prayer.

Clause 3.1 states:

“The Vendor shall cause the Premises to be completed in a good and workmanlike manner and with suitable materials pursuant to any Planning Permissions granted in respect of the Building so that the Premises shall be fit for occupation on completion and the Building will comply with all Planning Permissions and Building Regulations as soon as may be reasonably practicable…”

The meaning of this clause does not in itself give rise to any great difficulties of construction save in relation to limitation, namely as to when any material cause of action for breach arises. It is accepted by Counsel for Optima, correctly in my view, that the Purchasers in question have a cause of action not only if their particular flat was not constructed properly but also if the Building as a whole did not comply with Building Regulations; the wording itself suggests that. Thus, it is in principle accepted that those Claimants who have the benefit of this Clause have a cause of action in relation to, say, the roof or the drains, albeit that there are issues as to how any damages may be awarded.

The main issue is as to when any cause of action for breach of this clause finally crystallises. Of course, the cause of action (if any) is for breach of contract and that accrues at the date of the breach. However, Optima argues that the cause of action crystallises no later than the date when sufficient works have been completed to enable the Vendor to enter and occupy the Premises, namely the flat in question whilst the Claimants (Ms Ransome and Ms Wyatt) argue that it finally accrued when the Building as a whole as opposed to the individual flat is completed.

There is some authority which is of general relevance on this topic, principally Tameside Metropolitan Borough Council v Barlow Securities Group Services Ltd (1999) 75 ConLR 112, [2001] EWCA Civ 1. This related to a JCT standard form of building contract under which the contractor’s obligation was to "carry out and complete the Works…in compliance [with the Contract Documents] using materials and workmanship of the quality and standards therein specified...” The claims relating to defects and limitation issues were raised such that it was important to determine the date from which time ran in respect of the employer’s causes of action. The JCT contract provided for practical completion but what had actually happened was that there had been 32 certificates of practical completion as more and more of the Works (which involved housing) were handed over. The issue broadly was therefore whether time ran from the last certificate of practical completion; there was argument as to whether there could be two courses of action, namely a failure to carry out the Works properly and the failure to complete the Works properly. At first instance His Honour Judge Gilliland QC, the former much respected TCC judge in Manchester, recognised at page 150 that the issue was simply whether there were separate causes of action for limitation purposes. He quoted with approval the dictum of May LJ in Steamship Mutual Underwriting Association Ltd v Trollope & Colls Ltd (1986) 6 Con LR 11, 34 when he said:

“In the Limitation Act context, one asks in quite broad terms whether the relevant factual situation (a reference to the dictum from Diplock LJ’s judgment in Letang- and wide enough term itself) first was suable upon…”

However, he went on to say at page 153 that:

“In considering when a cause of action arises for limitation purposes, it is in my judgment necessary to approach with care the question posed by May LJ namely when did the relevant factual situation first become suable upon and the language used by May LJ in that case should not, it seems to me, be treated as if it was a statutory provision defining when a cause of action was deemed to arise for limitation purposes.”

He then went on to consider obligations in leases to repair and to deliver up premises in good repair at the end of the term, saying that they gave rise to distinct and separate obligations.

The judge went on in the case with which he was concerned to find that a "distinct and separate cause of action will arise on the failure to complete the houses properly" (page 154). He said that pages 154-5:

“The question in the present case however is not as in Conquer v Boot and in the Steamship case where the alleged additional defects give rise to a separate cause of action but whether the same defects can constitute a breach of two different contractual provisions and if so whether a separate cause of action will arise on the breach of the later obligation. In my judgment authorities such as Proudfoot v Hart (1890) 25 QBD 42… on repairing covenants in leases show that the same disrepair can be a breach of both the covenant to keep the premises in repair and also at the end of the term of the covenant to deliver up premises in repair. The position in relation to dual obligations to carry out the Works in accordance with the contract documents and complete the Works in accordance with the contract…is not in my judgement different in principle. There is no reason in law why the parties cannot enter into an agreement whereby the same acts or omissions may not give rise to breaches at different points in time of two distinct obligations and if they do so, then in principle there will be two different causes of action for the purposes of the 1980 Act."

He found that on the contract in question and the facts of the case that the parties had treated as practically complete those houses which had been completed and handed over earlier than the last certificate of practical completion and therefore that time ran in relation to those houses from the practical completion dates set out in the earlier certificates. The Court of Appeal agreed without much further reasoning.

The conclusions of principle which I can draw from the Tameside case are as follows:

In the current case, one needs to analyse Clause 3.1:

The next area of issue between the parties relates to the scope of the "repairing" covenant. There are numerous cases in the law relating to landlord and tenant. In Ravenseft Properties Ltd v Davstone (Holdings) Ltd [1980] 1 QB 12, Forbes J addressed the scope of a tenant’s repair obligation in the context of cracking and bowing of stone cladding due to the absence of expansion joints in a let building, this being said to be an inherent defect in the building when let. Forbes J said at Page 21B-C:

“The true test is, as the cases show, that it is always a question of degree whether that which the tenant is being asked to do can properly be described as repair, or whether on the contrary it would involve giving back to the landlord a wholly different thing from that which he demised."

Many of the cases are concerned with breaches of the tenant’s obligations to repair.

In Quick v Taff Ely Borough Council [1986] 1 QB 809, the Court of Appeal was concerned with a landlord’s statutory obligation to keep in repair "the structure and exterior" of a house which was let in circumstances where there was said to be serious internal condensation. Dillon LJ said:

“21.

In my judgment, the key factor in the present case is that disrepair is related to the physical condition of whatever has to be repaired and not to questions of lack of amenity or inefficiency. I find helpful the observations of Atkin LJ in Anstruther-Gough-Calthorpe v McOscar [1924] 1 KB 716 at 734 that repair 'connotes the idea of making good damage so as to leave the subject so far as possible as though it had not been damaged'. Where decorative repair is in question one must look for damage to the decorations, but where, as here, the obligation is merely to keep the structure and exterior of the house in repair, the covenant will come into operation only where there has been damage to the structure and exterior which requires to be made good.

22.

If there is such damage caused by an unsuspected inherent defect, then it may be necessary to cure the defect, and thus to some extent improve without wholly renewing the property as the only practicable way of making good the damage to the subject-matter of the repairing covenant. That, as I read the case, was the basis of the decision in Ravenseft…

In the present case the liability of the council was to keep the structure and exterior of the house in repair - not the decorations. Though there is ample evidence of damage to the decorations and to bedding, clothing and other fabrics, evidence of damage to the subject-matter of the covenant, the structure and exterior of the house, is far to seek. Though the condensation comes about from the effect of the warm atmosphere in the rooms on the cold surfaces of the walls and windows, there is no evidence at all of physical damage to the walls - as opposed to the decorations - or the windows.”

One can take from these cases that it is first necessary to construe and interpret the "repairing" covenant in question and, as for all contract documents, construe them in the appropriate context. Part of that context here was that the Landlord was in practice and effect the developer of the Building overall and the Premises in particular. The obligation on Optima under the Lease is materially to “maintain", "repair", "renew" and "amend" the main structure of the Building including roofs and walls, drains gutters and sewers. These words are not simply synonyms for each other although they may well overlap in relation to any individual item of work that needs to be done. Thus, maintaining a gutter may involve clearing leaves out of it and checking that the brackets are still supporting the gutter; if the support has corroded, a new support will have to be provided and that work overall may all be said to be maintenance, repair and renewal. However, an inadequate roof may be or become incapable of maintenance as such or even repair; it may need to be wholly replaced and, as necessary, a different type of roof provided; there will then be renewal by amendment. The scope and breadth of this repairing obligation is comprehensible in terms of the Landlord having the responsibility for the Building overall.

There was a real commercial and practical advantage for both Landlord and Tenant for there being a relatively broad "repairing" covenant. It enabled and indeed obliged the Landlord to make good any design, workmanship or material deficiency within the Building as a whole, for which it was responsible to, at least, a number of long leasehold tenants to whom the Landlord had promised a certain standard of finished product.

In my judgment, the "repairing covenant" was a wide obligation imposed on Optima which obliged it to repair, renew or even vary those parts of the Building covered by Clause 4.6.1 of the Leases into which it had entered with, amongst others, the Claimants in these proceedings.

The Certificates issued by Mr Egford to or for the benefit of the purchasers were all in the same form, headed "Professional Consultant’s Certificate" and gave the "Full address of property", such as Apartment 17, Jubilee Mansions, 119 Thorpe Road, Peterborough. It went on to say:

“1.

I have visited the site at appropriate periods from the commencement of construction to the current stage to check generally:

(a)

progress, and

(b)

conformity with drawings approved under the building regulations, and

(c)

conformity with drawings/instructions properly issued under the building contract

2.

At the time of my last inspections [on 10 December 2003], the property has reached the state of completion.

3.

So far as could be determined by each periodic visit inspection, the property has been generally constructed:

(a)

to a satisfactory standard, and

(b)

in general compliance with the drawings approved under the building regulations.

4.

I was originally retained by OPTIMA (Cambridge) Ltd who is the developer in this case.

5.

I am aware of this certificate is being relied upon by the first purchaser [e.g. Diana Marjorie Wyatt] of the property.

6.

I confirm that Strutt & Parker will remain liable for a period of 6 years from the date of this certificate. Such liability shall be to the first purchasers and their lenders and upon each sale of the property and the remaining period shall be transferred to the subsequent purchasers and their lenders.

7.

I confirm that I have appropriate experience in the design and/or monitoring of the construction or conversion of residential buildings….

8.

The box below shows the minimum amount of professional indemnity insurance the consultant will keep in force to cover liabilities under this certificate.

£5,000,000”

Between Paragraphs 7 and 8 there was listed the "Name of Professional Consultant", his qualifications, address, telephone and fax numbers and the name of S&P’s professional indemnity insurer.

In the case of Ms Wyatt, Mr Hunt, Mr Bedwell, Mr and Mrs Sahi, Paragraph 6 of the Certificate referred to them specifically by name, whereas, in respect of Ms Ransome and Mr and Mrs Peace, Optima’s name appears as the first purchaser and not theirs. Mr Egford’s "last inspection" as referred to on the certificate was 2 December 2003 for Ms Wyatt, 10 December 2003 for the flats of Ms Ransome, Mr and Mrs Sahi and Mr and Mrs Peace but there was no reference to any date for Mr Hunt and Mr Bedwell. In the case of all the purchasers, except Ms Ransome and Mr and Mrs Peace, Paragraph 5 went on to say that the author was aware that the certificate was also being relied upon by various lending institutions "when making a mortgage advance to” the purchaser in question.

A preliminary point arises in relation to the liability of S&P LLP the Fourth Defendant and Mr Egford in person. I am satisfied that the Fourth Defendant as a legal entity was never materially involved in any of the events to which these proceedings relate, at least insofar as that they can give rise to any cause of action against it. At most it could be responsible for the issue of the Certificate to or for the benefit of Flat 17 (see below) probably issued in or about November 2008. Furthermore there is no evidence that Mr Egford’s issue at that date was done on behalf of the Fourth Defendant and no evidence that the Fourth Defendant in some way had taken over responsibility for S&P. I am also satisfied that Mr Egford acted as all times as an employee of S&P and, applying the principles and approach laid down in Williams v Natural Live Foods Ltd [1998] 1 WLR 830, he always acted and appeared to act as an employee of and for and on behalf of S&P and, as I find, he never “conveyed directly or indirectly" to either Optima or to any of the purchasers that he was assuming "personal responsibility towards" them. For instance, the Certificates are on S&P headed paper and his name is given as being of S&P’s Salisbury address; no one reading those Certificates would think or believe that Mr Egford was issuing those certificates on a purely personal basis. It follows that he is not personally liable.

The question arises in relation to each Claimant as to what cause of action exists. There are three possibilities, negligent misstatement, breach of warranty and simple negligence. There is no doubt and in any event I find on the evidence that the certificates were issued by Mr Egford on behalf of Strutt and Parker knowing or believing that they would be relied upon by the first purchasers and that they could be relied upon by subsequent purchasers. Not only do the certificates themselves make it clear that Mr Egford was aware that the certificate was being relied upon by the first purchaser, he knew from the terms of his engagement that this was likely to be so and he was also involved in liaising directly with, principally, Optima’s solicitors about the issue of certificates to or for the benefit of individual purchasers.

There can be no doubt that in a case such as the present an actionable duty of care was owed by S&P through Mr Egford to the Claimants in this case. That duty is founded in the line of authority initiated by the House of Lords in Hedley Byrne & Co Ltd v Heller & Co Ltd [1964] AC 465 and gives rise to what some call a cause of action for negligent misstatement. Relevant parts of the judgments are:

“…So it seems to me that there is good sense behind our present law that
in general an innocent but negligent misrepresentation gives no cause of
action. There must be something more than the mere misstatement. I
therefore turn to the authorities to see what more is required. The most
natural requirement would be that expressly or by implication from the
circumstances the speaker or writer has undertaken some responsibility,
and that appears to me not to conflict with any authority which is binding
on this House…[Page 483]

This passage makes it clear that Lord Haldane did not think that a
duty to take care must be limited to cases of fiduciary relationship in the
narrow sense of relationships which had been recognised by the Court of
Chancery as being of a fiduciary character. He speaks of other special
relationships, and I can see no logical stopping place short of all those
relationships where it is plain that the party seeking information or advice was trusting the other to exercise such a degree of care as the circumstances required, where it was reasonable for him to do that, and where the other gave the information or advice when he knew or ought to have known that the enquirer was relying on him. I say " ought to have known " because in questions of negligence we now apply the objective standard of what the reasonable man would have done.

