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

As I referred to above, shortly before trial, permission was given to the claimants to serve an updated schedule of loss. The schedule continued to separate out RTM losses which related to the building as a whole and leaseholder losses which related to individual flats. However, advertising the way the case was opened and the argument relating to the entitlement to recover, the schedule stated that RTM and the leaseholders shared a common interest in repairing the property and shared the entitlement to recovery of the losses pleaded.

I deal first with what I shall still call the RTM losses relating to the remedial works required to the building as a whole. For the avoidance of doubt, however, in terms of what I award to the claimants I make no distinction between RTM and the leaseholders for the reasons I have already given.

In summary, in terms of the cost of remedial works, the claimants relied on the report dated 8 December 2023 of David Daly, a chartered quantity surveyor; a tender appraisal dated 30 January 2023 produced with Buildsmith Solutions and JPD Corporation; and an updated breakdown and documents from the leaseholders of flats 11, 12 and 13. This created an unconventional position in which there was both a report from an expert whose evidence the claimants had permission to call and from a different quantity surveyor who said that he was making a true market appraisal based on a single tender return but who was not to give evidence. Mr Daly, however, then considered the JPD Corporation tender and made some adjustments to his figures (which were addressed in his Appendix 7) and, save as appears below, I accept Mr Daly’s figures and quantification.

So far as the structural works are concerned (incorporating the firestopping), Mr Daly’s total figure for measured works was £72,040.00. However, that includes £25,000 for investigation and possible works to the external lintels and assessment of the column capacity to the second floor. Although recommended by Mr Ebbatson, there is no evidence of any defect in these respects – Mr Daly says himself that it is not known if any remedial works will be required. I do not consider that there is a sufficient evidential basis on which to award this sum. Similarly, Mr Daly has noted that Mr Chick says work may be required to other beams and has included a further sum of £47,040.00. There is no evidential basis for me to award this sum to the claimants. It is speculation.

Mr Daly has costed the propping to support the grillage while works are carried out at £15,000 and I accept that figure.

Mr Daly assesses the cost of removing and replacing the ceilings and other finishes on the third and fourth floors at £13,600 per floor and I accept that figure.

Mr Daly also included the cost of 8 weeks preliminaries at £6,863.50 per week. In his report, he explained that he had costed this distinctly from the interior fit out works. In his Appendix 7, this distinction appears to have gone but a lower figure per week (£6,101) is included to reflect economies of scale if the works are carried out over a longer period. Added to this figure, however, is a 5% uplift for contingencies and a 5% addition for professional fees. In my view, the contingency is already allowed for in the longer period for the carrying out of remedial works. The uplift for professional fees is a matter which Mr Daly added after considering the JPD tender which included a lump sum of £75,000 for professional fees. Although the claimants already have the benefit of experts’ reports, it seems to me that these are the sort of works which will require professional design and supervision and that that additional percentage is appropriate. As it involves no further evidence, I will invite the claimants to provide me at the hearing in respect of consequential matters with the calculated cost of preliminaries and professional fees (including VAT) which will form part of the final order as to damages payable.

In respect of decant costs for flats 11, 12 and 13, the owners of which are claimants in the litigation, Mr Daly in his report allowed £18,000 per flat over a 10 week period. The owners are still not in fact in occupation and will not need, strictly speaking, to decant, but they still require alternative accommodation and/or lose the rental income they would otherwise have. The “decant costs” can, it seems to me, be treated as an equivalent. Again, Mr Daly has in his Appendix 7 put forward a slightly lower figure of £800 per flat per week uplifted by 5% for contingencies and 5% for professional fees. As with the preliminaries costs, it seems to me that the contingency is already allowed for in the increased period and, in this case, I can see no reason for a percentage for professional fees as well. Therefore, the cost that I allow will be £31,200 per flat, totalling £93,600.

There are a number of what I have called miscellaneous defects in respect of which I have not found in the claimants’ favour. The cost of remedying these defects is not, therefore, recoverable. However, the identification of the remedial works and quantification has not been approached in a way that enables these to be stripped out. In fact, having regard to Mr Chick’s evidence, it seems to me that no claims are made in respect of these items and, if they are, they are simply subsumed within the works to remedy the more serious defects.

Mr Daly was instructed to cost the replacement of the roof. There is very little detail of the proposed replacement, save that Mr Daly allows for a roof covering based on a Trocal Sika membrane system from which I infer that the proposal is to replace the roof with similar but without the workmanship defects that Mr Rivett has identified. The total cost is £134,248.04 which I award to the claimants.

So far as further remedial works following the water ingress are concerned, Mr Daly has considered (i) the remedial works to address the schedules of defects to flats 1 and flats 5 to 9 prepared by Mr Rivett and (ii) a total refurbishment of flats 11 to 13. I should say that, in the course of the proceedings, I raised a specific query as to where Mr Daly had set out the scope of the remedial works he was costing. In answer to that query, he drew my attention to the Appendix to his report which contains in an Excel spreadsheet a detailed analysis of the remedial works and their cost. There was no challenge to this evidence other than the argument as to mitigation which I address below. It follows that it is unnecessary, and indeed impractical, for me to recite the content of the Excel spreadsheet and that, in the circumstances, I accept Mr Daly’s assessments.

Mr Daly’s total figures are set out in his report as follows:

Professional fees at 5% should also be added to these figures. In his report, Mr Daly also included a figure for preliminaries because he had drawn a distinction between the structural and the interior remedial works. As I have said, that distinction has gone and the longer period of remedial works accounts for all works so that no separate amount should be included.

I turn next to the costs that have already been incurred and other damages claimed. These are essentially the leaseholders’ claims but also advanced by RTM for the reasons set out above.

In his report, Mr Daly undertook an exercise in relation to each flat/ leaseholder claimant in which, in summary, he compared the sums set out in the Appendix to the Particulars of Claim, the (greater) sums claimed in witness statements and the available documentary evidence to support the claims. He identified inconsistencies between the Particulars of Claims and the available evidence and set out his own assessment, excluding, for example, claims for legal fees which fall to be dealt with as costs.

In the course of the trial, at my request I was provided with a table of losses by flat which gave the totals set out in the updated schedule of loss, references for the evidence that fed into those figures and the figure which Mr Daly had found substantiated or had assessed in his report. In due course, the leaseholders also gave evidence.

Mr Daly then produced his Appendix 7. In that Appendix he included a spreadsheet of leaseholder claims which were colour coded to show (i) in green substantiated costs (that is substantiated by documentary evidence); (ii) in red, costs for which there was evidence in a witness statement; (iii) in orange, items that were partially substantiated; and (iv) in yellow claims for legal costs and distress and inconvenience.