Citation: [2024] EWHC 251 (TCC)
The First Defendant, CIL, engaged RGB and Stroma for works on a property later purchased by the Claimant WOL. CIL applied to strike out the case against it on the basis of its own particular interpretation of the sale agreement. The Court dismissed the application, and held that WOL’s case was arguable and the existence of the collateral warranties did not restrict CIL’s liability. Background
- The first defendant (Croydon) was an investment company. In 2015, it engaged the second defendant company (RGB) to carry out works at an office in Croydon, and engaged the third defendant (Stroma) to be an approved inspector under the Building Regulations.
- In 2019, the claimant company (WOL) agreed to purchase the property from Croydon via a sale and purchase agreement (the SPA). A dispute arose as to the condition of the property and WOL commenced proceedings against (i) Croydon, for breach of the SPA, (ii) RGB, under its collateral warranty for breach of the building contract and under s.1 DPA 1972, and (iii) Stroma, under its collateral warranty for breach of its appointment.
- Croydon applied to strike out WOL’s Particulars of Claim on the basis that it disclosed no reasonable grounds for bringing the claim. Alternatively, Croydon sought summary judgment on the basis that WOL had no real prospect of succeeding on its claim.
Decision
- The first issue was whether, on the true construction of the SPA, Croydon was not liable to WOL insofar as the rectification costs of the defects in the property was within its collateral warranties with RGB and Stroma. The Court held that WOL had an arguable case that the existence of the collateral warranties did not restrict the scope of Croydon’s liability in the event that RGB did not remedy the defects in the property.
- The second issue was whether, on the true construction of the SPA, Croydon’s liability was limited to rectification of snagging defects or the like, and not the substantial latent defects alleged by WOL in the present action. The Court held that the definition of ‘defects’ within the SPA was arguably capable of encompassing all the defects alleged by WOL in the Particulars of Claim. Further, the court held that evidence was necessary to determine what the parties’ understanding as to the scope of defects would have been at the time of entering into the SPA. There was doubt about who had known what about the state of the property.
Representation
- Timothy Polli KC (Tanfield Chambers) and Peter Brogden (Keating Chambers) for the Claimant, instructed by Kingsley Napley. Dr Timothy Sampson (Lamb Chambers) for First Defendant, instructed by Hill Dickinson. Second Defendant not represented. Jennie Gillies (4 Pump Court) for Third Defendant, instructed by Beale & Co.
Full judgment https://www.bailii.org/ew/cases/EWHC/TCC/2024/251.html