A reasonable man, knowing that he was being trusted or that his skill
and judgment were being relied on, would, I think, have three courses open to him. He could keep silent or decline to give the information or advice sought: or he could give an answer with a clear qualification that he accepted no responsibility for it or that it was given without that reflection or enquiry which a careful answer would require: or he could simply answer without any such qualification. If he chooses to adopt the last course he must, I think, be held to have accepted some responsibility for his answer being given carefully, or to have accepted a relationship with the enquirer which requires him to exercise such care as the circumstances require. [Page 486] [per Lord Reid]

My Lords, it seems to me that if A assumes a responsibility to B to
tender him deliberate advice there could be a liability if the advice is
negligently given. I say " could be " because the ordinary courtesies and
exchanges of life would become impossible if it were sought to attach
legal obligation to every kindly and friendly act. But the principle of the
matter would not appear to be in doubt. If A employs B (who might
for example be a professional man such as an accountant or a solicitor
or a doctor) for reward to give advice and if the advice is negligently given there could be a liability in B to pay damages. The fact that the advice is given in words would not, in my view, prevent liability from arising. Quite apart, however, from employment or contract there may be circumstances in which a duty to exercise care will arise if a service is voluntarily undertaken. [Page 494]

Leaving aside cases where there is some contractual or fiduciary relation-ship, there may be many situations in which one person voluntarily or gratuitously undertakes to do something for another person and becomes under a duty to exercise reasonable care. I have given illustrations. But apart from cases where there is some direct dealing there may be cases where one person issues a document which should be the result of an exercise of the skill and judgment required by him in his calling and where he knows and intends that its accuracy will be relied upon by another.[page 497]

My Lords, I consider that it follows and that it should now be regarded
as settled that if someone possessed of a special skill undertakes, quite
irrespective of contract, to apply that skill for the assistance of another
person who relies upon such skill, a duty of care will arise. The fact that
the service is to be given by means of or by the instrumentality of words
can make no difference. Furthermore, if in a sphere in which a person
is so placed that others could reasonably rely upon his judgment or his
skill or upon his ability to make careful inquiry, a person takes it upon
himself to give information or advice to, or allows his information or advice to be passed on to, another person who, as he knows or should know, will place reliance upon it, then a duty of care will arise. [Pages 502-3] [per Lord Morris]

I think, therefore, that there is ample authority to justify your Lordships
in saying now that the categories of special relationships which may give rise to a duty to take care in word as well as in deed are not limited to contractual relationships or to relationships of fiduciary duty, but include also relationships which in the words of Lord Shaw in Nocton v. Ashburton at page 972 are " equivalent to contract" that is, where there is an assumption of responsibility in circumstances in which, but for the absence of consideration, there would be a contract. Where there is an express undertaking, an express warranty as distinct from mere representation, there can be little difficulty. The difficulty arises in discerning those cases in which the undertaking is to be implied. In this respect the absence of consideration is not irrelevant. Payment for information or advice is very good evidence that it is being relied upon and that the informer or adviser knows that it is. Where there is no consideration, it will be necessary to exercise greater care in distinguishing between social and professional relationships and
between those which are of a contractual character and those which are not.
It may often be material to consider whether the adviser is acting purely
out of good nature or whether he is getting his reward in some indirect form. The service that a bank performs in giving a reference is not done simply out of a desire to assist commerce. It would discourage the customers of the bank if their deals fell through because the bank had refused to testify to their credit when it was good. [Pages 528-9] [per Lord Devlin]

In those cases there was no dichotomy between negligence in act and in word, nor between physical and economic loss. The basis underlying them is that if persons holding themselves out in a calling or situation or profession take on a task within that calling or situation or profession they have a duty of skill and care. In terms of proximity one might say that they are in particularly close proximity to those who as they know are relying on their skill and care although the proximity is not contractual. [Page 538] [per Lord Pearce]

The law has developed over the following 60 years but invariably on the basis that Hedley Byrne was properly and, as importantly, sensibly decided. So there is talk about special relationships and assumption of responsibility in later cases such as Henderson v Merrett Syndicates Ltd [1995] AC 145, Barclays Bank Plc v Fairclough Building Ltd (19950 76 BLR 1, Smith v Bush [1990] 1 AC 831 and Williams v Natural Life Health Foods Ltd [1998] 1 WLR 830. They talk about special relationships and assumption of responsibility as key or important elements of tortious relationships where "economic loss" is suffered and claimed. What can be drawn from these and indeed other cases, in the context of the current case is the following:

In my judgment, the duty of care owed by S&P to the Claimants stemmed from what might properly be called a special relationship and one which is at least akin to contract. Although S&P was engaged contractually by Optima, it was engaged primarily if not solely to do what was reasonably necessary to put itself in a position in which it could issue Architect’s certificates to or for the benefit of first or subsequent purchasers and for them and their lenders to rely upon them. Leaving aside any issue as to whether the Architect’s Certificates can be considered to be contractual warranties, they are written in a way which is akin to a contract, particularly Paragraph 6 which confirms that S&P will remain liable for a six-year period. In my judgment also, the duty of care extends not only to the making of the statement but also to the performance of the services which were necessary to enable S&P through Mr Egford to issue such Certificates. It therefore follows, in effect in this case, that there can be considered to be two duties of care or one with two aspects to it, involving the duty to exercise reasonable care first in the performance of the services leading up to the issue of the Certificate and secondly in the issuing of the Certificate itself.

It is then necessary to consider whether or not each Certificate can be considered as a contractually enforceable warranty. Before turning to the question of whether there is any legally effective consideration for the warranty, I would have no doubt that, if it was headed "Warranty", the remainder of the wording could be interpreted verbally as a warranty of its contents. It is purporting to certify that appropriate inspections have been carried out and that, based on inspections, the particular property has been constructed properly, that the relationship can give rise to liability on the part of S&P, that such liability would extend for six years from the date of the certificate and that liability would extend to second or later purchasers of property. There is a clear representation that Mr Egford has appropriate experience as an architect. The words used suggest that there was contractual intention which goes beyond the creation of a simple tortious relationship. In particular Paragraph 6 talks about S&P remaining liable for 6 years from the date of the certificate; if the relationship was to be simply in tort by way of a duty of care, limitation would broadly permit the extension of liability for six years from the date when damage arising from breach of duty first occurred and the date of the certificate as such would be immaterial. On its face the Certificate amounts to a warranty. It is not however a guarantee as such that the property has been built perfectly; it is explicit that it is a warranty based on inspection by an architect that the property is satisfactory, it being necessarily implicit that the inspections and certifying are done with reasonable care.

Counsel for the Second to Fourth Defendants argues that there was no contractual intention or "animus contrahendi” and she relies on Independent Broadcasting Authority v EMI Electronics Ltd and BICC Construction Ltd (1980) 14 BLR 1. This case amongst other things involved a view as to whether a letter in which BICC wrote to the plaintiff saying that it was "well satisfied that the structures will not oscillate dangerously" amounted to a contractual warranty. Viscount Dilhorne said at Page 23:

“Although in this case the alleged warranty was not given at the time of the making of the main contract and so was not collateral to that contract, it still is essential to justify the conclusion that a legally binding contract has been made, to show clearly that each party had an animus contrahendi…”

She argues that there was no such mutual animus, because S&P’s retainer was entered into several years before any purchaser purchased and because no purchasers dealt directly with S&P. I do not consider that either of these two points taken on their own or even together are good ones. The contractual warranty between S&P and any purchaser would not arise at the time of the original retainer but at the time, at the earliest, when S&P proffered the Certificate in question. It would not be necessary for there to be direct contact between S&P and any individual purchaser because the arrangement clearly was in fact that the Certificates would be channelled through Optima’s and the individual purchaser’s solicitors. The intention to contract at least on the S&P side can be determined by reference to the wording of the Certificate itself. The intention on the purchaser’s side can be determined by its request for and receipt by the particular purchaser.

The primary issue in relation to the warranty is whether or not it is legally enforceable by any of the Claimants. The warranty can only be enforceable if it is supported by consideration. There was no negotiation between the Claimants and S&P and the Claimants paid nothing specifically to S&P for the benefit of having the Certificates. S&P was contractually engaged by Optima amongst other things to provide the Certificates to and for the benefit of the eventual purchasers of flats.

Whilst the need for consideration is a fundamental part of the law of contract in England and Wales, it is clear that courts over the years have adopted a relatively flexible approach as to what might amount to consideration. For instance a peppercorn is enough as the Court does not enquire as to whether the consideration represents good value. Courts have recognised that consideration does not have to, so to speak, reach the promisor. In Re Wyvern Developments Ltd[1974] 1 WLR 1097, Templeman J (as he then was) addressed a case in which the Official Receiver acted as liquidator for a company, W, in liquidation had agreed to a sale of land effectively owned by it by another company, G, which had G an unpaid vendor’s lien for £20,598 over the land. G had an offer of £16,000 from building contractors (Winter) for the land and asked the Official Receiver to join in the conveyance of the land to Winter; the Official Receiver, having received confirmation that £16,000 was a fair figure, authorised participation in a contract of sale which confirmed that W would convey its interest in the land. An issue arose, amongst others, as to whether there was any binding contract between the Official Receiver and G. The judge said:

“…By the letters dated… and…and by the approval of the terms of the contract and the conveyance, the Official Receiver made a clear and express promise to [G] that [W] would execute the conveyance. [G] could not have been advised to enter into that contract without such a promise. The promise was conveyed to Winter and when they agreed to buy, and paid their deposit, no doubt they arrange their affairs on the assumption that the Official Receiver would fulfil its promise. The Official Receiver is anxious to perform his promise. The promise was given and accepted in good faith and it was a promise that Official Receiver was entitled to make, provided that I am satisfied, as I am, that the sale was bona fide and at a price which did not appear to be at undervalued. Breach of that promise will involve [G] in expense, delay and possibly damages. Breach of that promise will involve Winter in delay, expense and possibly litigation and damages. How can it be right for the court to direct the Official Receiver to break his promises in these circumstances? Mr Muir Hunter submitted that the Official Receiver is not contractually bound and cannot be allowed to fulfil his promise, unless he can be made liable in damages for breach. The argument was that the Official Receiver is not contractually bound because he received no consideration for his promise to concur in the conveyance. This stems from the fact that the sale is for £16,000 and the lien is for £20,000, and it follows that there is going to be no surplus available to [W]. In brief [W] will not receive a penny. [Pages 1102E -1103A]

…In my judgment, there was in fact a tripartite contract formed by the correspondence and by the contract which was executed by [G] and Winter. The contract which [G] entered into pursuant to the authority granted by [W] is just as much binding on [W] as it is on [G]. On well-established principles it is not necessary for [W] to receive any part of the purchase price or any other consideration, provided that consideration moves from the promisees, [G] and Winter.

In the alternative…there was consideration by the Official Receiver for agreeing to execute the conveyance on behalf of [W]….In my judgment, the implied promise of [G] not to apply to the courts to enforce Italy in was consideration for the promise of the Official Receiver to execute the conveyance, thus making an application to the court unnecessary…

…Accordingly, in my judgment, the consideration for the promise of the Official Receiver was the promise by [G] as instead of enforcing their lien by application to the court they would contract to sell their legal estate plus their right of lien; and in consideration of[G’s] promise, the Official Receiver agreed to concur by conveying the equitable interest of [W], bus completing the title of Winter…” [Pages 1103C-1104B]

The facts of the current case are of course completely different. However, this case, amongst others, establishes and confirms that "while consideration must move from the promisee, it need not move to the promisor” (Chitty on Contracts 30^th Ed at Paragraph 3-039”) and that it follows "that the requirement of consideration may be satisfied where the promisee suffers some detriment at the promisor’s request, but confers no corresponding benefit on the promisor” (ibid). Here, in effect, the purchasers in paying for their flats knew that they were entitled to receive the Certificates when they did so and therefore the receipt of the Certificates was paid for by the purchasers in circumstances in which S&P must have known that it was to provide the Certificates to or for the benefit of the purchasers at or after the time of purchase. There was consideration therefore that moved not to S&P but to Optima, as everyone knew that it would. This was, in my judgment, valid consideration

The main point taken on consideration by Counsel for the Second to Fourth Defendants is that the consideration was past consideration in that the flat sale agreements save for Mr and Mrs Sahi, preceded the handing over of the Certificates. I will address this issue in relation to the individual purchasers. However, in my judgment, this is as a matter of generality not a good point because there was a mutual expectation at the time of the sale both on the part of at least most of the purchasers and S&P that the certificates would be issued. There was at the time of sale an enforceable right on the part of the purchasers to secure the actual signed Certificates.

I therefore conclude that there were enforceable warranties from S&P to the First to Sixth Claimants. There were no such warranties as between S&P and Mr and Mrs Peace because there was no consideration for them.

I now turn to consider the extent to which the Claimants relied upon the Certificates such as to create a cause of action for negligent misstatement, assuming that there were breaches and there was damage, physical or economic. In relation to the First to Sixth Claimants, their evidence, which I accept, is that they did rely on the Certificates or at the very least on the fact that the certificates would be coming sooner or later. That is borne out by the fact that in relation to Ms Wyatt, Mr and Mrs Sahi, Mr Hunt and Mr Bedwell the Certificates specifically identify their lenders by name and that in relation to the other two Claimants (without a name) that lenders are referred to; to enable them to purchase or at least to facilitate the purchase, they were all borrowing and they and their lenders had to rely on the Certificate to secure the requisite loans. The Certificates on their face accept that they are being relied upon. The main point relied upon by Counsel for S&P is that the witness statements in relation to reliance at least seem to have been drafted largely by solicitors; that is not a good point when I have found the witnesses to be truthful and the witnesses signed a Statement of Truth and gave evidence on oath. They were all intelligent witnesses who could understand what their solicitors had drafted for them to sign.

The fact that the First, Second, Fifth and Sixth Claimants only received their certificates after sale and completion is immaterial in the circumstances. They were all told prior to completion that they would be receiving an Architect’s Certificate. Mr Egford provided draft certificates to Optima’s solicitors knowing, as turned out to be the case, that those solicitors would pass them on to purchasers in general and to specific purchasers in draft. The primary purposes of Mr Egford’s involvement was to inspect and then to issue certificates in relation to each flat; he obviously must be taken to have known that they could and were intended to be relied upon by purchasers. Apart from Mr and Mrs Sahi who did obtain their Certificate before they purchased, the signed Certificates were all eventually provided. They knew or believed that they were entitled to receive and would be receiving the Certificates sooner or later and they had the assurance therefore that the flats which they were purchasing and the Building (insofar as it impacted on the individual flats) had been properly inspected by an experienced and qualified architect and that his careful inspections revealed that the property had been constructed satisfactorily. That is more than enough to establish reliance in a case such as this.

The fact that Mr Egford could, theoretically have withheld certificates or possibly have issued qualified certificates if he had not been satisfied with the quality and completeness of the work is, in the result, immaterial because he in fact issued certificates for the six flats which are the subject matter of these proceedings. The fact that a number of the Claimants said that they understood that the Certificate was to act as a guarantee does not in any way undermine the fact that they were relying not only on the Certificate and that it was to be issued by a qualified architect but also on the fact that a qualified architect had inspected the work. In a sense (albeit not in a purist legal one), the Certificates did provide what ordinary people might call a guarantee which is an assurance that inspections had been done by a qualified architect and that everything was all right.

So far as Mr and Mrs Peace are concerned, they purchased from the first purchaser of Flat 17. Their solicitors made enquiries of the vendor’s solicitors on 12 December 2005 as to whether there were any "guarantees or insurance policies of the following types: NHBC, Foundation 15 or Newbuild" and the vendors responded: "Yes". They understood and believed that Flat 17 would have the benefit of a guarantee if there were any problems with the property and they proceeded with the purchase of the property relying on that assurance. Mr Peace accepted in evidence that when he and his wife purchased Flat 17 they did not know that the Architect’s Certificate existed in the form that it did. Between 31 October and 1 December 2008, they contacted their conveyancing solicitors to obtain the signed Architect’s Certificate relating to Flat 17 which they were surprised to find had not been provided to them upon completion. Their solicitors had sent a copy in December 2008 but it is at least possible that it was not received by Mr and Mrs Peace who wrote to their solicitors again on 13 October 2009 asking "why the sale was allowed to reach completion without the certificates in the first place". The solicitors wrote back on 14 October 2009 saying:

“I confirm that the original Certificate was issued when the property was newly built.

