HT-2022-000092 - [2024] EWHC 3184 (TCC)

In these proceedings the Claimant property developers (“Darcliffe”) claim damages for professional negligence from two defendants for, broadly speaking, erroneous advice as to their ground investigation of a proposed development of an area of land at Stoneham Farm, Tilehurst, Long Lane, near Reading (“the Site”). The First Defendant (“Glanville”) and the Second Defendant (“GWL”) are engineering companies that, among other things, produce reports on ground conditions.

The trial was heard over four days in October 2024, with closing submissions delivered on 22 November. The trial had been limited by earlier directions to an agreed list of issues. It was further limited by the fact that, before the trial started, both Darcliffe and Glanville settled all their claims against GWL. The trial thus proceeded against Glanville only. I was, therefore, required to answer Issues 1 – 8, 18 and 21 – 22.

The principals of Darcliffe, Messrs Denton and Smith, are very experienced in developing sites for the construction of residential homes. They gave evidence before me. I am satisfied from their evidence and the accounts of the company that Darcliffe is a well and prudently run business.

As a matter of background, it should be noted that Mr Denton, one of the joint Managing Directors of Darcliffe, became aware of the Site at a meeting with Mr Mike Rolls of Horstonbridge Thames Valley Limited (“Horstonbridge”), at some point in 2013. Horstonbridge had an option to purchase the Site and three other sites nearby, known as Sulham 1, 2 and 3. In 2014, Darcliffe acquired Horstonbridge’s options over the Site via a development agreement. This agreement set a minimum price for the Site, which Darcliffe wished to develop.

In May 2014, Darcliffe engaged Glanville to provide a report. Glanville’s report (“Glanville’s First Report”) was issued to Darcliffe in its final form on 24 July 2014.

Darcliffe promoted the inclusion of the Site in the local plan for the West Berkshire site allocation during the course of 2015. Glanville’s First Report was one of the documents used to promote the Site.

In February 2016, Darcliffe asked Glanville to produce an updated report. Glanville produced the final version of their updated report (“Glanville’s Second Report”) on or around 29 April 2016. This was, in substance, the same as Glanville’s First Report.

An application for planning permission was submitted on 4 May 2016. A Public Inquiry took place in 2016. Planning permission for the construction of 66 homes was granted, subject to reserved matters and legal agreements, on 1 December 2016.

On 6 September 2017, Matthew Jeal sent an email on behalf of Darcliffe to GWL asking them to produce a Phase 2 intrusive site investigation for the Site. GWL issued a quotation on 5 November 2017. On 6 November 2017, Mr Jeal wrote to GWL confirming their appointment.

GWL undertook site investigation works at the Site between 9 and 16 November 2017. These involved various investigations, including drilling two cable percussion boreholes to depths of between 18m and 19.95m below ground level. GWL circulated a preliminary draft of their Phase 2 Report on 30 November 2017. The final version of the Phase 2 Report was then produced in or around January 2018.

GWL carried out additional investigation works between 11 and 14 July 2018, and the results of those investigations were set out in a letter from GWL to Darcliffe dated 16 July 2018.

Darcliffe were notified that reserved matters under the planning permission were approved on 27 June 2019. Formal approval was received on 15 August 2019.

In November 2019, Darcliffe purchased the Site for circa £5m in order to build the housing development.

Darcliffe say that they relied upon the reports of Glanville and GWL when purchasing the Site. They allege that Glanville and GWL failed to report to Darcliffe that the Site was at high risk of ground dissolution due to the presence of chalk beneath the Site. They further allege that, after purchasing the Site, it was discovered that it is affected by widespread chalk dissolution, and that they have had to incur substantial remediation costs when constructing the development. They claim damages of c.£7.5m for negligence and breach of contract.

This trial is not concerned with quantum, although it is common ground that Darcliffe will have to give credit as against Glanville for the sums recovered in the settlement with GWL.

Against that background, this Judgment consists of the following sections: