HT-2023-000254 - [2024] EWHC 2063 (TCC)

This is an application by the Defendant insurer (“NHBC”) for summary judgment on, alternatively for the striking out of, the Claimant’s claim on the ground that it is time-barred. The issue on the application concerns when time started to run for the purposes of the six year limitation period under section 5 of the Limitation Act 1980.

The claim is made under policies of insurance by which NHBC agreed to insure Catalyst Housing Limited (“Catalyst”), to whose rights the Claimant (“Peabody”) has succeeded, against certain risks associated with the construction of 88 affordable/social housing units at the former RAF Stanbridge site in Bedfordshire (“the Policies”). Vantage Design & Build Limited (“Vantage”) was engaged as the contractor under an amended JCT Design & Build Contract 2011 dated 20 November 2015, pursuant to which 175 new dwellings (including the 88 social housing units) were to be built. The total contract sum was £23,878,482. The contract sum for the 88 insured units was £10,358,510 (the “Contract Price”).

Vantage commenced work on or around 14 December 2015 and ceased work on 17 June 2016. Administrators were appointed in respect of Vantage on 29 June 2016.

Following the administration of Vantage, pursuant to an amended JCT Construction Management Agreement 2011 dated 18 January 2017, Catalyst’s subsidiary CHL Developments Ltd engaged Stack London Ltd (“Stack”) to perform the role of Construction Manager in respect of the works, and participate in the procurement of individual Works Contracts, so as to complete the works. Practical completion of the relevant units occurred on 19 January 2021.

The terms of the Policies are set out in a document called “Buildmark Choice – Your warranty and insurance cover”. The relevant cover for present purposes appears under the heading “Option 1 - Insolvency cover before practical completion”. The detail of the terms is important and discussed below but, in very broad terms, the insured had the benefit of cover if it “ha[d] to pay more to complete [the units]” because of Vantage’s insolvency. It is common ground that the administration amounted to an event of insolvency under the terms of the Policies.

Peabody’s claim was issued on 24 July 2023. Its Particulars of Claim were subsequently served on 24 November 2023 claiming £913,555.36 plus interest. This is broken down in Schedule A to the Particulars of Claim as comprising (a) some £815,500 for extra costs said to have been incurred over and above what would have been paid to Vantage; (b) legal and other fees and expenses, totalling some £98,000, which includes a claim (to be pro-rated so as to relate to the 88 insured units) for “site security” costs in the total sum of £56,350.