Strutt & Parker produced an official copy of the Certificate which was forwarded to you last December. Our letter forwarded to you earlier today via recorded delivery contained a copy…”

I have no reason to doubt that this is true. The Certificate for Flat 17 dated 23 April 2004 was issued to Optima as the "first purchaser". However, Mr Egford’s letter to Optima of 13 November 2006 "(and also an internal file note of that date) indicates that he had not by then issued the certificate for Flat 17 but said that he could issue it with Optima on as "the first purchaser and then you can pass these on when or if you sell them." I therefore infer that what happened was that S&P issued the Certificate for Flat 17 no earlier than about November 2008, when it provided the Certificate directly or indirectly to Mr and Mrs Peace’s solicitors. Although Mr and Mrs Peace were not told prior to their purchase in terms that a "Certificate" had been issued in respect of Flat 17 or that an architect or S&P had issued it, and they did not actually physically receive a copy prior to purchase, they knew that there was the equivalent. However, I can not see that there was any consideration such as to create a contractually enforceable warranty. There was however a tortious duty owed by S&P to Mr and Mrs Peace created and confirmed by the issue of the Certificate, albeit in late 2008, which was effectively addressed to them as subsequent purchasers. I am satisfied that there was sufficient reliance through the facts set out above.

In conclusion, a duty of care was owed by S&P to each of the Claimants both in relation to the issuing of the Certificates as well as the execution of the inspection services referred to on the Certificates. The Certificates also are in law enforceable contractual warranties in relation to the first six Claimants but not to the Seventh and Eighth Claimants. One needs to bear in mind that none of the Claimants were made aware of the contractual terms as between Optima and S&P and the Certificates are not limited by any number of inspections because all that the Certificates said was that appropriate inspections were carried out. The scope is simply what the Certificates said.

So far as limitation is concerned, or indeed when any cause of action arises, the warranties run for six years from the date of their issue. Therefore, for all the Claimants except Ms Wyatt the proceedings were issued within six years of the date of issue of the Certificates. Her claim in respect of breach of warranty is barred by limitation because her Certificate was issued on 22 January 2004, some six years and two months before the proceedings were issued. All the claims based on negligent misstatement run from the date of the purchase of the property in question or the date of the certificate whichever is the later. This is because, as is correctly accepted by the parties, the damage for the purpose of the tort occurs on the acquisition of the property at the price paid because the purchasers were buying a property which, by reason of the defects, was worth less than they were paying for it. In this context, the loss is the same as a purchaser who buys a property on the basis of a negligent over-valuation. The purchasers have bought properties on the strength of the Certificates which by reason of the negligence in drawing up the certificates are worth significantly less than the prices which they paid for them.

Save for the conservatory (which I will deal with when it is considered later in this judgment), most of the defects were not only present at the time of sale and initial occupation by the Claimants but were causing physical damage as well at that time. Examples are the main roof problems which caused leaks in Mr Hunt’s flat within a day or two of his moving in is internal water leaks associated with poor plumbing. Problems such as the acoustic problems and the springiness of the floor have not caused physical damage but have in reality been there from the start. The cause of action in relation to any careless inspection could arguably run, for limitation purposes, from the date when whatever the damage was occurred. I have formed the view that there is no difference in terms of when the "damage" occurred (and what it was) as between the causes of action for negligent misstatement and for the negligent execution of the inspections because the inspections were carried out with a view to the production of the Certificates which were to be relied upon ultimately by the purchasers. It follows therefore that Ms Wyatt’s claim against S&P fails on the grounds of limitation, subject to Section 14A of the Limitation Act 1980 (for which see later in this judgment). Ms Ransome’s cause of action against S&P however runs from the date of her Certificate, namely 23 April 2004 and is therefore not barred by limitation.

I conclude that all the Claimants’ claims against S&P, except Ms Wyatt’s (subject to Section 14A), are not barred by limitation. The only causes of action are against S&P and not against the Third and Fourth Defendants.

I will deal with each of the defects in the order in which they appear in the Schedule. However first I will set out some factual findings:

The Building Regulations 2000 which came into force on 1 January 2001 by Section 4 required building work to be carried out so that it "complies with the applicable requirements contained in the Schedule 1”. Section 7 requires building work to be carried out:

“(a)

with adequate and proper materials which –

(i)

are appropriate for the circumstances in which they are used,

(ii)

are adequately mixed or prepared, and

(iii)

are applied, used or fixed so as adequately to perform the functions for which they are designed; and

(b)

in a workmanlike manner".

Section 8 emphasises that the primary purpose of most of Schedule 1 is to secure "reasonable standards of health and safety for persons in or about buildings (and any others who may be affected by buildings, or matters connected with buildings)." Section 1 to the Building Regulations identifies elements of the building operations and what has to be achieved in fairly broad terms. For instance A1 requires the building to be constructed so that the loads are sustained and transmitted by it to the ground safely, amongst other things I will refer to the particular parts of Schedule 1 when considering individual defects below.

There was an argument not pressed in closing by Optima’s Counsel that, if the building inspectors or Building Control generally or even specifically approved particular work, there was or could be no breach of the Building Regulations. This was an unsound argument. Whilst approval might render prosecution under the Building Regulations impossible, it can not possibly prevent a party, which has undertaken contractually to another to comply with the Building Regulations, from being in breach of contract if this obligation is not complied with.

In dealing with individual defects, I will identify what the reasonable cost of reinstatement or repair should be. It is accepted, properly, on all sides that reinstatement in this case should form the basis of the award of common law damages or damages in lieu of specific performance. The parties have referred to and relied upon the well-known House of Lords case, Ruxley Electronics Ltd v Forsyth [1996] 1 AC 344. In AXA Insurance UK Plc v Cunningham Lindsey UK [2007] EWHC 3023 (TCC), Paragraph 258 of the judgment states:

“The question of reasonableness of the loss or damage claimed legitimately arises in a number of different ways. As confirmed in Hadley v Baxendale (in the words quoted above) it is necessary that the damages must "fairly and reasonably be considered" as arising from the breach. That reasonableness is itself an essential element in establishing damages was confirmed in the House of Lords case of Ruxley Electronics Ltd v Forsyth [1996] 1 AC 344. The judgments of their Lordships contain many references to the importance of reasonableness in selecting the appropriate measure of damages and determining the extent and measure of damages. For instance Lord Lloyd of Berwick says at page 368A and 370A:

"Once again one finds the court emphasising the central importance of reasonableness in selecting the appropriate measure of damages …

So I cannot accept that reasonableness is confined to the doctrine of mitigation. It has a wider impact …"

Thus, I conclude that it is generally incumbent upon an innocent claimant entitled to damages to demonstrate not only that the loss was within one of the Hadley v Baxendale limbs but also that it is reasonable to recover damages of the type and extent claimed.”

This approach had been preceded in the Court of Appeal case of Southampton Container Terminals v Schiffahrisgeschellsch “Hansa Australia” MGH & Co [2001] EWCA Civ 717 in which Clarke LJ referred to a previously unreported case of his:

There was no issue raised by the Defendants as to whether or not the Claimants intended to carry out any of the future remedial works or as to whether or not the Claimants could secure consent from other flat owners if and when work needed to be done in their flats. On the other hand, the Claimants adduced no evidence about their intention to carry out the future remedial works (being almost all of those claimed for) but almost two weeks after the final speeches they sought unsuccessfully to introduce written evidence from other flat owners giving conditional consents. Of course, it is for the Claimants to prove on the balance of probabilities that the remedial solutions put forward by them is reasonable and otherwise appropriate.

I will identify the appropriate remedial work costs exclusive of the percentage of allowances for preliminaries, contingency and professional fees to which I will return later in the judgment.

It is common ground and in any event I find that the roof was extremely poorly constructed. That was underpinned by expert evidence and confirmed at the site inspection when I went with two of the experts up onto the roof. Phase II which was installed second was undoubtedly worse than Phase I. Phase II comprises rucked, rutted and apparently split membrane, which has been repeatedly repaired. The repairs gave every impression of being a botched job and little more than sticking plasters in effect and appearance. Apart from extensive bad workmanship, the roofs on both faces do not comply with Schedule 1 of the Building Regulations which requires the roof of a building adequately to “resist the passage of moisture to the inside of the building". Optima admits in the pleadings both that it was in breach of Clause 3.1 of the Sale Agreements and also that it was liable to have the roofs repaired under the Leases. Whilst it does not admit that there had been numerous leaks, the defects are so bad on Phase II that leaks must have occurred extensively. There was evidence particularly from Mr Hunt that the roof over Phase I has leaked extensively over the years, albeit that most of the leaks have been in and around the skylights and other penetrations through the membrane. The First Defendant, properly, accepts that that the roof on both phases should be replaced.

So far as S&P is concerned, there is no doubt on the facts that Mr Egford knew that there were problems with both roofs, as recorded in his own inspection notes. As late as 4 December 2003, he was saying that he was concerned about the roof and even forwarded photographs. I accept Mr Brophy’s evidence that a competent inspector in S&P’s position should not have issued his Certificates for any of the flats. Mr Armes accepted that S&P should have insisted that the defects at least on the Phase II roof were rectified before issuing the Certificates. He suggests however that S&P can not be criticised with regard to Phase I unless leaks were identified before he issued his Certificates. However, the extensive and very obvious defects on Phase II as well as a very obvious large patch repair visible by December 2003 on Phase I should have put him on notice that there would or could well be problems on Phase I as well. Where S&P fell down was that Mr Egford did not apparently understand or know what the specification was for the roof, as set out in his own inspection sheet for 2 December 2003 and because he did not himself check that the roofs were fully and adequately repaired. He seems to have thought that it was sufficient simply to assume that the roofs might have been put right. If he was going to issue Certificates, he needed to be in a position to confirm that the roof had been constructed satisfactorily. Indeed his Certificates were unwittingly but simply wrong because his actual inspections had revealed that the roofs were defective. Breach of the duty of care is established.

So far as quantum is concerned, the experts are agreed that there is a total of 635 m² of roof for Phase I and II and that an appropriate rate for the roof covering is £53.54 per square metre, excluding the need to provide for insulation. Although there was a difference between the parties’ experts as to whether the remedial work should be total removal and replacement or re-covering the old, the experts are agreed that the rate is applicable to both. I would otherwise have found that Phase II needed complete replacement and Phase I needed partial replacement for some distance back from the openings in the roof above and otherwise re-covering the existing. It is probable that some insulation will need replacement because it is abundantly clear that there have been numerous leaks through the roofs and that consequently there will have been deterioration in the insulation. Much of the leakage has occurred around the openings. Also on Phase II there is and has been standing water and the extensive patch repairs are obviously failing. It is difficult to estimate with certainty how much additional insulation is required but in my estimation 200 m² of insulation at the very least is required. The experts are agreed that scaffolding to all elevations of the building will be required and will cost about £25,000; there is some issue as to whether an allowance for additional adaptations of the scaffolding would be required but it seems to me that this can best be covered by a contingency allowance. The appropriate basic cost of remedial works is therefore:

This complaint is no longer pursued against S&P. Optima admits in its Scott Schedule response that the defect exists and that it was in breach of Clause 3.1 of the Sale Agreements and that it was liable to be repaired under the Leases. The only issue is what the extent of the bad workmanship in laying the slates was. Mr Brophy has examined the sloping slate covered mansard roofs around the building and has identified problems around the building, if not on every square metre. He identifies workmanship problems around dormer and Velux windows, albeit he also identifies slates which had been laid unevenly and with open joints. There clearly have been actual leaks at the very least through the slate roof which overhangs Mr Hunt’s flat. Mr Molsom’s analysis is very "thin” and there is no evidence that he has actually looked at, through binoculars or otherwise, the whole of this sloping roof around the building.

There is no doubt and I find that the whole of the slate roofing above the entrance to Phase I mostly comprising the steeply sloping roof to Mr Hunt’s flat is in need of complete replacement (67 m²). Mr Brophy confirmed in evidence (Day 4 page 66-7) that the specific areas which he had identified as a minimum needed to be addressed; he was reluctant to say that the whole of the slate roof all around the building should be replaced. My best assessment is that a total of 150 m² of slate roof needs to be removed and re-fixed. A rate has been agreed between the experts at £55.05 per m². A contingency should be allowed to cover any minor localised repairs and adjustments to the slates which are required. The advantage of having full scaffolding up around the building is that this work should be readily capable of being accessed. Accordingly the appropriate basic cost of this work is:

This is a relatively minor but irritating problem. The guttering adjacent to the flat roof and above the mansard roof above the entrance to Phase I (Mr Hunt’s flat) is set too close to the edge of the pitched roof and this has probably caused water to be discharged straight out of the gutter down the slate of the mansard roof and down onto the ground below. All the experts are agreed that this is the problem. It is agreed that £650 is a reasonable figure for the cost of taking off the gutter and laying it somewhat further away from the edge of the pitched roof. I find that this defect was or should have been a very obvious one which Mr Egford should have picked up, he indeed having had the opportunity in December 2003 to look at the roofs again. In my view he should not have certified as he did. Fixing of the gutters as they were fixed was a breach of Schedule 1 of the Building Regulations which requires a rainwater system to be adequate this one was not because it would allow water not to be taken away but simply to overflow as it has done for many years. Optima was in breach of Clause 3.1 as the workmanship was not only poor it was non-compliant with the Building Regulations. The problem has been recorded for some 7 years now and Optima was and is in breach of the “repairing” covenant for having failed to address this properly years ago.

This complaint is no longer pursued against S&P. I accept Mr Brophy’s evidence that soffit boards which are fixed on the underside of the overhanging roof were defectively fixed. He said in his report that the cover trim at the edge of the soffit board adjacent to the brickwork façade is loose and often hanging from the soffit board and that this is either because the cover trims were not secured or have become loose by reason of inadequate fixings. Mr Egford had noticed in September 2002 that the soffit boards as installed were not satisfactory and in December 2003 that the cover trim at each level was uneven and in some places needed additional fixings. Mr Molsom says that these soffits were lightweight UPVC and primarily decorative items which will flex with weather conditions and temperature, the implication being that there was nothing necessarily wrong with the installation but that the necessary work is essentially just a maintenance item which has to be done from time to time. Mr Brophy said, and I accept, that, if there was good workmanship, things would not be nearly as bad as they are. There was a breach therefore of Clause 3.1 in that the Building was not constructed in accordance with the Building Regulations (Section 7). The experts agree that the remedial works will be between £2,000 and £4,000. In my view, a fair allowance is £2,000 and it is implicit in what Mr Brophy says that some of the work necessary would not be attributable to bad workmanship but to the need for maintenance sooner or later. The problem has been obvious for some years now and Optima was and is in breach of the “repairing” covenant for having failed to address this properly.

The structural experts are agreed that there are areas of the upper floors which exhibit excessive bounce when traversed although the extent and cause of the problem is not agreed but it is agreed that the floor requires stiffening in the areas that exhibit excessive bounce. There is no problem on the ground floor which is constructed of concrete. The upper floors were designed and installed by Thermatech. Mr Chick is the only expert to have done a comprehensive inspection and analysis of the Claimants’ flats as well as a number of others. He has found an excessive degree of bounce or as he calls it "a high degree imposed load movement" on his plan IG10/351/03 attached to his report. He does not find it in every room but he finds it in almost every room of the Claimants’ flats (bar the ground floor). The excessive bounce manifests itself when a person of average weight or more walks across the floor, particularly in the centre, and the floor can be felt physically to deflect and cause ornaments and the like on tables and chests of drawers audibly and physically to move. I accept his evidence that this is excessive. I accept his evidence that this is a prevalent problem throughout almost every room in the upper floor flats and it was not effectively gainsaid by the other two experts, who had not checked nearly as many floors as Mr Chick.

There is an issue between the parties and the experts as to what are the cause or causes of the excessive bounce. At the very least the experts are agreed that that there are numerous examples of bad workmanship within the floors. Because the flats were occupied, relatively limited opening up of the ceilings and floors was done by the experts which revealed joist lengths between 5.7 m and 6.2 m and joist widths varying between 70 and 150 mm. The joists were called "Posi joists”. These joists were found to be incorrectly assembled with metal webs not securely fixed to the timber, with hooks being loose and corroded, joists installed the wrong way up, gaps left in places where they should not have been, and joist hangers were poorly fitted. I accept his evidence which was not seriously challenged if at all by the other two experts. As Mr Chick said, the workmanship was poor and he was "astounded "that nobody of a professional capacity either observed the defects during construction or saw that they were corrected or refused to sign these works off to be in accordance with Building Regulations." He says that the defects were obvious and he could not see how such poor workmanship "could not have been noted by building professionals".

I have no doubt and I find that the workmanship was poor in many places. This is partly corroborated by the history of events. Although TRADA came in twice to report on the quality of the construction, that organisation was not invited back to see that its complaints and criticisms of it had been followed up. Mr Chick was surprised at the "catalogue of errors and items...installed incorrectly"; it is reasonable to infer from this and also from the defects found by Mr Chick that the standard of workmanship in relation to the flooring and its supervision was poor. There seems to have been an almost constant changing of layouts which led to there being an apparently illogical distribution of narrower width joists and wider joists in places in which one might expect to see the reverse. There can have been little or no effective supervision and coordination given the defects found by Mr Chick which remained in place. The placing of the Posi joists upside down so that they were in compression rather than tension meant that the floor at least in those areas would not perform as it should.

The major issue between the experts is whether or not the floors were effectively under-designed. Mr Chick is in no doubt that they were. He is critical of the original design calculations carried out by a firm of Chartered Engineers, Sands, where the output from the calculations is, he considers, minimal; Sands used a dead load of 0.68kN/m² although the specification lodged with Building Control, he calculated, provided for a dead load of 0.94kN/m². He said however that the floor finishes throughout the flats vary so that for instance in Mr Hunt’s flat there is tiling, as there is in the bathrooms in the other flats, as the result of which the dead load he says will be significantly exceeded. He says that the differing floor finishes either laid at the time of construction or foreseeably to be laid by owners when they took occupation should have been taken into account when the structural calculations were produced. He points to Posi joist published information which shows a maximum span of 5.8 m (with 72 mm width of joist) and 6.2 m (97 mm width). He suggests that a number of these joists are supported on steel beams which are not fully rigid and that no allowance has been made for the fact that both the joist and a steel beam on which it is supported will deflect so there will be a compound deflection. Allowing for the deflection on the steel beam and the deflection of the Posi joist itself, the deflection would be 14 mm which is greater than that which is recommended. I accept his evidence. The very fact that the deflection is a widespread problem through most of the rooms in the upper floors seen by Mr Chick suggests, at least, that, although the bad workmanship is undoubtedly widespread, there may well be an all pervading problem which is a design one.

I found Mr Bothamley unconvincing on the issue as to whether there was a design overload. He started to refer under cross-examination to some calculations which he had done which were not annexed to his report; later, after the closing submissions, he produced some calculations which were clearly done after the trial, which suggests that the calculations which he refers generally to in his report had either not been done or were not adequately done (otherwise those ones could have been produced). He accepted in his report that the under-sizing of the Posi joists was at the very least a viable cause for the "abnormal bounce". Mr Tutt did not carry out any calculations and his views, I found, were unconvincing. He did accept however (in Paragraph 5.2.4 of his report) that if the 14 mm deflection limit is exceeded the floor would not be considered to be structurally adequate.

In my view, Optima was in breach of Clause 3.1 of the Sale Agreements because the flooring was not completed in a good and workmanlike manner or with suitable materials and there was non-compliance with the Building regulations not only in that regard but also as a matter of design, in particular in relation to Paragraph A.1 of the Schedule in that the building, in particular the floor is subject to deflection or deformation.

The issue of whether or not Optima was in breach of its landlord’s "repairing" covenant is slightly more intricate. Certain it is that wording within Clause 4.6.1 requiring the Landlord to "repair" "renew" or "amend" is itself wide enough to cover the sort of work required to put right the deflection problems. Clause 4.6.1 requires such work to the "main structure of the Building". The “Building” is essentially described as Jubilee Mansions as a whole and therefore covers the demised Premises (the individual flats). Clause 4.6.1 goes on to cover in particular the "timbers (including the timber joints [probably joists is meant] and beams of the floors and ceilings thereof". This is making it clear broadly that the timber floors are considered as part of the main structure of the Building. Clause 4.6.1 (c) extends the obligation in relation to the "floor joists of the Premises". The First Schedule defines the Premises as expressly excluding the "main timbers and joists of the Building". I therefore conclude that Optima is also in breach of Clause 4.6.1 because it has failed to repair renew or amend the joists within the floors of the flats which exhibit the deflection problems; this problem has been known about for at least 2 years now and liability has been strenuously denied.

As for S&P, I find that it is probable given the bad workmanship and the excessive design deflections that the floors would have noticeably deflected so that when an inspecting architect such as Mr Egford walked over them he would have experienced the movement. This finding is supported by the evidence of Mr Brophy when he said that this would have been evident up to and beyond completion of the works. He also said that this should have been noticed by a reasonably competent architect doing inspections and particularly his final inspection (Day 4 page 78). Mr Armes did not really positively challenge this, although in the "hot tub" he did say that he was not sure that it was "entirely clear cut", that this was a matter for the structural engineers and that he was speculating as to whether the deflections have got worse over the years. I found him unconvincing on this. I therefore accept and find that S&P was in breach of its duty of care in failing to pick up these extensive deflection defect problems and to withhold his Certificates until satisfied that the problems had been remedied.

I will consider remedial works below in relation to the acoustic issues.

I have no hesitation in finding that the sound insulation provided was both unsatisfactory and inadequate as well as being non-compliant with the Building Regulations. Both Mr Brophy and Mr Armes accepted this. Mr Molsom accepted that, if the level of sound transmission were such that it kept retired people awake at night, night after night, the floor has arguably failed.

Mr Peace’s evidence was striking. He said:

“…the most upsetting thing for me has been to see my wife in tears in the early hours of the morning because we are unable to sleep because people above us are walking about. We have no sense of ownership of this property. We just - it's like living in sharing the building with other people because we are so intimately acquainted with what they are doing on an everyday basis and it is very, very distressing…this is everyday noise…we have also suffered from noise from two floors above us”

In his witness statement, upon which he was not challenged effectively if at all, he said:

“The noise is at such a level that everyday activity is heard within [Flat 17] and as a result my wife and I cannot sleep until the residents above have gone to sleep. My wife has been forced to sleep using ear plugs but is still awoken by the noise. In order to achieve a peaceful night's sleep my wife and I would spend as many nights away from [Flat 17] as we could and in 2011 this totalled over 100 nights. My wife and I own a motorhome and had even stayed at sites on the outskirts of Peterborough to have an undisturbed night's sleep."

All the Claimants, except Mr Hunt in his penthouse flat, complain about the noise.

E2 of the Schedule to the Building Regulations requires a floor separating one dwelling from another to have "reasonable resistance to the transmission of the airborne sound" and to have "reasonable resistance to the transmission of impact sound". I find that this regulation has simply not been complied with. It is common ground between the experts that regard should be had to "Approved Document E" issued in relation to the Building Regulations 1991 and which addresses ways of providing effective sound insulation against airborne and impact sound. It identifies, albeit not exclusively, forms of construction which would comply with the requirements, one of which is referred to as “Floor type 3” which is a "timber base with floating layer". The most appropriate floor is one which has a "floating layer of timber or wood-based board 18 mm thick, spot bonded to plasterboard 19 mm thick over a resilient layer of 25 mm mineral fibre floor over a floor base of 12 mm timber boarding or some other base resting on joists and within the floor cavity around the joists containing 100mm absorbent material; the underside of the joists forming the ceiling for the room below would comprise two layers (30 mm thick) of plasterboard. There would be 204 mm thickness of various materials excluding a void within the joists”.

The Specification prepared by Optima put forward a specification and sound insulation very similar to this Floor type 3, comprising 18 mm chipboard on 19 mm plasterboard on 30 mm "Rockflor" (a proprietary sound resilient layer) on 15 mm plywood overlying 100 mm thick material between the joists with two layers of plasterboard 31 mm thick on the underside of the joists, with a total thickness of 213 mm.

The contemporaneous documentation suggests that, possibly for cost reasons, the original specification was changed so that as built the floor comprises 18 mm chipboard applied directly on top of the joists, with 100 mm of mineral wool insulation between the floor joists overlying 16mm "resilient bars" overlying 31 mm of plasterboard. As the "resilient bars" are not continuous, the overall thickness of the sound insulation is obviously much less than was specified. The idea of the "resilient bars" is in effect to accommodate and deaden impact sound. This idea was promoted by Lafarge (as appears in the history above). It clearly has not worked and, as Mr Brophy says in his report, the acoustic separation between floors is very poor.

There was a somewhat sterile discussion between experts as to whether appropriate decibel ratings were in fact achieved by the flooring provided. It was sterile because the reality is and has been that the sound insulation is hopelessly inadequate. Optima had a sound insulation test carried out in June 2011 by a firm called Practical Acoustics whose report was attached to Mr Milsom’s report. These showed that airborne tests on floors failed whilst most impact tests, bar one failed. However, the impact tests were not carried out in accordance with the Building Regulations sound test requirements because they were carried out over and through soft floor coverings which will deaden the sound impact. They are therefore of little assistance, particularly in circumstances where the actual sound transmission is highly intrusive. There was also a discussion between the experts as to whether the Lafarge calculations which supported the change to the specification were compliant with the Building Regulations or not. I prefer the views of Mr Brophy on this who analysed that information to show that the laboratory testing and calculation provided by Lafarge itself shows non-compliance.

In the light of the above I find that Optima was in breach of Clause 3.1 of the Sale Agreements because the Building as a whole did not comply with the Building Regulations. So far as S&P is concerned, the flats were not constructed to a satisfactory standard. I accept Mr Brophy’s evidence that S&P should not have accepted the separating floors, because they were not compliant with the Building Regulations; it is clear from his inspection notes that Mr Egford was aware precisely what was going on. Mr Armes properly accepted in evidence that he should have picked up the fact that the floating layer above the joists had been omitted, that the construction had moved away from the typical floor addressed within Approved Document E and that testing was required; he knew that no further testing was done and that the Architects certificates should not have been issued until such tests are being completed and the floors have been shown to pass (Day 4 Page 26). In the light of the evidence from both these experts and the Claimants’ evidence, I find that S&P was in breach of its duty of care both during its inspections and also in the issuing of the Certificates.

The issue of whether or not Optima was in breach of its "repairing" obligation is more complex in relation to acoustic problems than in relation to the floor deflection issues. It is not the timber joists which need to be repaired, renewed or amended to put right the sound problem. Essentially, additional sound attenuation needs to be added below and, above or within the floors. It is not the structure which needs to be addressed. The emphasis in Clause 4.6.1 (a) and (c) is on the structural elements and the floor joists excluding plaster or other surface material. I conclude therefore that Optima was not in breach of Clause 4.6.1 with regard to the unwillingness or failure (if such it can be described) on the part of Optima to do any work to resolve the sound insulation problems.

So far as remedial works are concerned, the bad workmanship in relation to the deflection problems can, largely, be repaired by opening up the floors within the relevant Claimants’ flats. The under-design however, can not as readily be addressed without access also from the ceilings below as this would involve full depth strengthening on each side of each joist. The sound insulation work would involve the interposition below the floor surface of additional insulation layers and that itself could be done from within the flats. The ideal solution to limit noise from flats above however would involve doing such work in the flat above and that would involve very substantial disruption to the upper flat owners or occupiers because the floors would have to come up and the flats could in practice not be occupied whilst those works were going on. There would also necessarily have to be a wholesale redecoration of those flats. Whilst there is no evidence which has been admitted that the other flat owners would not consent and there was no suggestion during the trial that such consent would not be forthcoming, it is at least not unreasonable to infer that such owners would seek to be compensated for the consequences of that disruption, in terms of lost rent, alternative accommodation, furniture storage and the like. Undoubtedly that would add yet further to the cost.

The experts for the Claimants have come up with two solutions, the first and clearly preferred solution involving the opening up of the floors in each of the Claimants’ upper storey flats, the opening up of the floors in the flats above and works also to and within the ceilings of the Claimants flats. The alternative is for remedial works being done from within the individual flats of the Claimants.

The problem is primarily one of cost. The Claimant's quantum expert, Mr Nutland, has identified a total costs of £1,261,849.22 made up as follows:

Whilst it will be seen later in this judgment that I am not persuaded that these full percentages are always justified, there will undoubtedly be add-ons. The total cost would be between £1.1 million and £1.2 million which appears to be simply on its face a disproportionate amount to spend, particularly if one compares it to the prices paid by the Claimants. The purchase prices range between £205,000 (Flat 5) and £280,000 (Penthouse 1), an average price of some £243,000; this remedial scheme would cost an average £200,000 per flat. The add-ons add some 55% to the base cost. Whilst house prices rose from 2003, the impact of the economic downturn since 2008 may have depressed prices. The single joint valuation expert identifies a flat (Flat 7) sold for £195,000 in October 2011 and he says that the reduction is due to market factors, it being £80,000 less than the price paid for it in 2003, although he does accept that it is at least possible that the defects may have played a part in this lower valuation.

The alternative scheme is costed by Mr Nutland as follows:

It will be seen from a comparison of the two sets of figures that the enabling work is inevitably much cheaper, as is the acoustic work, but the strengthening work is more expensive, doubtless because the access through and around the joists only from above is much more difficult. I find, and it is clear from the evidence, that the overall cheaper solution will still provide an adequate solution to the deflection or bouncing problems in the floor.

The exercise of determining what is a reasonable solution to the acoustic problem is a difficult one. On the one hand, Mr Brophy and Mr Armes both say in effect that to achieve effective reinstatement, the remedial solution should address the floor above so as to achieve what a properly designed and constructed floor should and would have achieved. The problem they highlight is that the acoustic solution that can be achieved from below, that is within the individual Claimant’s flat, can not provide a separating floor that is compliant in effect with the Building Regulations; such a solution would involve installing an independent ceiling which will reduce the height of the ceiling by 150-200 mm and will not achieve the original acoustic criteria which Optima was obliged to achieve and which S&P should have insisted upon. Mr Armes says that, in relation to this lesser solution, in the absence of any calculations from an acoustician to support such a solution, it is unlikely that it will be effective because it does not deal with flanking noise transmission from above; without such justification, he feels that costly and disruptive remedial works carried out within the flats could be largely ineffective.

