Naylor & Ors v Roamquest Ltd

[2021] EWHC 567 (TCC)

This claim arose out of a mixed residential and commercial development, of eleven tower blocks, in Greenwich, London. The Claimants were some of the leasehold owners of one or more of the flats in six of the tower blocks. The First Defendant was the developer and freehold owner of the property. The Second Defendant carried out the design and construction of the development. The Claimants were not making a claim in respect of the cladding replacement works to the extent that they had been accepted by the NHBC. However, they sought damages in respect of their uninsured losses, including diminution in value and additional remedial works costs outside NHBC cover, alleging the NHBC repairs would be insufficient.

The first problem for the Claimants was that, as the Judge explained, “contrary to good practice”, the allegations of defects were not based on inspections or opening up works carried out by appropriately qualified experts and the subject of an expert report.  The claim was said to be speculative as no specifics of those alleged additional defects had been provided. The pleading was based on a suspicion that the remedial works would prove to be inadequate. It did not provide particulars of specific, identified defects, or their location and extent. 

In part this may have been because the Defendants had failed to disclose documents that would assist in ascertaining whether there were additional defects that would not be addressed adequately by the remedial works.  However, this did not absolve the Claimants from using appropriate experts to identify defects and/or remedial work and put forward a positive case that some elements of the installation were non-compliant. The burden should not lie with the Defendants to identify whether the defects in fact existed. The Judge was, however, prepared to give the Claimants an opportunity to correct the deficiencies by amendment.  

If the Claimants established the existence of defects in the tower blocks, amounting to a breach of contract and/or statutory duty by the Defendants, as a matter of principle, it would be open to them to claim substantial damages based on the diminution in value of their properties assessed as the reasonable cost of reinstatement. 

Mrs Justice O’Farrell confirmed the tenants had sufficient standing to bring the claim, but that entitlement to damages would depend on whether they could demonstrate the works were reasonable and proportionate. Specifically, the ability of each of the Claimants to recover as damages the cost of carrying out any part of the remedial works would depend on whether they could show that the specific works were reasonable and proportionate to remedy the breach in question. All of which led back to the need to amend the claim and provide the detail necessary for the Defendants to understand the case being brought against them. 

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