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Site Security Costs
Site Security Costs
That leaves the site security costs, to which I referred at paragraph 38 above. NHBC submits that:
There is a separate head of indemnity available under the Policies for protecting the site. This is the cover at [D1], which appears as part of the “What we will do” text:
“… In addition, we will pay the cost of reasonable precautions to secure the work defined in the building contract against unauthorised entry, theft and vandalism until work resumes”.
There were trespassers on the site in 2016, and “site security” costs in the total sum of £56,350 (to which I have referred in paragraph 6 above) were incurred at the time in clearing them off. NHBC rely on a letter written by Catalyst dated 18 January 2018 (which I note incidentally refers to a potential claim under the Policies) in which it was stated that the site was secured immediately on Vantage’s administration by Catalyst and Silver, the employer’s agent; Vantage workers were found to be using overnight accommodation and a Court order was obtained to prevent this.
As appears from the Appendix to the Particulars of Claim, a claim is made for a pro-rata share of these costs, and perhaps other costs paid to Silver, which were incurred in around 2016.
Since those costs are time-barred, the whole claim under Option 1 is time-barred, on the basis that there is a unitary cause of action, i.e. a single claim for breach of contract.
In support of its case of a unitary cause of action, in the week following the hearing NHBC provided an extract from Colinvaux (paragraph C-0242) and sought to rely on Bann Carraig Ltd v Great Lakes Reinsurance UK plc [2021] NIQB 63, a decision of the High Court in Northern Ireland. The insurance in that case covered the insured in respect of physical damage to property including consequent business interruption caused by that damage. Having construed the policy wording, the Court found that the business interruption claim did not give rise to a freestanding cause of action, separate from the claim for physical damage; there was a single cause of action or claim for an indemnity which accrued when the insured peril occurred. The insured peril was physical damage, both for the physical damage claims and the consequent business interruption claim.
However, under Option 1, as I have already found, the insured peril under the main cover [B] is the ‘having to pay more’ to complete the units (or the loss of a payment made to the contractor). The cover at [D1], which is additional cover, is not triggered by either of those insured perils. It is additional cover which arises independently of those perils. It is unlike the business interruption cover for the consequences of physical damage which accrues at the time of that damage, as in Bann Carraig (supra). In my judgment, the additional cover [D1] is separate cover from the main claims. I therefore do not accept that, if any [D1] cover is time-barred, that means the main claim is time-barred.
As to whether the [D1] claim is time-barred, on the basis that the costs were incurred more than six years before the Claim Form, the Court is faced with the difficulty that, no doubt because this point did not appear as part of the Application or the evidence, Peabody did not address it either in its evidence or its skeleton argument. There is limited evidence about the costs in question. For example, the letter of 18 January 2018 relied upon by NHBC stated that the costs were incurred to secure the site and to remove squatters. But the detail of the costs was set out in Section E of the claim document, which is not in evidence.
Furthermore, Peabody submitted that the costs of removing squatters is not claimed under this additional cover [D1] at all (which it submits concerns preventative measures only) but forms part of the claim for extra costs incurred over and above those payable to Vantage. That does not appear to be the basis on which the claim is currently pleaded. However, if that is or will be in dispute as a matter of fact, as I apprehend it may be, I cannot resolve it on the evidence as it currently rests. In the circumstances, I am not satisfied on the current material that the claim for £56,000 odd (or part of it) is time-barred. But if it is, for the reasons I have explained, that does not mean that the main claim is time-barred; and if it turns out at trial that the £56,000 claim is time-barred it will not have taken undue time and expense for that to be resolved, as part of the wider issues. NHBC did not request a ruling that this part of the claim be struck out, save as a stepping stone for its attack on the main claim brought under [B].
For completeness, Mr Casey also submitted (in written submissions after the hearing) that to the extent that there was a claim for the cost of preventative measures (under the additional cover), which was separate from the main claim for the extra costs to complete the units, the costs identified would be mitigation costs. In Euro Pools Plc v Royal and Sun Alliance Insurance Plc [2018] EWHC 46, such costs were treated as giving rise to a separate cause of action and were treated as time-barred notwithstanding the fact that the principal claim for an indemnity was within time: see [144-147]. This may well be reasonably arguable, but in circumstances where I did not have NHBC’s submissions on this point, and it was raised after the hearing (understandably, given that it was a response to NHBC’s post-hearing submissions), I decline to rule on this. For the reasons set out above, it is not necessary for me to do so.