Mr Molsom comes up with a pragmatic solution which involves installing a heavy resilient layer on the floors above, recommending products called Soundlay or Acoustilay, saying that these products would probably meet more stringent 2003 Building Regulations sound requirements. He says, doubtless on instructions from Optima, that this work can be carried out for the benefit of the Claimant owners of Nos. 5, 14 and 17 as Optima owned the apartments above "and can grant access when required". He says that where access can not be required there is another product called Maxiboard which consists of dense plasterboard with an internal acoustic layer which is effectively a fourth ceiling which can be erected simply and quickly within the individual Claimant’s property. Wearing his quantum hat, Mr Molsom produces some costings at £66.50 per square metre for the Acoustilay and £124 per square metre for the Maxiboard. He comes up with a total of £23,940 relating to 5 flats (excluding Penthouse 1) which assumes that each flat has an average size of 120 m² of which 70% consists of what he calls "habitable areas" 50% of which fails acoustic testing which he recommends and which therefore require some soundproofing. This includes much lower percentage add-ons for overheads, contingency and professional fees than adopted by Mr Nutland. In my view, whilst there is a lot to be said for systems such as he recommends which will reduce sound, particularly impact sound, from above, I consider that he is wrong to limit the soundproofing in effect to 35% of each flat. Even at his rates, one would come to a figure of £68,400 to achieve sound insulation overall for the five flats. That does however compare with nearly £200,000 for the acoustic work (excluding enabling work) allowed by Mr Nutland in his scheme for work in flats above.

I have formed the view that it would be wholly unreasonable for damages to be assessed by reference to a remedial scheme which would involve a wholesale upheaval to the flat owners or occupiers above at a relatively massive cost in circumstances in which there are alternative much less disruptive solutions which, whilst less certain, stand a reasonable prospect of achieving a substantially improved sound attenuation between the flats. I can not see that the spending of an average of about £200,000 per flat can be justified in circumstances in which the execution of that work will not add anything like the equivalent sum to the value of the property. In the absence of evidence from the Claimants that they actually intend to carry out this very expensive solution, what the Court has to do is, albeit based on reinstatement, to allow a reasonable sum for a reasonable level of reinstatement in circumstances in which such reinstatement will probably provide significant improvements to overcome the undoubted and serious noise problems which exist in these flats.

A reasonable allowance for the acoustic works for the Claimants’ flats (except Penthouse 1 where Mr Hunt has experienced no real problems relating to noise) can be based properly on a combination of what all the experts collectively have said. It is unnecessary for the Court to decide precisely which remedial scheme is more reasonable than the other as a reasonable allowance will suffice to enable five of the Claimants to do what is reasonable to alleviate the noise problems. Alternative calculations exclusive of add-ons are:

That leaves consideration of the enabling works in relation to the ground floor flats of Mr Bedwell and Ms Ransome which even on the lower value internal flat approach seems to involve in effect the gutting of these ground floor flats including the removal and reinstatement of flooring, partitions, skirtings, radiators, wiring and the like. Because there is nothing wrong with their floors, based as they are on concrete, a reasonable allowance for enabling works is likely to involve much less than the basic costs of £39,550.47 and £33,930.36. For instance, I can not see that removing the flooring or the skirting on the non-partition walls would be necessary, albeit that I can see that the removal of the partitions is probably necessary to facilitate an internal remedial acoustic scheme. Doing the best that I can on Mr Nutland’s figures in Appendix 9 to his report, I have formed the view that reasonable allowances for enabling work are £30,000 and £27,000 respectively.

As for the strengthening works, I am satisfied that it is wholly reasonable for the Claimants (apart from Ms Ransome and Mr Bedwell on the ground floor) to have substantial works carried out to their floors almost all of which suffer from excessive deflection. It is accepted by all the experts that the floors have to be opened up with the coverings and chipboard or other timber taken up and that, at the very least the bad workmanship, needs to be addressed. To do that job properly within their flats, there will inevitably have to be substantial disruption. In broad terms, I accept the Claimants’ expert evidence that substantial strengthening works are required in addition to simply putting right the bad workmanship and that will inevitably involve the bulk of the works identified in Mr Nutland’s report. Subject to the following, I broadly accept Mr Nutland’s pricing evidence. A number of valid points were made by Mr Molsom and Mr Byford for instance in relation to £3,000 being allowed for the removal of the kitchen in Penthouse 1 and its reinstatement at a cost of £12,500; an allowance of £2,000 and £8,000 respectively is an appropriate basic cost allowance because, although the kitchen units and the like are extensive and of good quality, I can not see that a labour cost equating to £15,500 is realistic. A rate of £75.30 per linear metre is used for the replacement of fibrous plaster cornices and the like in circumstances in which the architect experts were of the view that it was likely that appropriate decorative cornices can be bought off the shelf at a rate of about £15 per linear metre. A number of other points are made which have some merit and, in my view, a reduction of 5% on the basic enabling works costs in the secondary scheme would be appropriate. On this basis, the enabling works will need to be reduced as follows

This produces the following basic costs:

The problem in this instance is that the riser ducts were not fire rated in accordance with the Building Regulations, they were not constructed in accordance with the Building Regulations and they were not acoustically separated as between flats. Apart from the noise aspect, the absence of fire rating and protection against the spread of fire is a health and safety risk. All experts accept that there has been this non-compliance. It is common ground between the experts, and I accept, that Optima was in breach of Clause 3.1 of the Sale Agreements accordingly and that S&P was in breach of its duty of care. The quantum experts have agreed a base cost of £2,500 which I apportion on an equal basis between the Claimants, that is £416.67 per flat. The quantum experts agree that this sum would not be due if the full scope of the works against the two preceding items addressed above are undertaken but I have not allowed for the full scope in relation to Flats 1 and 14 and so it is only for those two flats that the basic cost sum of £416.67 is due.

There was no access provided in Mr Bedwell’s flat (Flat 14) to the boiler. The complaint in the Scott Schedule is that boiler gas flues run through the separating floor voids. Mr Brophy does consider that the boiler flues within the voids have been installed in contravention of Approved Document B issued in connection with the Building Regulations and he said in evidence that they should have been but were not fire stopped. I accept that evidence. As for the boiler access, Mr Brophy says that this was unsatisfactory and that S&P should have picked up this point and not have issued the Certificate. Mr Armes said that he would not criticise S&P and not picking this up in one out of many flats, it not being said to be present in other flats. Apart from the fact that the boiler access is not pleaded as a complaint, I am unconvinced that S&P can be criticised for failing to pick up this one individual deficiency relating to access to one boiler and also for failing to pick up the lack of fire stopping to the gas flue. However, Optima was in breach of Clause 3.1 in respect of the lack of fire stopping around the flue. It is unnecessary to make a finding in relation to the boiler access in Flat 14 given that it is not pleaded. So far as quantum is concerned for the fire stopping, the experts had agreed a sum of £2,000 but that was probably in relation to the boiler access and to the fire stopping. Accordingly, doing the best that I can, I assess the cost of remedial work as £200, particularly in circumstances in which damages have been allowed to Mr Bedwell for substantial enabling works which will permit the opening up of the ceilings and the fire stopping work can then be readily done.

All electrical socket outlets opened up and seen by the experts had been found to lack the necessary fire resistant material to the rear. This is a clear and obvious breach of the Building Regulations as it represents a fire hazard. I infer that this is a widespread problem not only because all sockets opened up display this problem but also by reason of the extensive bad workmanship elsewhere. Both Mr Brophy and Mr Armes accept that in those circumstances S&P should have been put on notice and I find therefore that S&P was in breach of its duty of care. The quantum experts are agreed that a basic cost of £885 should cover the requisite remedial work, that equating to £147.50 per flat.

To a greater or lesser extent, each of the Claimants have spoken of a long history of water leaks, with Mr Hunt for instance describing water leaks from plastic pipes joined by cable to metal joists and pipes splitting. Mr Bedwell moved in on 21 October 2004 and had his first flood on that day; he has incurred leaks from Flat 15 B above him on at least 14 occasions. Mr and Mrs Sahi describe a litany of blockages and leaks. Ms Ransome describes her first leak on the first day she moved in with leaks being caused thereafter. Ms Wyatt tells a similar story with leaks into her flat from the flat above, Flat 8, and from her flat into the flat below, Flat 2. Mr Peace described numerous leaks, again within days of moving in and constant problems thereafter. Indeed, on the site visit, I was shown in two of the Claimants’ flats yet further leakages which had brought down ceilings. Whilst it is true that Optima and more recently the Receiver and Manager have taken some steps to procure some remedial work this has proved overall to be ineffective.

Optima itself obtained a report from consultants, TSA, in September 2011, although it was on its face concerned with considering the Scott Schedule defects. Their analysis includes the following:

“3.1…Our inspection show areas of concern indicative of:

•

Poor quality control during the original installation

•

Poor specification of the plumbing works

3.2

[Under sink connections] The quality of workmanship and choice of fittings is poor in many areas which leaves the installation susceptible to leaks. We believe many of the leaks would have resulted from these areas.

3.3

[Push fit connections] … there are areas where supports are lacking… we do have concern that there is an increased risk of a joint becoming dislodged with serious consequences.

4.

There are undeniable defects with the original installation and the owners/tenants have experienced inconvenience and disruption during the past 8 years….

We recommend that works are undertaken to minimise potential legal costs, to pacify the current owners and to ensure that the risk of future occurrences are minimised. The work relates primarily to the plumbing installation, flues and condensate pipework and is a result of poor quality control during the original installation.”

Mr Molsom did not seek to go behind this, although it is not clear that he himself inspected to see what problems there were. TSA recommended stripping out and re-plumbing all kitchen under sink waste pipework and replacing it with properly supported pipework as well as stripping out and re-plumbing all waste pipework up to the main vertical risers with pipes and joints properly clipped.

I am satisfied that there was extensive bad workmanship and bad practice particularly in the plumbing services and waste pipework connections. A particular problem noticed by Mr Brophy was that pipes had no supports or hangers. There were clear breaches of the Building Regulations. Optima admits that it was in breach of Clause 3.1 in relation to under sink connections which are poorly fitted and that various localised fittings in the flats were inadequately supported and would require fixing; it admits that stripping out and re-plumbing of the kitchen under sink waste pipework is justified. Apart from the wide evidence of leaks from the start and continuing, there was evidence that the plumbing was done at least in part by the same sub-contractor as did the foul drainage works which, as will be seen below, can be described as no better than hopeless. I infer therefore that there are more widespread problems attributable to bad work. So far as S&P is concerned, I accept Mr Brophy’s evidence that a competent inspector in Mr Egford’s position should have picked up on the fact that there were widespread plumbing defects and I find that he should not have issued his Certificates unless and until he was properly satisfied that such defects had been put right. Both S&P and Optima were in breach of their respective duties of care and, in relation to Optima, in breach of in Clause 3.1 as well. I am also satisfied that Optima was in breach of Clause 4.6.1 for failing effectively to maintain, repair, renew and/or amend the various drains and pipes within the building. Whilst it might be forgiven in its position as landlord for assuming that the first few leaks were one off problems, I have no doubt that by 2007 there should have been an appreciation that the plumbing works throughout the building had been poorly installed and needed very substantial remedial work which was never done; at best some ad hoc repairs were done which simply did not address the overall and underlying defective state of the plumbing and pipework within the building.

Surprisingly, the quantum experts agree that the basic cost for addressing these problems in the future will be only £2,200 which begs the question as to why Optima did not get on with appropriate remedial works years ago. This only applies to (by reference to the Scott Schedule) Flats 5, 14, 15a and 17. I will return to the individual historical claims below, which may give rise to separate and incurred costs and loss.

Mr Brophy has identified a problem in Flat 17 which all three experts demonstrated to me on the site visit. This relates to the fact that the boiler installed within Flat 17 has a flue which has to run 8.5 m before it reaches the external wall. The flue runs within the ceiling void and the relevant boiler literature suggests that the flue should have been installed at a gradient of a least 3° which would have required a fall of 425 mm to the outside wall. At most the fall is less than three quarters of what it should be. Mr Brophy gave evidence that the problem was that the exhaust fumes can not get readily dispelled and the result is poor performance of the boiler which might cut out from time to time. He says that it was contrary to Building Regulations TSA accepted that the fall was incorrect and Mr Milsom accepts that some work should be carried out.

I am satisfied that Optima was in breach of Clause 3.1 and that the installation did not comply with the Building Regulations. I do not accept however that Optima was in breach of Clause 4.6.1 because this flue is not part of the structure and it is not a chimney stack, drain, external pipe, sewer, drain, channel, water course or gas or water pipe. Mr Brophy says and I accept that S&P should have picked up this problem because, as confirmed by the site visit, one can readily see that the boiler is a substantial distance from the outside wall. From the adjacent corridor between the boiler and the outside wall it was and would have been obvious that the flue could only have been running within the relatively narrow confines of the ceiling above which was no more than 304 mm deep. Accordingly, S&P was in breach of duty.

Quantum experts are agreed that a basic cost of £1,200 should provide an adequate remedy, which, coincidentally and pragmatically, Mr Brophy accepted could simply comprise a new boiler which could accommodate the lesser fall as opposed to major works lowering the flu in effect in the adjacent corridor.

There is only one conservatory attached to any ground floor flat and that is Flat 1, belonging to Ms Ransome. There is no doubt that the plot of land, at least, on which the conservatory stands, was conveyed to her by Optima. The Premises are defined in her Lease as "all those premises known as 1 Jubilee Mansions…situate on the ground floor of the Building and shown edged red on the plan…”: the plan shows edged in red the actual flat and the garden area around it on two sides including the area where the conservatory stands. The Lease is dated 19 September 2003.

She gave convincing evidence that she agreed orally with Mr Khazai in August 2003 that she would pay an additional £6,000 in cash for the extra land, a second car parking space and for the inclusion of a conservatory. She said that the base of the conservatory had been constructed before she moved in. She paid him this sum on either 20 or 21 September 2003; she produced her partner’s Halifax account statement which showed £6,000 in cash being withdrawn on 20 September 2003. Ms Ransome had previously had a conservatory built for her by a Mr Allington and she clearly thought that he might be a suitable person to build or build part of the conservatory at Jubilee Mansions. Mr Khazai said in evidence that (at the very least) he had agreed that the work by Mr Allington (which was to relate to the provision of the superstructure being the galvanised steel structure, glazing and doors, to be placed on brick walls constructed by others) would be paid by Optima, as indeed it was. Ms Ransome said that the agreement between them also extended to her paying for the necessary work for the construction, including the foundations, the base, the brickwork and the superstructure, the price being agreed was £3,000 for the work up to and including the brickwork and £9,600 for the glass superstructure. She said that the base, which must have included the foundations, had been carried out by the time that she purchased the flat. Her version of events is corroborated by an e-mail from Mr Khazai at Optima on 5 September 2003:

“Thankyou for the details of the conservatory base, the cost of materials including the footings which are deeper than I originally thought at 1½ m instead of 1m so 500ml of extra made up ground will cost no less than £1750 and no more than £2000.

