CA-2024-002563 - [2025] EWCA Civ 932

Catalyst Housing Limited (“Catalyst”) engaged Vantage Design and Build Limited (“Vantage”), pursuant to a JCT Design and Build Contract dated 20 November 2015, to build 175 new dwellings at the former RAF Stanbridge site at Bedfordshire. This included 88 social housing units. The total contract sum was almost £23.8 million, of which the cost attributable to the 88 social housing units was £10.3 million.

The insurance policy with the NHBC was dated 2 March 2016. It related solely to the 88 social housing units.

Vantage commenced work on or around 14 December 2015. They ceased work on 17 June 2016 and administrators were appointed on 29 June 2016. It is common ground that the appointment of the administrators meant that, pursuant to the policy of insurance, Vantage were insolvent within the relevant definition. Squatters moved onto the site and the documents suggest that over the autumn and winter of 2016/2017, Catalyst spent some £56,350 on site security.

Following the administration of Vantage, in late 2016/early 2017, Catalyst’s subsidiary CHL Developments Limited engaged Stack London Limited (“Stack”) to perform the role of construction manager and to procure the individual trade contracts so as to complete the works. The trade contracts would be between CHL and the trade contractors.

At the same time, on 7 December 2016, Catalyst informed the NHBC that “Catalyst intend to claim via the insolvency cover for additional costs in relation to the first registered units.” No figures were given. However, on 10 February 2017, Catalyst wrote again to the NHBC identifying the costs forecast from the Stack management contract and saying:

“So the additional costs on the insured units is approximately £1,358,000, more than the max 10% claim. However this is based on build cost only and we also have a lot of additional fees, abortive works costs, legal costs, payments to Vantage post administration etc.”

The project cost plan referred to in the construction management contract between CHL and Stack identified a forecast final cost of £25.6 million, about £1.8 million higher than the Vantage contract sum. In addition, Stack were entitled to a construction management fee of over £1 million, which may also have been additional to the sums that would have been payable to Vantage (there is a dispute about that).

Practical Completion of the relevant units occurred on 19 January 2021. The final cost of the 88 units was some £11.3 million.

Thereafter, there was a good deal of correspondence between the NHBC and Catalyst in respect of this claim. In June 2023, Catalyst merged with Peabody, who took over the management of the claim. In Peabody’s skeleton argument, it is noted that, during this correspondence, the NHBC did not take the point as to the accrual of the cause of action until more than six years from the date of the insolvency (which was 29 June 2022), and there is a hint that NHBC may have misled Peabody during this period by regularly seeking further information as to the additional costs incurred. However, although a plea of estoppel was originally put forward by Peabody, that was expressly abandoned in advance of the hearing before the judge. In those circumstances, it seems to me that, save for one tangential point identified in paragraph 60 below, the correspondence between the parties is of no relevance to the construction issue at the heart of this appeal.