HT-2022-000311 & HT-2022-000254 - [2024] EWHC 3179 (TCC)

In the Particulars of Claim at paragraph 69, and the many breaches alleged having been set out, it was averred that:

“The aforesaid acts, omissions and defaults amount to a breach of section 2A of the Defective Premises Act 1972 (“DPA”), insofar as neither the Rooftop Flat Works nor the Defendants’ attempts at remedying the same or drying out the Property were done in a workmanlike or professional manner with proper materials.”

The reference to the aforesaid acts, omissions and defaults appeared, therefore, to be a reference to any and all of the breaches set out in the 29 sub-paragraphs and their sub-sub-paragraphs.

On that basis, that is breach of the duty owed under section 2A of the DPA, the claimant leaseholders sought to recover losses which arose from Click St Andrews’ breaches which were expected to be not less than those “set out elsewhere” in the Particulars of Claim. The other paragraphs referred to were those setting out the cost of remedial works (as then estimated) and the extent of the leaseholders’ individual claims. The claimant leaseholders further sought a Building Liability Order pursuant to section 130 of the Building Safety Act 2022 in respect of Click St Andrews’ liability under the DPA.

Section 130 (Building Liability Orders) provides:

“(1)

The High Court may make a building liability order if it considers it just and equitable to do so.

(2)

A “building liability order” is an order providing that any relevant liability (or any relevant liability of a specified description) of a body corporate (“the original body”) relating to a specified building is also—

(a)

a liability of a specified body corporate, or

(b)

a joint and several liability of two or more specified bodies corporate.

(3)

In this section “relevant liability” means a liability (whether arising before or after commencement) that is incurred—

(a)

under the Defective Premises Act 1972 or section 38 of the Building Act 1984, or

(b)

as a result of a building safety risk.

Section 2A of the DPA provides:

The purpose of the section was principally to provide for duties to be owed to the individual owners of flats who did not otherwise fall within the definition of persons to whom a duty was owed under section 1 in respect of work taken on for or in connection with the provision of a dwelling. This section came into force on 28 June 2022 and it follows, and was accepted by the leaseholder claimants, that no relevant duty was owed to them before that date. What also follows is that no duty was owed in respect of the carrying out of the Works as defined in the FPA and any duty could only be owed in respect of any work that was done after that date which was limited to such attempts as there were at remedial works.

I observe also that the duty owed under section 2A is not, as would appear from the pleaded case, one to see that the work is done in a workmanlike or (as the case may be) professional manner and with proper materials. The section continues “and so that as regards the work the dwelling is fit for habitation when completed.” It is well-established that the duty owed under section 1, which is in the same terms, is a single duty to see that the outcome is that the dwelling is fit for habitation. Lack of fitness for habitation is correspondingly a necessary element of breach of that duty. I can see no reason why the duty owed in section 2A of the DPA should not be characterised in the same way.

I address this case below but I raised these issues with counsel in the course of opening submissions and, in particular, the absence of any identification of any particular breach of the duty owed under this section. As I have already said, paragraph 69 of the Particulars of Claim referred to all alleged breaches the vast majority of which occurred at a time when section 2A was not in force and no duty under that section was owed. There was no specific identification of breaches of the duty under section 2A. There were two general allegations of failure to undertake the drying out with reasonable skill and care and failing to plan and implement the drying out with reasonable skill and care, alleged breaches which may or may not have occurred after the section came into force.

It was only in respect of breaches of the duty under section 2A, if they could be identified and if they were made out, that the claimants might ask the court to make a Building Liability Order (“BLO”). Consideration was, therefore, given to the claimants’ case and Mr Levenstein indicated there was a further matter which might give rise to a claim for a BLO under section 130(3)(b) of the Building Safety Act 2022, namely the breaches relating to structure and fire which, it was at least open to the claimants to argue, gave rise to a building safety risk as defined in section 130(6) as “a risk to the safety of people in or about the building arising from the spread of fire or structural failure”.

That did not form part of the leaseholder claimants’ pleaded case but a short amendment was formulated to capture that claim and an application was made to amend. Although that application was made late in the day, I allowed the amendment for the reasons I gave at the time. Accordingly, there is now a claim advanced in these proceedings for a BLO on this further basis. The body against whom the BLO is sought remains unspecified in the Amended Particulars of Claim.

It is clear from counsel’s submissions, however, that the leaseholders will seek a BLO against Click Group Holdings as an associated company (section 131). That may be of limited benefit given the nature of Click Group Holdings financial position as it appeared to be and was addressed at the time the freezing injunction was continued against Click St Andrews only but that is not a reason for the application not to be pursued. The claimants have not to date identified any other corporate body against which such an order might be sought. That is in no way a criticism and in no way impacts on any application for a BLO that may be made. The Building Safety Act 2022 says little about the procedure to be adopted by a party wishing to seek a BLO but it certainly does not require a party to make that claim within existing proceedings. It would be surprising if it did since the circumstances in which it might be just and equitable to make the order may not arise until after proceedings to establish a relevant liability are concluded and a BLO could be sought against a corporate body that did not even exist at the time of those proceedings. Where it is already in contemplation that an order will be sought against a particular associated company, it seems to me sensible and efficient for that claim to form part of what might be called the main proceedings, as is, in effect, the case here. But that does not preclude a subsequent claim for a BLO against some other associated company.

At the conclusion of the trial, I made it clear that I would address in judgment the matters which went to whether there was a relevant liability but not the making of the BLO itself which would be a matter for a further hearing. That was, in particular, to guard against the possibility that the order would be sought against a company other than Click Group Holdings and to give Click Group Holdings a proper opportunity, in any event, to address the issue of whether it would be just and equitable to make such an order against the background of the judgment.