We would concrete the whole base including insulation ready for you to do a 75ml screed and tile to suit.

If you are interested let me know, we can hopefully get it done next week. Update on your property all should be well for the 14^th…”

Mr Khazai was correspondingly unconvincing. He said that he had no recollection about the £3,000 payment for the conservatory base. He said in effect that Ms Ransome directly engaged a Mr Viara (who was a contractor engaged on other work at the site by Optima) to do this work and that he was not involved in the arrangement between the two of them. This however is directly at odds with the e-mail which he himself wrote on 5 September 2003 when he said that Optima would concrete the whole base.

I have no difficulty at all in accepting Ms Ransome’s evidence on this issue. It is clear that there was a pre-existing agreement between Optima and her prior to the Sale Agreement and the Lease that Optima would be responsible to carry out or to procure the carrying out of all the works associated with the provision of the conservatory extension. That was a primary reason why a substantial area of garden on which the conservatory stood was conveyed to her. The Premises therefore conveyed to her included the conservatory and, in so far as the conservatory had not been completed by 19 September 2003, the date of the Sale Agreement and the Lease, Clause 3.1 of the Sale Agreement required Optima to complete it to an appropriate standard. It appears to have been completed by a date in October 2003.

There is no doubt that the conservatory has suffered significant damage from differential settlement. This is not surprising as the main building is constructed on piles and the conservatory is constructed on what is in effect some form of strip footing. Mr Chick excavated a trial pit which showed that the foundations to the conservatory consisted of a concrete slab 250 mm thick extending to an overall depth of about 425 mm; this suggests that there was some thickening of the concrete slab around the edges. A ground investigation carried out before the development showed that the ground conditions consisted of fill and weak substrata. Engineering experts agreed that the conservatory is suffering from progressive settlement and that remedial works would involve reconstruction of the conservatory over a new piled raft. Mr Bothamley simply did not deal with the issue in his report. Mr Tutt accepted that the way that it was constructed was pretty well bound to lead to differential settlement, particularly since it was sitting on sloping ground.

Optima was in breach of Clause 3.1 in that the work was not completed in a good workmanlike manner. Both Mr Brophy and Mr Armes consider that the Building Regulations would not apply because a conservatory is usually exempt where it does not exceed 30 m² where the glazing otherwise complies with Building Regulations requirements. I accept that view and accordingly Optima was not in breach of Clause 3.1 in relation to non-compliance with the Building Regulations.

So far as S&P is concerned, Mr Egford did interest himself in the extension because in his site inspection notes dated 2 December 2003 he recorded that the "situation regarding the conservatory to the rear of the property [was] to be considered" and he raised the question as to whether planning permission had been granted. This suggests that he felt it incumbent upon him to comment. He does not say that the conservatory "situation" had to be considered by anyone else but him. He issued his Certificate for Flat 1 in April 2004 but it is unclear whether he had considered whether the conservatory had been satisfactorily built. Certainly, he visited the site again in February 2004 and he had the opportunity to consider the conservatory and its construction then. There can be no doubt that if he had wished to do so he could have found out what its construction was. He knew or must have known that the conservatory had been built and was attached and connected to Flat 1. Mr Egford’s witness statement does not deal with this but he was asked some questions when he gave his evidence orally. In effect he said that, because it did not need Building Regulations approval and it was “totally outside the contract”, he did not need to do anything about it. He did not explain why he did interest himself in it at least as his note shows. He engaged in some after the event rationalisation here because he tried to argue in effect that Ms Ransome had arranged to have the conservatory built herself, which, as it turns out is wrong. His evidence was not helpful to the Court in this regard.

I have formed the view that, as for other variations and changes, S&P was required to issue Certificates in respect of the individual premises which were to be conveyed to individual purchasers. In the same way that the documentation and history has thrown up numerous changes for instance that were made to the internal wooden structures in which S&P would be expected to take an interest in, so S&P before issuing a Certificate in respect of Flat 1 should have done something more to consider whether or not at the very least the property (in this case which would include the attached conservatory) had been built "to a satisfactory standard" as Mr Egford was to certify in April 2004. The position is in reality that he had no idea one way or the other whether it had been built satisfactorily. A few very simple questions would doubtless have revealed that there were wholly inadequate foundations and that the conservatory would inevitably settle differentially and in all probability begin to tilt away from the firm and piled main part of the building structure. In that context I accept the evidence of Mr Brophy that S&P fell below the requisite standard of competent architects in issuing the Certificate in question.

That however does not finally conclude whether or not there is liability because limitation defences are raised both by Optima and by S&P. First, it is necessary to consider when the cause of action against S&P finally arose. The extension was completed more than six years before the proceedings issued. However, the Building as a whole was not completed until about April 2004. Accordingly, although a cause of action arguably arose more than six years before, overall there was a continuing failure which gave rise to a further cause of action against Optima until the Building as a whole was completed in April 2004. The cause of action against S&P runs on the face of the Certificate from April 2004 for 6 years and accordingly it is not barred by limitation.

There is, at least potentially, an added string to Ms Ransome’s limitation bow which arises under Section 14 A the Limitation Act 1980 which states:

“… (3) An action to which this section applies shall not be brought after the expiration of the period applicable in accordance with subsection (4) below.

(4)

That period is either-

(a)

six years from the date on which the cause of action accrued; or

(b)

three years from the starting date as defined by subsection (5) below, if that period expires later than the period mentioned in paragraph (a) above.

(5)

For the purposes of this section, the starting date for reckoning the period of limitation under subsection (4) (b) above is the earliest date on which the plaintiff or any person in whom the cause of action was vested before him first had both the knowledge required for bringing an action for damages in respect of the relevant damage and a right to bring such an action.

(6)

In subsection (5) above “the knowledge required for bringing an action for damages in respect of the relevant damage” means knowledge both-

(a)

of the material facts about the damage in respect of which damages are claimed; and

(b)

of the other facts relevant to the current action mentioned in subsection (8) below.

(7)

For the purposes of subsection (6)(a) above, the material facts about the damage are such facts about the damage as would lead a reasonable person who had suffered such damage to consider it sufficiently serious to justify his instituting proceedings for damages against a defendant who did not dispute liability and was able to satisfy a judgment.

(8)

The other facts referred to in subsection (6)(b) above are—

(a)

that the damage was attributable in whole or in part to the act or omission which is alleged to constitute negligence; and

(b)

the identity of the defendant; and

(c)

if it is alleged that the act or omission was that of a person other than the defendant, the identity of that person and the additional facts supporting the bringing of an action against the defendant.

(9)

Knowledge that any acts or omissions did or did not, as a matter of law, involve negligence is irrelevant for the purposes of subsection (5) above.

(10)

For the purposes of this section a person’s knowledge includes knowledge which he might reasonably have been expected to acquire—

(a)

from facts observable or ascertainable by him; or

(b)

from facts ascertainable by him with the help of appropriate expert advice which it is reasonable for him to seek;

but a person shall not be taken by virtue of this subsection to have knowledge of a fact ascertainable only with the help of expert advice so long as he has taken all reasonable steps to obtain (and, where appropriate, to act on) that advice”.

This Section has been reviewed by the House of Lord in Hawards v Fawcetts [2006] UKHL 9 and the TCC in Harris Springs Ltd v Howes [2007] EWHC 3271 (TCC). What can be extracted from these decisions are:

It is clear from her evidence however that Ms Ransome was aware in 2006 that there was a significant problem because she noticed that the "wooden floor had actually sort of buckled…it had all buckled up". The floor was taken up and it was seen that the conservatory had "actually cracked away from the building" (Day 2 Page 98). She asked Optima to come and look but they were not interested because they said that they did not build the base to the conservatory. She saw a solicitor in Northampton and in November 2006 a Mr Auckland inspected and produced a report on the problem. The solicitor suggested legal proceedings. This all happened in or by the end of 2006 or possibly very early 2007. I am therefore satisfied that she could not rely on Section 14A because the three-year period will itself have expired before proceedings were issued because before March 2007 she had been to a solicitor to seek advice about making a claim and indeed an expert had considered the problem.

The claims against S&P and Optima are accordingly not barred by limitation. So far as the cost of remedial work is concerned, the engineering experts expressly agreed that remedial works will involve reconstruction of the conservatory over a new piled raft. Mr Nutland quantified the basic cost at £30,731.99. Mr Molsom in his report said very little except that £25,000 should be set aside for the removal and reinstatement of these works. Mr Byford priced at this as a basic cost of £23,759.90. Mr Tutt had suggested a piled remedial scheme which assumed that the concrete floor slab was effectively reinforced and so could remain in place. Mr Byford valued this alternative at £21,337.17. Given the many examples of poor quality work, I do not accept that there was any or any sufficient reinforcement in the concrete slab to justify its retention as part of the remedial scheme. In this instance, I prefer the evidence of Mr Byford as to the basic cost which seems much more realistic; I bear in mind that this is a conservatory and that its original construction cost was between £12,000 and £13,000 and, if anything, as the quantum experts confirm, construction costs have gone down since the present economic downturn. The construction works are relatively simple: dismantle and set aside to reuse the conservatory glazing and superstructure, demolish the rest, provide relatively limited piling and supported concrete slab and reconstruct and reinstate the superstructure. The issue as to whether this should form the basis of any damages awarded is dealt with below.

The car park is L-shaped, with the entrance from the main road with an area to the left broadly in front of Phase II and straight ahead down a slight slope to the right-hand side of Phases I and II. There are two areas of ponding each towards the opposite ends of the L-shape, measuring respectively about 15m by 5m and 17m by 5m respectively. The other areas of the car park appear to have stood up reasonably well over the last 9 to 10 years. Mr Chick dug two trial pits which revealed that the car park consisted of 60 mm block paviours laid on a bed of 150 mm thick sand overlying fill material. There are no design drawings which identify a specification for the car park but Mr Chick says that what should have been provided was more elaborate with the paviours overlying sand then a damp proof membrane overlying 150 mm of the sub-base, above 450 mm of capping, overlying a fabric membrane. All that the experts have agreed is that there are areas in the car park that require remedial work. Mr Milsom does not really deal with this other than to refer to a report by paving specialist. Mr Tutt does not broadly criticise the form of construction although the depth of sub-base was less in one of the trial pits than it should have been. Both he and Mr Molsom believe that it would be wholly unnecessary to replace the whole car park, as suggested by Mr Chick.

In my judgment, it has not been established that the car park as a whole was constructed or even designed badly. The fact that it has performed well over most of its surface area suggests that it is broadly fit for the purpose. I agree however that, in the two areas where there has been in effect sufficient settlement to cause some ponding: there were localised failings of bad workmanship in that an insufficient depth of adequate sub-base was provided. I do not consider however that Optima was in breach of the original Sale Agreement. The Premises as defined to include the particular flat and the car parking spaces demised and the Building is limited to the outline of the two Phases and does not itself extend into the Car Park. The two areas are not, so far as I can ascertain, within any of the car park spaces demised to these Claimants. Therefore Clause 3.1 does not apply to the Car Park. The "repairing" covenant does not apply to the Car Park in so far as it is not demised to the individual leaseholders, albeit that they are entitled to have access to the common parts of the Car Park, the land interest in it being retained by Optima.

I am also not satisfied that S&P was in breach of duty in failing to pick up the lack of effective thickness of the sub-base material. Mr Egford’s 11 or so visits have not been shown on the evidence to have coincided with the time when these areas were being laid with sub-base. Even if he had asked for several places to be opened up so that he could check that there was an appropriate thickness, he would not necessarily have seen these particular areas. There is no reliable evidence that the large majority of this car park did not have an adequate sub-base.

It follows from the above that Optima is not in breach of Clause 3.1 or of its "repairing” covenant and that S&P was not in breach of duty. If I had found that there was liability, the remedial work costs would have been limited to the areas where there was ponding, 160 m2 at a base rate cost of £62 per square metres on the basis of the remedial scheme put forward by Mr Tutt.

This is a relatively small defect which relates to the surface water drainage at the bottom end of the car park relatively close to the entrance to Phase I. There is broad agreement between the experts that it was incorrectly installed in that no effective concrete benching or kerbing was provided so that it has no protection from wheels of vehicles using the car park. It has obviously failed and fallen away. This part of the car park is to a large extent on one of the car park spaces demised to Ms Ransome. It is accepted by Optima than it was in breach of Clause 3.1 and that it is liable to rebuild and reinstall this drain. I accept Mr Brophy’s evidence that S&P should have seen this and noted it; it is and would have been obvious to anyone such as an architect looking at it that it was inadequately supported.

The experts are agreed on a basic cost of £1,900 for the remedial work. Although there is a similar drain at the other end of the car park, that is supported by a brick wall which itself will discourage and indeed prevent wheels from going over it; that drain is effectively supported.

All sides’ experts have to a greater or lesser extent relied upon reports from specialist drainage contractors, Power Rod and MetroRod, each of which has prepared a report. This has been done by agreement and without challenge as to admissibility. Mr Bothamley does not directly address this in his report but did address it in oral evidence. Mr Tutt does address this in his report but from the way that he gave his evidence he did not appear to have physically looked at the alleged defects.

The matters identified by Mr Chick as wrong are that two manholes, SW2 and SW4, have been placed at the wrong way round and, secondly, that there is a poor gradient between SW3-SW4 and SW4-SW5 so that water ponds and does not evacuate the water. SW4 has an added defect because the rainwater down pipe from Ms Ransome’s conservatory has been hacked into the top of the manhole in what both Mr Chick and Mr Tutt regarded as a "botched" job.

I accept the evidence of Mr Chick and Mr Tutt that there was simply bad workmanship in placing the two manholes the wrong way round so that they are significantly less efficient in disposing of water and in the introduction of the conservatory down pipe water pipe into SW4. This was a breach of Clause 3.1 and it is something for which Optima was and remains in breach of its "repairing" covenant. I accept also the evidence of Mr Brophy that S&P should have picked up this aspect of the bad workmanship; all that Mr Egford need have done was to look and he would have seen these very obvious defects.

The gradient problems represent a more difficult issue. There was a difference between MetroRod and PowerRod who each suggest that the gradient ran in different directions. However Mr Chick has checked this and determined that PowerRod is right. Their report does find that there are many areas where the gradient is inconsistent and that there are low points which hold standing water causing debris to build up; in particular they found that the pipework between SW4 and SW5 was significantly surcharged. The real issue is whether the drains were laid without an adequate gradient or whether they have failed after being laid. On balance, I do consider that they were laid to a sufficient gradient or at the very least it has not been established that they were laid to an insufficient gradient. On this basis, I do not consider therefore that S&P can effectively be criticised because all that Mr Egford would have seen at the time was an apparently adequate gradient. Mr Brophy’s primary criticism is based on an assumption that the undulation is in the gradient were as laid.

