Rendlesham Estates plc & Others v Barr Ltd

[2014] EWHC 3968 (TCC)

This was a claim by the owners of 120 flats in two apartment blocks against Barr who built the development for CWC. The stated object of the development was to provide high quality apartments for young professionals. The original tenders came in over budget and as a result significant reductions were made in the quality of the finishes. The project did not go smoothly. Barr had problems with many of its subcontractors. Many of the residents found that when, or soon after, they moved in, the intercom system did not work properly and that there was flooding and damp. Within two or three years numerous additional problems had begun to appear. Some of those defects were within individual apartments, while others were in common parts.

CWC went into administration in 2008. As a result and with the owners having no contract with Barr, the Claimants brought an action under the Defective Premises Act 1972 (“the DPA”), alleging that their flats were not fit for habitation. Barr conceded liability for some of the defects but disputed the appropriate measure of damages. Key to the case was section 1 of the DPA, which states:

“A person taking on work for or in connection with the provision of a dwelling (whether the dwelling is provided by the erection or by the conversion or enlargement of a building) owes a duty...

...to see that the work which he takes on is done in a workmanlike or, as the case may be, professional manner, with proper materials and so that as regards that work the dwelling will be fit for habitation when completed.”

Mr Justice Edwards-Stuart noted that each case would be fact specific. Proof was required in relation to each individual flat as no two owners had the same interest. This meant that the claim could not be pursued as a representative action. That said, the Judge identified the following principles for determining liability:

(i) Each individual flat, together with its balcony, constituted a separate dwelling within the meaning of the DPA;
(ii) The common parts and the basement car park did not form part of any particular dwelling. However, the construction of the common parts and the basement car park constituted work carried out for or in connection with the provision of a dwelling (namely, each flat) so that the duty imposed by section 1 of the Act applied;
(iii) When considering whether a flat is fit for habitation, its condition is to be considered at the date when the work was completed (i.e. the end of any relevant defects liability period);
(iv) The defects in any particular flat must be considered as a whole;
(v) The flat must be fit for habitation by all the types of person who might reasonably be expected to occupy it, including babies and those who suffer from common conditions such as asthma;
(vi) Whether or not a flat is fit for habitation is to be judged by reference to the standards current at the time when it was built;
(vii) If, at the time of completion, the state of a flat is such that a local authority with knowledge of its condition would not approve it as fit for occupation under the Building Regulations, it is probably unfit for habitation;
(viii) The fact that a particular defect which renders a flat unfit for habitation could be remedied at relatively modest cost, does not of itself mean that there is no breach of duty under section 1. That is relevant only to the measure of damages;
(ix) A defect may render a flat unfit for habitation even though both the owner and the builder were unaware of its existence at the time: for example, defective foundations;
(x) A state of affairs that arises only because the owner has not carried out maintenance that a building owner would reasonably be expected to carry out does not mean that the flat was unfit for habitation when completed. However, if the need to remedy the defect would render normal maintenance abortive, the failure to carry out maintenance is unlikely to negate the breach of duty.
(xi) Serious inconvenience may make a dwelling unfit for habitation. For example, a lift in a tower block that was poorly installed so that it frequently broke down could make flats on the higher floors unfit for habitation;
(xii) A risk of failure within the design life of the building of a structural element of the dwelling, which exists at the date of completion (whether known about or not), may make the dwelling unfit for habitation.
(xiii) Evidence of a need to vacate the dwelling in order to carry out work necessary to remedy work that was done in breach of the standard set by section 1 of the DPA, is relevant to the question of fitness for habitation.

On the facts, the Judge found that each flat was unfit for habitation due to a variety of defects to the common parts and the individual apartments. Therefore the Claimants were entitled to the costs of rectifying the applicable defects. Further, a leaseholder’s loss in respect of a defect in the common parts was not limited to his proportion of the service charge covering the repairs. The owner of a flat that was unfit for habitation by a defect in the common parts was entitled to the cost of repairing that defect, albeit that the cost of such repairs could rightly only be enforced once, as only one repair was needed. Finally, the Claimants were entitled to a sum representing the blight on the value of apartments where remedial works were undertaken as well as damages for distress and inconvenience.

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