So far as Optima is concerned, I am not satisfied on the evidence that it was in breach of Clause 3.1 of the Sale Agreements with regard to the gradient problem. Mr Chick accepted in evidence that the drains may have subsided since their construction but his criticism was that the initial design should have allowed for the (bad) ground conditions and in those circumstances the gradient should have been increased and the contractors should have ensured that the backfill around the pipes was actually correct. It may be that criticism is justified but I am not satisfied on the balance of probabilities that it is made out. That said, there is clearly a maintenance problem which should be addressed. Given at the very least that Optima has been in possession of the PowerRod and MetroRod reports for 18 months or more, it is in breach of Clause 4.6.2.1 in failing to resolve the inadequacies in the drainage runs between manholes or to procure its resolution.

So far as quantum is concerned, Mr Nutland had a basic cost of £7,732.28 but this covers both the manhole problems as well as the drainage gradient problem. Whilst I broadly accept his level of pricing, it is necessary to take out at the very least those items which relate to the excavation of trenches to remove and replace the old drainage runs between the manholes. That involves the sum of £2,907.56 for the first nine items in his Appendix 19. In addition to that he has a lump sum of £1,500 for the extra over costs for break out and removal and work around existing manholes which must actually cover also manholes other than SW2 and SW4. A reasonable allowance limited to those two manholes would be £600. The remainder of the items related to the provision of two new manholes. That leaves a basic sum therefore of £3,924.72 as a reasonable and realistic basic cost, which would be recoverable as damages for breach of Clause 3.1. The reasonable cost of repair for the purposes of Clause 4.6.1 is however £7,132.38.

The primary complaints are that manholes have been constructed to an incorrect depth leading to inadequate falls in the drainage, manholes are undersized and access to or within manholes or inspection chambers is unduly restricted. Again there is reliance on the independent drainage specialist reports referred to above as well as other reports from two other companies, Drainscan and TSA. The experts agreed that incorrect manholes had been used. The experts also agreed in evidence that what was installed bears little relationship to the foul drainage arrangements submitted to Building Control.

Optima admits a number of culpable defects, namely the presence of three sections of the foul drainage which effectively had inadequate drainage gradients, of two improper connections and improper bedding of manhole covers, all of which are said to involve a breach of Clause 3.1 of the Sale Agreements and a liability under the "repairing" covenant.

I find that the pipework was not laid to the proper gradients (1:8 for 100 mm and 1:154 for 150 mm diameter pipes). The main reason for this was that the main manholes overall were laid to invert levels which could not actually produce the requisite gradients. This has been established from the invert levels taken by MetroRod and accepted by TSA which was retained itself by Optima and by the fact that it is clear that that the foul content is not being effectively drained away. The bad workmanship in this regard is corroborated by the fact that the same contractor engaged by Optima worked not only on this drainage but also the foul drainage under the building which on any account was extremely poorly installed. It is also supported by the partial admissions made openly by Optima in its pleadings.

So far as the access complaints are concerned, Mr Chick was adamant that the system simply did not provide adequate access and he pointed to Approved Document H and in particular H1 Paragraph 2.18 which requires there to be sufficient and suitable access points "for clearing blockages from drain runs which cannot be reached by any other means". The manholes, in this case 475 mm in width, were insufficient to enable a person if necessary to get access to the various interceptor chambers by reason of their configurations and relative location were located at places at which effective access to the main foul water drainage runs could not be secured. FMH7 was 2.7 m in depth and table 9 in H1 recommends a width of 1200 mm. Although Mr Bothamley disagreed orally in evidence, he had not addressed the issue in his report and, I suspect, he was in reality adding little more than his two “pennyworth” when he gave evidence; I did not feel that his evidence was reliable. Mr Tutt explained that he was not a drainage expert and, therefore, although he commented on the drainage, I do not consider that his contribution was particularly helpful, honest though it no doubt was. He suggested that Table 10 in H1 called for a manhole only every 90 m; however, 90 m is a maximum spacing and what needs to be provided is appropriate access at or near the head of each drain run, at a bend, at a change of gradient, the change of pipe size and at junctions (see Paragraph 2.21). In any event I prefer the evidence of Mr Chick. It is common knowledge recognised by the Approved Document H that foul drainage, even if it is well designed, can become blocked and it is therefore necessary that good and adequate access is provided to enable effective cleansing, unblocking and the like to take place. It is not enough, I accept, for there simply to be access for some sort of high pressure hose, as suggested by Mr Tutt and Mr Bothamley. I am therefore also satisfied that the manhole and interceptor chamber arrangements for access were inadequate.

Based on the above, I am satisfied that Optima was in breach of Clause 3.1 not only in the respects admitted by it but also in respect of all the defects complained of in the Scott Schedule against it. It is in breach of Clause 4.6.1 of the Leases for failing, now for several years at least, substantially to replace the external foul water drainage.

Mr Brophy stated in his report that S&P should have noted that the inspection chambers and manholes were of inadequate size and that the gradient between FMH2 and FMH6 was by reason of the invert levels wrong and inadequate. Mr Armes properly accepted that S&P should have picked up on the fact that the manholes were of inadequate width, albeit that he considered that they needed only to be one appropriately wide manhole over the whole foul drainage run. Overall, I am satisfied that S&P was in breach of its duty of care in failing to pick up the large-scale inadequacies of this foul water drainage system.

So far as remedial works are concerned, I am satisfied that substantial replacement is required. Mr Nutland produced a basic cost figure of £39,647.72 which includes for the provision of temporary foul drainage whilst the works proceed (£5,000) and reinstatement of gardens (£2,500). Mr Byford has a much more modest basic cost figure of £15,687.59. That still leaves a substantial difference between the experts which is not obviously or easily explicable. I have formed the view that Mr Nutland has been too pessimistic about the two lump sums referred to above and an allowance of £2,000 and £1,000 respectively is more realistic. If the works are well planned, the period during which the connection to the mains sewerage system can not be used should be short and careful execution of the works should secure limited damage to the garden, which mostly comprises grass. I accept Mr Nutland’s figures with these deductions of £4,500, producing a basic cost figure of £35,147.72.

There is an acceptance on all sides that the foul drainage work beneath the building is very poor indeed. Gaps were left in the pipework leading to a direct discharge of foul waste onto the ground, pipework was not properly supported with Heath Robinson type wires and building waste being used precariously as supports, there are dips within the pipework, there are inadequate gradients and a number of the joints simply have not been properly constructed. Liability is admitted by Optima. Mr Brophy is in no doubt that S&P should have inspected the drainage installation within the floor void and, if it had done so, with care or possibly even at all, it would have been as obvious as the most recent photographs taken of the installation demonstrate that it was very poorly done. In his report, Mr Armes said that it was possible that S&P never thought to look at the foul drainage because the (movable) floor beams may have been in place and he thought that it would only be if Mr Egford had opened up the floor that he would have seen the problem. Mr Brophy’s response was that S&P should have and could easily have called for several of the beams to be removed so that he could see. Mr Armes somewhat modified his stance when giving evidence by accepting that he could have called for at least one to be removed for inspection. I accept the thrust of Mr Brophy’s evidence in this regard; it would have been easy and sensible practice for Mr Egford to have asked either for sufficient of the floor beams to be left out so that he could inspect the foul drainage or to have asked for a number to be removed so that an inspection could be made. Either way, if he had inspected, he would have seen the very obvious defects and they would have been put right.

Accordingly, both Optima and S&P are liable for the seriously defective foul drainage on the building. There can be no doubt that Optima has been in breach of its “repairing” covenant in that it has done nothing of any use for years.

There can be no doubt that the total replacement of the foul drainage beneath the building is required, as the experts have agreed. This is going to be difficult work by reason of the limited access and working space and the unpleasant working conditions. Mr Nutland’s basic cost figure is £70,200.70. Mr Milsom has no costing breakdown but he suggests an approach based on what is in effect a repair and patching up of the existing; however, that does not reflect what the engineer experts have agreed. Mr Byford’s figure is £30,252.64 without any add-ons.

There is a complication because Mr Nutland’s figures partly overlap with allowances made by him against Defects 5 and 6; he says in his supplementary report that should the Claimants succeed on liability for those two claims a deduction of £17,700 will be required. This equates largely to work required in Flats 1, 2 and 3 on the ground floor and the consequential reinstatement. Whilst there has been a large measure of "success" on the deflecting floors and acoustic defects, I have reduced the basic cost substantially on those matters. I therefore propose to deduct £9,000 from Mr Nutland’s figure for this defect, although the parties will have been given an opportunity to address me on this before I finally hand down the judgment.

Again it is difficult to understand why there is such a great difference between the two quantity surveying experts. Undoubtedly one is more pessimistic than the other. Mr Nutland has simply added an additional figure of £10,049.18 so to speak as a premium for the contractor to work in confined areas. Given the economic downturn and the competitive nature of the construction market, about which there was evidence, I consider that the allowance should be closer to the £885.69 figure used by Mr Byford, say £2,000. Mr Byford with some justification challenges further figures including work to Flat 3 (£8,750) and suggests a figure closer to £2,000. I agree and would allow only £3,000 against this figure as more realistic. Against the sum of £6,240.65 claim for reinstating some reinforced concrete, Mr Byford points out that the rate used by Mr Nutland is for a suspended reinforced concrete slab. He suggests a reduction of about £3,000; I agree with this because there is no suggestion that what is down there at the moment is such a slab. Accordingly, although I generally accepted Mr Nutland’s figures, they fall to be reduced by £9,000, £8,049.18, £5,750 and £3,000 respectively. That leaves a net sum of £44,401.52.

Mr Chick found when he inspected the ground floors particularly in relation to the foul drainage there were non-structural blocks which partly enclosed the underside of the ground floor in which there were some cracks. He suspects that they were caused during the construction operations when the ground floor was used unsurprisingly as a base from which to carry out operations above and that impacts on the floor by somewhat boisterous use worked their way through to the blocks underneath.

I am not satisfied that Mr Egford can be criticised for failing to pick up this problem as the cracks would have only arisen as the overall building went up and, given their non-structural use, there would have been no particular reason for him to be concerned with them.

Whilst these cracks might well become something which should be dealt with sooner rather than later as a matter of maintenance, I am not satisfied that Optima was in breach of Clause 3.1 because I am not convinced to the requisite standard of proof that these "Premises” were thereby rendered unfit for occupation or that the Building overall as a result did not comply with the Building Regulations. It follows that I am not satisfied that Optima is, yet, in breach of its maintenance obligation, although it would be very sensible for Optima to secure an appropriate repair whilst the remedial works to the foul drainage under the building are carried out.

This part of the claim is therefore not proven.

I will not reiterate the law relating to Section 14A of the Limitation Act 1980, set out above. Whilst she has a cause of action against Optima for the failure to complete the overall Building properly, which is not time barred because the building was not completed until late April 2004, her cause of action against S&P is prima facie barred by limitation because she purchased the property in October 2003 and her Architect’s Certificate is dated 22 January 2004; the breaches of duty had occurred by then in relation to her property and she had albeit unknowingly suffered the loss, in effect buying her property at a greater price than it was worth by reason of the defects which had been carelessly overlooked by S&P.

Reliance is however placed on Section 14A. Certainly, she experienced a number of the problems, such as leaks and noise, from an early stage. However, there were a number of defects of which she was not aware. She lived in her flat between October 2003 and July 2004 and later between April 2008 and October 2009. In between and thereafter she has rented out the property. As she said in evidence, she was only aware of the issues within her own flat. She was not aware of the problems with the main roofs or generally of the wider issues until Mr Chick and Mr Brophy became involved in about 2011. For instance, she did not know that there was a culpable problem with her floors although a tenant had left because he could no longer bear the noise and vibrations from the apartment above which she put down to the ceramic tile floors laid throughout the flat above. Applying the relevant criteria, I am satisfied that, in respect of the following defects (which are the fault and responsibility of S&P for the failure of Mr Egford to pick them up), Ms Wyatt did not have both the knowledge required for bringing an action for damages in respect of the relevant damage and the right to bring such an action until well within the three year period prior to the issue of proceedings in this case:

It follows from the above that, in respect of these particular defects, she has the protection of Section 14 A because she could not reasonably have known anything or enough to enable her to bring an action or to know or even suspect that she might have a right to bring such an action until well within the three-year period prior to March 2010.

Each of the quantum experts, properly, adds to the basic remedial work cost percentage allowances for site establishment/preliminaries/overhead and profit, contingency and consultants fees. The respective positions of the experts is as follows:

There was an intelligent debate as to whether or not there should be a fixed percentage applicable to each and every item. It was pointed out with some justification that the Claimants’ experts have done a great deal of detailed analysis and inspection of the building and resolved upon what are appropriate remedial schemes. Mr Nutland has produced very detailed quantities for the appropriate remedial works. Therefore, I agree with Mr Molsom and Mr Byford at least in a broad sense that the risks and the need for professional involvement are somewhat less than might have been the case if the detailed analysis and remedial schemes had not been already been done and produced. That said, I do not necessarily agree with the percentages adopted by them but I do consider that one needs to look at each item to determine what the appropriate contingency and consultants fees “add-ons” are, because they are susceptible to individual assessments.

So far as preliminaries are concerned, there is a wide difference between the experts. The pricing book, Spons, identifies a current figure of between 10 and 13% on the basic construction cost but this is based on a statistical analysis of commercial tenders in which inevitably there will have been a wide range of preliminary costs. What Mr Nutland has tried to do is to come to a general judgment as to what he thinks the percentage might be; he considers that remedial works within areas of residential occupancy will put the percentage up to between 15% and 25%; he selects 23%, at the higher end of this range, because liability and the full scope of remedial works has not yet been determined. Mr Molsom’s approach is relatively dismissive of Mr Nutland’s and he bases his 10% at the lower end of the range and industry average. Mr Byford bases his approach on the Spons’ allowances, and assumes that the works will be procured as a single overall main contract; he takes out of the Spons allowances for scaffolding which is usually allowed for within preliminary costs because the scaffolding has been priced separately (within the roof related works.

I consider that it is fair to proceed on the basis that the remedial work contract will be let through one main contractor (with separate sub-contract trades being retained by the main contractor) and that the main scaffolding will be paid for within the remedial work costs for the roofs. However, some additional scaffolding will be required because, in logic, given the very narrow corridors within the building overall, most of the removal of debris or kitchens and the like during the remedial work would best be done from the upper floors by scaffolding and hoists and the like which is not currently priced for. I agree with Mr Nutland that the Spons allowance needs to be adjusted upwards to reflect the fact that the works, based as they will be in at least six individual flats and over many parts of the building which will still continue to be occupied by many tenants, will require close and sensible supervision to accommodate this factor and to ensure that the same problems do not happen again. Overall taking into account all that the quantum experts have said, I consider that a proper percentage allowance for site establishment, preliminaries, overhead and profit is 17.5%.

I will now turn to each item to review what should be allowed for contingency and professional fees. In the case of contingency, it is necessary to have regard to the unknown but predictable type of problems which will be uncovered particularly when known defects are opened up; a contingency is justified not only to allow for those but also for tendering contractors’ uncertainty when pricing for what will be seen as a problem building. So far as professional fees are concerned, it is right to have regard to the likely and reasonable amount of design and supervision input required from consultants. I will only address the items against which I have allowed a basic cost:

The additions to the basic costs allowed above produce the following figures, with the asterisked items being for work to the common parts:

The asterisked items total £225,142.51 and they all relate to matters which can be considered to be the common parts of the building overall, including external drainage and are the subject matter of breaches of the "repairing" covenant. To be fair to Optima, it has accepted liability for a significant proportion of the items of work which this sum represents. Initially, the Claimants wished to claim specific performance against Optima so as to secure by court order that these requisite remedial works were carried out by Optima. There does however appear to be a genuine difficulty in the Court ordering specific performance in circumstances in which Optima itself no longer has any direct say in the management of the building. FBA is the Receiver and Manager appointed under the requisite legislation to perform this role and there is no cause of action as between the Claimants and FBA. This difficulty is recognised by the Claimants who no longer pursue specific performance but seek damages in its place.

Optima argues however that specific performance should be awarded to require them to procure the carrying out of the required remedial works albeit through the auspices of FBA. As an order for specific performance or the award of damages in lieu is discretionary, I would decline any order for specific performance on the following grounds:

So far as damages in lieu of specific performance are concerned, the Claimants should be put in a position in which they would be if effective specific performance could be ordered. Whilst I can and do accept that each of the Claimants should not be entitled to an award of damages in the sum of £225,142.51 for the common parts type work, a Court of Equity can and should with its wide discretion procure an arrangement which is equivalent to specific performance. This arrangement is one which secures financially the means to enable the requisite remedial works to be carried out. That arrangement will and should be and involve, in my judgment, the setting up of a trust account, possibly with the Claimants’ solicitors, with the damages awardable against Optima to be used to pay for the requisite remedial works which are to be facilitated by FBA and Optima. The arrangement will need to be underpinned by conditions:

There has been what is likely to prove a sterile argument as to whether individual Claimants have a sufficient interest in what I have called the "common parts" damages. This stems from a line of authority relied upon by Optima’s Counsel and in particular the House of Lords decision in Alfred McAlpine Construction Ltd v Panatown Ltd [2000] UKHL 43 which involve what some call exceptions to the general principle that a claimant may only recover damages for a loss which it has suffered. Reference was also made to the TCC decision in Bovis Lend Lease Ltd v RD Fire Protection Ltd [2003] EWHC 939 TCC which considered these authorities. In my view, these cases are of general interest and importance but not directly on point. Long leaseholders, to whom a developer landlord owes duties to build the whole development properly in the first place as well as then to repair and renew as necessary during the period of the lease, must be entitled to sue for the cost of putting right defects attributable to the original development work being constructed in breach of the building obligation and, unless specific performance is ordered, to recover damages in lieu thereof. Common sense and logic suggest that, where for instance a roof is so badly constructed that rainwater directly leaks into leaseholders’ flats or where a sewerage system is so badly constructed that it represents a health and safety risk to occupants, the leaseholders must be entitled to damages to enable the requisite remedial or renewal works to be carried out or to obtain relief at the very least which ensures that such work is done.

In the context of this case, the defects fall in to arguably two categories, one relating to defects within that which has been demised to the Claimants and the other relating to defects to the common parts in effect retained by the landlord developer. If the defects within the first category amount to breaches of Clause 3.1 of the Sale Agreements, the Claimants must be entitled at least in this case to recover the reasonable cost of reinstatement or other effective remedial works; it then matters not that the defects are also covered by the "repairing" covenant. If the defects under the first category only fall within the "repairing" covenant, then the Claimants are entitled in this case to damages in lieu of specific performance. An example of this would be the deflecting floors in Mr and Mrs Peace’s and Mr and Mrs Sahi’s flats, they having no Clause 3.1 to rely upon; then questions of paying for this through the service charge arrangements arise. So far as the defects in the second category are concerned, similar considerations apply in relation to defects which are covered by the "repairing" covenant alone. However, where such defects also involve breach of Clause 3.1, there is no reason in principle why the relevant Claimants could not recover damages relating to the cost of reinstatement. It is not necessary to work out in this case how damages in relation to each such Claimant would be quantified because it is accepted, sensibly and pragmatically, that such damages can and should be paid into an appropriate trust account set up to fund and facilitate the cost of the requisite remedial work.

There are some individual loss claims made by all the Claimants except Mr Hunt and Ms Ransome to which I will now turn;

It is necessary to move on to what damages the Claimants are entitled to as against S&P. It is largely agreed that capital diminution as at the date of purchase is the appropriate measure of damage. The complication relates to the defects to the common parts (for instance, roof and drainage) because, obviously, the cost of the remedial works can not in full be attributed to each of the Claimants. The most sensible and reasonable solution is to attribute one 26th to each Claimant as representing his or her share of the overall cost of such remedial work. This proportion is the same as each long leaseholder’s share of or contribution to the overall service charge. This is also the approach broadly adopted by the single joint valuation expert, Mr Swinley. The remedial work cost for those items for which S&P is liable is (roofs, guttering, car park drain, surface water drainage, external foul drainage and foul drainage under building) totals £206,621.50, of which 1/26 is £7,947, these costs being assessed at a level of pricing current in the first quarter of 2013. At the time that Ms Ransome and Ms Wyatt acquired their flats, there were only 20 tenants contributing to the Service Charge, albeit that by about April 2004 when Mr Hunt acquired his flat, that number had moved to 26. Therefore in relation to Ms Ransome and Ms Wyatt, the appropriate proportion is 1/20, namely £10,331.08.

Mr Swinley proceeds on the assumption that there is a correlation between the cost of any given repair and the loss of value and that, save in respect of the acoustic problems, the deflecting floors and the conservatory, this is a reasonable basis for the assumption. Thus, for a defect which will cost £3,000 to repair, there should be a direct and corresponding adjustment to the purchase price. However, he says that if several defects exist such that the aggregate cost of remedying those defects rises to above £5,000 then an additional allowance needs to be made such that:

He excludes the acoustic and deflecting floors problems from this construction cost related approach because, he believes, the remedial work costs are disproportionate to the loss of value caused by these defects and because whilst these defects might be off-putting for some individuals they might be tolerable to others and, accordingly, the market would not produce lower valuations by reference to the full cost of the remedial works. He therefore proceeds on the basis that for the Third and Fourth, and the Sixth and the Seventh and Eighth Claimants, a reduction of 12.5% should reflect the diminution in value attributable to these defects, a reduction of 7.5% in relation to the Second and Fifth Claimants whose properties are on the ground floor (and are not affected by the deflecting floor problems) and a reduction of 15% in relation to the First Claimant in relation to Penthouse 1. He suggests that in relation to the conservatory to Flat 1 an alternative approach to minimise her loss would be to remove the conservatory refunding Ms Ransome the cost of the conservatory and its removal and making good of the garden area but this is, wrongly, predicated on the basis that the conservatory was not part of the property purchased by her in September 2003; however, the added value of the conservatory was not included in the purchase price. Alternatively he suggests the reconstruction cost approach deployed by him generally.

Mr Swinley also said in response to written questions that if the Court was to find that the acoustic and deflecting floors defects could not be allowed to remain unremedied, then the costs of remedying these items should be added to the aggregated totals” set out at Paragraph 247 above. This would mean evidence that in relation to Ms Wyatt the capital diminution for her flat would be twice the cost of the remedial work, nearly some £219,000 (which is more than what she paid for it); in addition, as appears below, a further £20,500 would be the capital loss associated with the other defects. I am highly sceptical about this in relation to a flat which has been reasonably successfully let out for a number of years. I do not accept that these defects “could not be allowed to remain unremedied”; there is a difference between what Mr Swinley says and the fact that it is and would be reasonable for the Claimants to carry out these remedial works. I therefore consider that it would be wrong to base capital diminution damages on the full remedial work cost (doubled).

Broadly, I accept the evidence of Mr Swinley who was not called to give evidence orally and whose evidence was not challenged. There is one respect however which is troubling which relates to the Conservatory at Ms Ransome’s flat. The cost of the conservatory remedial work is just over £33,000 which on Mr Swinley’s costs related to value basis produces a capital diminution of £66,000 against a flat which assuming there was no conservatory and no other defects affecting it was otherwise worth £249,500. The cost of demolition on Mr Nutlands’ figures would be a little over £3,000. Allowing for some reinstatement of the ground, say £1,500, the value of the flat could have been restored (disregarding the other defects at the moment) for some £4,500. Against that, it is reasonable to assume that the addition of the conservatory added some value to what Ms Ransome paid for the flat. Accordingly, I have come to the view that a maximum capital diminution should be made up of this £4,500 sum plus what Ms Ransome paid for the conservatory and related works namely £3,000 and £9,600 for the ground and concrete work and the conservatory itself, producing a total of £17,100.

It is necessary to bring into the calculation for capital diminution the fact that construction costs were somewhat less in 2003 and 2004 than they were in the first quarter of 2013. Therefore, there need to be some reductions on the current remedial costs to bring them back to what they were at that time: reductions of 7% back to the third-quarter in 2003 to 2004, 6% reduction in the second quarter of 2004 and 3% in the fourth quarter of 2004.

It is then necessary to consider how this is translated into a capital diminution loss attributable to the negligence of S&P. I set out below in the table for each of the Claimants what the loss is:

I will summarise what each Claimant is entitled to by way of damages for breach of Clause 3.1, excluding the common parts damages as against Optima:

There is a claim for general damages by the Claimants and each gave written and oral evidence about to a greater or lesser degree how inconvenient and depressing it has been over many years to live in flats which contain the defects and in a building with serious faults, most of which have not been effectively addressed by Optima, if at all.

There was a pleaded assertion by S&P that the Claimants were contributorily negligent in not having an independent survey and not contacting S&P before purchase. This was not pursued with any vigour by Counsel for S&P, sensibly in my view; it did not feature in her closing submissions at all. Since it was not formally abandoned, I reject it. These were new flats in a new building which was supposed to have been inspected by a competent architect who was to certify that the property was satisfactory. All the purchasers were buying with a mortgage and their lenders were happy to lend them what they did. There was nothing to put them on notice that the flats were defective. Almost all the defects were hidden or, like the roofs, at least not readily accessible. There would in fact have been little or no point contacting S&P because Mr Egford would have said little more than what the Certificates said and because the prices agreed with Optima did not allow for him to liaise in that way with purchasers.

There are claims by each Claimant for general damages for inconvenience and discomfort. Each Claimant gave some evidence as to how it has been or each of the over the last 10 years. In Eiles v London Borough of Southwark [2006] EWHC 1411 (TCC), Mr Justice Ramsey confirmed in a tree root case that "modest but not generous” damages could be awarded for physical inconvenience and discomfort and mental suffering directly related to the matters complained of. He allowed £200 a year for the first five years of there being problems and £625 for the next two years where there was substantial disruption.

Most of the inconvenience and distress occurring here arose not only as the problems emerged but mostly out of the perceived inactivity of Optima. I find it difficult to see on the evidence that any inconvenience or distress has been or will be caused by the breaches of duty of S&P. The damage caused by S&P is the reduced capital value of the flats occurring by reason of defects which should have been picked up by S&P. S&P can not be criticised for failing to remedy any of the problems. The damages allowable against S&P are not as such for the cost of repairs which, when they will be carried out, will cause upheaval and inconvenience. I therefore propose to allow nothing for general damages against S&P.

In relation to Optima, the position is different. The results of their breaches of Clause 3.1 are that, first, the relevant Claimants suffered for a period of up to 9-10 years having to live in uncomfortable conditions, leaks being a regular and frequent problem, noise being an ever present problem, smells from sewage and deflecting floors, and, secondly, there will be serious inconvenience when the remedial works are carried out. Mr Bedwell has not lived in the premises since June 2007, Mr and Mrs Sahi since September 2010, Ms Ransome since October 2007 and Ms Wyatt has only lived at her flat between October 2003 to July 2004 and April 2008 to October 2009, their flats being rented out or occupied by others. The inconvenience and distress in their cases are mitigated by not actually living there for much of the time. The rents received have not been substantially less than the market rates. The position has been worsened by Optima’s failure to carry out the necessary work under its "repairing" covenants within a reasonable period.

Fair and modest allowances for general damages are as follows;

There is also a claim (at the back of the Scott Schedule) for the costs and losses of and occasioned by the Claimants moving out during the currency of the remedial works at £25,000 per flat, being £5,000 for removal costs and £20,000 for alternative accommodation. Very little if any evidence was given by the individual Claimants as to what they will do when remedial works are done. For instance, it might be that the remedial works can be programmed so that Mr Hunt and Mr and Mrs Peace can take their holidays at the time with no alternative accommodation being required. The other four Claimants will of course not have to move out because they rent the premises out to tenants. It might be possible for the remedial works to be so planned that furniture can be moved around an individual flat whilst work is done in other rooms.

There was some expert evidence from Mr Nutland which suggested that the remedial works could take between nine and 10 weeks per flat. I have formed the view on all the evidence that that is much too pessimistic and there is no reason why well organised remedial works could not take 6 weeks to effect. He also gave some evidence that a flat could be available for rent at £242 per week which equates very broadly with the level of rent currently achieved by a number of the Claimants. I can and do except that there may have to be some furniture removal but there has been no evidence about the cost of that.

Mr and Mrs Sahi and Mr and Mrs Peace can have no claim for alternative accommodation or furniture removal because their complaint against Optima is such that if Optima had complied with its obligations under the "repairing" covenants, they or their tenant as the case may be would have had to have moved out in any event.

The other four Claimants are entitled to damages relating to the loss of use of their flats whilst the remedial works are going on. That can best be assessed by reference to the rental value which I assessed at £225 per week for all but Mr Hunt and £250 a week for his flat as the largest. These four Claimants therefore are entitled respectively to £1,350 for all bar Mr Hunt who is entitled to £1,500. In addition, I will assess a figure for each of them of £500 for furniture removal or for moving around furniture, producing an overall total of £1,850 and £2,000 respectively.

It has been accepted, properly, by all parties in this case that the Claimants who have all been successful against the Defendants, can not execute their judgments against both Optima and S&P to the extent that the judgment against each duplicates the judgment against the other. I can illustrate this in the following way. Ms Ransome has secured a judgment against Optima for some £81,100 in respect of the acoustic, deflecting floor, socket outlets, riser ducts and water leaks; she has also secured with the other Claimants a judgment for £225,142.51 in addition for the "common parts" defects, which is to be paid into a trust account to secure the execution of appropriate remedial works. If she enforces her judgment against Optima, she will have been wholly compensated in respect of everything for which she secured judgment also against S&P. If however she enforces against S&P and secures payment from it of the full amount (£52,390), she will have to give credit for that sum in what she enforces against Optima. If the “common parts" damages are paid into a trust account, the capital diminution damages against S&P will fall to be reduced by £7,926.00 and the appropriate percentage adjustment (150%) will need to be reduced to only 100%.

There will be judgment for the Claimants in the terms set out above. I will leave it to the parties to agree a form of wording. Given the scores and probably hundreds of different issues which this case has thrown up, I invite Counsel, without further argument, on reviewing the draft judgement to identify any possible issue which has not been addressed in the draft but which is thought needs to be addressed.

The judgments in favour of the Claimants will be: