Mr. Justice Jack :
Introduction
- Number 4 Aragon Close, the Ridgeway, Enfield is a five-bedroomed, mock-Tudor house built in 1989 when it was purchased by Mr and Mrs Papworth. On Saturday, 11 January 1997 a frozen stop cock in the loft space under the roof thawed having previously burst. A large quantity of water was released and most of the interior of the house was affected. The house was insured with the Co-operative Insurance Society Limited. Mr and Mrs Papworth contracted with Total Insurance Services Corporation Limited to administer the claim against CIS on their behalf in return for 10 per cent of all settlements received. A contract was entered into between Mr and Mrs Papworth for the reinstatement of the house with Walsh Builders Limited. A surveyor, Mr Hook, who acted for Total, was named as the supervising officer under the contract with Walsh. Mr and Mrs Papworth assert that their house now suffers from a number of defects as a result of the flood and the subsequent work.
- In consequence Mr and Mrs Papworth have brought two actions. In the first they claimed against CIS under the policy and under an oral agreement which, they assert, was made with them by CIS on 2 April 2001. They say that CIS then agreed to pay for such further repairs as are necessary to put the house into good order. In the second action the defendants are Total and Walsh. The claim against Total is for damages in failing to exercise due care in the drawing up of the specification for the works and in connection with the contract with Walsh. The claim against Walsh is for damages for breach of the contract for the works. In each action the damages fall under two heads: first, the cost of the repairs which are said to be necessary to reinstate the property as it should be; second, claims for consequential losses arising in connection with Mrs Papworth's business interests.
- On 6 September 2005, a little over a month before the trial began, Walsh went into voluntary liquidation. By a notice dated 13 October the liquidator disclaimed the company's interest in Walsh's claims in the action. That would cover both sums alleged due to Walsh from Mr and Mrs Papworth in respect of work covered by their insurance and in respect of work independently requested by them. I have not been asked on behalf of Mrs and Mrs Papworth for leave to continue the action against Walsh. So the claims against Walsh have not played any part in the trial.
The history
- The flood was on Saturday, 11 January 1997. It was reported to CIS on Monday, 13 January, and CIS immediately instructed their loss adjusters, McLarens Toplis, and a representative attended the house that day. On 16 January Mrs Papworth instructed Total to act for her, having found the company in the yellow pages. Between 5 February and 18 March four heaters and four dehumidifiers provided by Bicol Servicing Company Limited were in operation in the house. Bicol had originally been instructed by Mr Papworth on 11 January and had turned off the water. In, probably, March Mr Hook, who was to act as the 'supervising officer for the works' for Total drew up a specification for the building work required to the property. This was put out to tender to builders chosen by Mrs Papworth. Mr Papworth played almost no part in connection with the work. Walsh's tender was dated 22 April. After discussions with McLarens Toplis it was accepted by Total's letter of 25 June, subject to the exclusion of some work and a ten per cent reduction. Walsh commenced stripping out the property on 7 July. Following a check by Mr Hook on the moisture content of timbers remaining, Walsh moved on to the work of reinstating the house. The date when that occurred was not investigated during the trial. I will return to what can be extracted from the documents as to the progress of the work. The reinstatement work was combined with work which Mrs Papworth wished to have done which was not covered by the insurance and which was treated as a separate matter between Mrs Papworth and Walsh and did not involve Total. Mr and Mrs Papworth were able to move back into the property in mid December. They had been living in rented accommodation, the cost of which was covered by the insurance. On 6 February 1998 Mrs Papworth wrote to Total enclosing a snagging list of items which remained to be done and making a number of complaints. On 24 February there was a meeting on site between Mrs Papworth, Mr Walsh and Mr Hook. On 27 February Mr Hook wrote to Walsh enclosing a snagging list, saying that it was important that he resolved the question of money with Mrs Papworth so the snagging could be done. On 6 March Mrs Papworth wrote to Total with a new snagging list. On 17 March Total wrote to Walsh saying that, unless the snagging was done within 14 days, others would be employed to do it and the cost deducted from the final account. On 15 April Total wrote to Walsh saying that there were still some items to be completed, and these would be done by others. On 23 April Mrs Papworth wrote to Total saying that she was in the process of obtaining costs to carry out all the work that remained to be done. With hindsight it can be said that it is a matter of great regret that she did not get the work costed and get it done. No reason has been provided why she did not, but to be fair to the claimants it was not a matter that was emphasised at the trial.
- On 17 June Total sent McLarens Toplis a draft final account for the Walsh contract. In October the figure of £58,451 was agreed between Total, McLarens Toplis and Walsh, and eventually the balance due to Mr and Mrs Papworth was paid by the insurers. Nothing was kept back from the account to reflect the non-completion of the snagging. Mr Hook stated in his evidence that this was done so Mr and Mrs Papworth got the full amount from the insurers: it was then, he said, up to Mrs Papworth what she paid Walsh and what she did about the remaining work. I will have to examine the balance of the account between Mr and Mrs Papworth and Walsh in the context of what CIS paid out in respect of the building work.
- On 7 December 1998 Walsh wrote to Mrs Papworth saying they had not heard from her since August (when by letter of 21 August she had said she would inform them of the deductions she wanted). A solicitor's letter on behalf of Walsh followed on 21 January 1999. Meanwhile on 4 January an independent surveyor, Mr Everett, had inspected the property at Mrs Papworth's request in order to provide a valuation of it. Mrs Papworth stated that it was for insurance purposes. Mr Everett called it 'a reinstatement valuation report.' It is not among the trial papers. On 13 January McLarens Toplis had requested Mr and Mrs Papworth's signatures to a document stating that they had full satisfaction of their claims in return for a further payment of £1,327 for some doors which had been provided by a carpenter engaged by Mrs Papworth. On 15 March CIS wrote to Mrs Papworth saying they had asked McLarens Toplis to try again to establish what points were outstanding that prevented her signing. No real answer was forthcoming. On 19 November it was agreed within CIS that it should close its files.
- In December 1999 or early January 2000 a local agent newly appointed by CIS made a courtesy call on Mrs Papworth, and she told him that she was unhappy with the outcome of the claim and the repairs. CIS wrote to her on 7 January and the outcome was a meeting at Aragon Close on 21 February attended by Mr Conlon of CIS and McLarens Toplis. Meanwhile Mr Everett had made a second visit to Aragon Close on 3 February. He made a report dated 11 February. He found an unacceptable degree of thermal and shrinkage movement, and other defects. On 2 March McLarens Toplis informed Mr Hook by letter that on 21 February they had noted 'a number of significant problems' at the property. Mr Hook wrote to Mrs Papworth on 6 April saying that the problems were in the main due to the drying out of the property following the building works and that Walsh would not return to site to deal with them as they were owed money. On 17 May CIS wrote to Mrs Papworth saying that they had discharged their liability as insurers, and referring to the difficulty caused by Walsh's claim that they were owed money (put by Walsh at £19,187). On 22 May there was a meeting between CIS, McLarens Toplis, Walsh and Mr Hook to see if a solution could be found. Walsh agreed either to return to site if £6,000 was paid to them, or to reduce their account to £15,000 and Mrs Papworth should arrange for her own contractor to do the work. Mrs Papworth was informed of this by Mr Hook's letter of 6 June. She wrote to Mr Hook and CIS on 30 June: she was very angry that a meeting had been held without her attending. On 3 August Walsh's solicitors wrote to Mrs Papworth asking for payment within 7 days. On 28 September Mrs Papworth wrote to Walsh demanding £4,587 within 7 days.
- Meanwhile on 10 August 2000 Mr Conlon of CIS had written to Mrs Papworth suggesting a meeting. Mrs Papworth replied on 28 September enclosing her letter to Walsh of the same day, saying CIS might be hearing from her solicitors. It appears that on 26 September Mrs Papworth telephoned CIS's head office in Manchester and made a strong complaint. According to the note of the conversation she said that she had been blackmailed and cheated, and would take it to the press as she worked for the press (she did not). The result was that Mr Alderman, the manager of the London Regional office of CIS, was instructed to look into the matter.
- Mr Alderman spent 5 hours at Aragon Close with Mrs Papworth on 9 October 2000. It is plain that he formed the view from what he saw and was told that things had gone wrong. His note following the meeting stated that the impasse between Mrs Papworth and Walsh needed to be broken so Walsh could return to site and do what was necessary. A separate note recorded that mistakes had been made by McLarens Toplis and by Total. Mr Alderman asked for a report from McLarens Toplis. On 12 October he wrote to inform Mrs Papworth of that. McLarens Toplis did not respond until 21 November when they wrote concluding that this was a dispute between Mrs Papworth and her builder. On 14 March 2001 Mr Holding-Parsons (who acts for Mr and Mrs Papworth in this action but was then with another firm) wrote to Mr Alderman. The outcome was a meeting on 2 April attended by Mr Alderman, Mr Holding-Parsons and Mr and Mrs Papworth. As it is alleged that an agreement was made at this meeting for the breach of which CIS are liable in damages I must take this in some detail. Mr Alderman made manuscript notes as the meeting progressed. None have been disclosed coming from Mr Holding-Parsons. Mr Alderman gave evidence before me: Mr Holding-Parsons did not.
- Early on in the meeting on 2 April 2001 Mr Alderman agreed that he would pay the fees of Mr Everett and Mr Holding-Parsons in connection with the attempt to find a solution. Mr Alderman had previously agreed to pay Mr Everett's fees when he met Mrs Papworth on 9 October. I say 'in connection with the attempt to find a solution' because plainly Mr Alderman was not giving the surveyor and solicitor a blank cheque to cover anything they might do in connection with the building in whatever circumstances. At this stage the way forward had not been agreed, and it is the appropriate limitation to imply in the circumstances on the basis of what the parties reasonably understood.
- The next matter recorded in Mr Alderman's note is Mr Holding-Parson's assertion that there were three areas of fault: the inadequacy of the specification for the building work; the failure to complete snagging; and faulty workmanship. Mr Holding-Parsons asserted that CIS had chosen to repair the property themselves, exercising a right which Mr Holding-Parsons considered was given to CIS by the policy. He said that CIS was therefore liable for any further costs in remedying the property. I mention that this was an allegation which was pleaded, but which was abandoned at the trial. Even apart from the question of the proper construction of the policy the allegation was unsustainable because the contracting parties with Walsh were Mr and Mrs Papworth. Mr Alderman neither accepted nor rejected what Mr Holding-Parsons was saying. His attitude was to try and find a solution, and he was not interested in the legal niceties. I am satisfied that this must have been apparent at the meeting. He took that attitude because he thought, and I use my own words, that Mr and Mrs Papworth had had a raw deal, and he wanted to sustain the reputation of CIS as a fair insurer which provided a high standard of service.
- The plan, called the Action Plan, was agreed between Mr Alderman and Mr Holding- Parsons. It was as follows. CIS was to appoint a surveyor by 6 April. The surveyor should have access to the house and inspect it by 12 April. There was to be a meeting at the house between CIS's surveyor and Mr Everett between 17 and 20 April which would also be attended by Mr Alderman and Mr Holding-Parsons. The reason for the attendance of the latter two must have been so that they could protect their parties' interests by having an input as to the work to be done. That purpose is confirmed by Mr Holding- Parson's letter of 3 April 2001 where he said; 'You and I will be there at the end of the meeting , so that we can review their conclusions and decide on next steps.' The two surveyors were then to draw up a specification, setting out what further repairs were to be done, by 1 May. That specification was to be agreed by Mr Alderman and by Mr Holding-Parsons, also by 1 May. The intention of that must have again been so that they could protect their parties' interests. The agreed specification would be put out to tender and the work would be done. Once builders had been chosen, CIS were to discuss the alternative accommodation for Mr and Mrs Papworth during the work. I take this from Mr Alderman's note made during the meeting and Mr Holding-Parson's letter of 3 April 2001. Mr Alderman stated in his witness statement: 'It was my intention to review the costs involved and I was prepared to give consideration to meeting those costs – even the poor workmanship and snagging – if the cost was reasonable and it would enable us to conclude the dispute. The Action Plan stated that the Agreed Works would be done but what the Agreed Works were to constitute was to be the subject of further discussion and negotiation and, hopefully, agreement.' I accept that as a fair description of his position at the meeting, and I consider also that this position must have been clear to Mr and Mrs Papworth. I do not think that any figures had been mentioned between the parties at this stage. Mr Alderman had in mind some £25,000 or £30,000, which was a reasonable figure and not at all ungenerous having in mind the cost of the original work.
- CIS appointed Dennell & Co as their surveyors. On 19 April and 9 May 2001 Mr Dennell and Mr Hewson of Dennell & Co visited Aragon Close. In his letter to Mr Alderman of 18 May Mr Dennell referred to there being a vast number of defects, many of which, he stated, were individually relatively minor. The list covered fifteen pages. He suggested that he draw up a specification for the work required. The requirement of the Action Plan that Mr Alderman and Mr Holding-Parsons were to meet with the surveyors seems to have been over-looked. On 7 June Mr Holding-Parsons wrote to Mr Alderman stating that the fees of his firm and of Mr Everett were payable under the policy. Mr Alderman later agreed by letter of 9 October, confirming his oral agreement – which must go back to the meeting of 2 April. Meanwhile on 6 July Mr Everett and Mr Hewson had had a meeting with Mr and Mrs Papworth at the property, at which it had been agreed that Mr Hewson would prepare a schedule of works. Mr Hewson did so and sent it to Mr Everett on 12 September. Mr Everett considered that it was insufficiently specific, and on 28 September he had a meeting with Mrs Papworth at Aragon Close at which they went over it. She wrote to him on 12 October enclosing her own list of work and she wrote again on about it on 22 October and 23 October. In the former she referred to Mr Everett having to battle through the specifications to combine that prepared by Mr Hewson and that prepared by her. On 22 October Mr Hewson sent Mr Everett his schedule on disk. Mr Everett prepared a schedule dated 1 November. On 27 November Mr Everett sent the schedule of work which he had prepared to Mr Hewson. He had it priced by Orion Project Services. Their figure was £82,500 inclusive of VAT but excluding fees. By letter of 19 December Mr Hewson informed Mr Alderman that Mr Everett was not prepared to meet with him until his outstanding interim account had been settled. The problem appears to have been that CIS's head office required a breakdown of the sums claimed before paying them. Mr Everett's invoice was paid on 10 January 2002. On 25 January 2002 Mr Holding-Parsons wrote to Mr Alderman. He stated that the total cost of the work as estimated by Orion was £95,000 and that his clients' total claims were for £203,894. He included schedules prepared by Mrs Papworth showing how the figure was calculated. When he received this letter Mr Alderman's view of the prospects of any reasonable settlement with Mr and Mrs Papworth deteriorated. On 20 March he wrote to Mr Holding-Parsons referring to the latter's letters and telephone calls. He said that he had no objection in principle to a cash settlement, but recalled the agreed procedure and asked that Mr Everett should make contact with Mr Hewson. Mr Holding-Parsons replied on 12 April saying that the agreed timetable had not been kept and threatening proceedings. Mr Alderman responded on 18 April that the problem was the failure of Mr Everett to meet Mr Hewson. On 24 April Mr Holding-Parsons wrote enclosing invoices for his firm and Mr Everett with a breakdown of his own fees. The outcome was a meeting at Mr Holding-Parsons office with Mr Alderman on 8 May. Mr Everett's report exhibited Mr Holding-Parson's attendance note of the meeting, which is a curious way for it to have got into evidence. Mr Alderman did not wholly agree with it, and in so far as it suggests that he accepted that CIS would have to pay for whatever Mr Everett thought was necessary, I do not accept it. It shows that Mr Holding-Parsons considered that the surveyors were still some way apart. He told Mr Alderman that he was close to issuing proceedings and that particulars of claim were in an advanced stage. The ostensible purpose of the meeting was to set an agenda for a further meeting on 16 May attended by Mr Hewson, Mr Everett, Mr Alderman and Mr and Mrs Papworth. At this meeting it became clear that Mr and Mrs Papworth were looking for a cash settlement not directly linked to the cost of repairs, and so agreement between the surveyors was not pursued. After this nothing was done in furtherance of the Action Plan. Mr and Mrs Papworth wanted a cash payment to fund the purchase of a new business. That was in fact a café with buildings and land near Ongar on which Mrs Papworth was to exchange contracts on 21 June. On May 17 Mr Holding-Parsons wrote asking Mr Alderman for an interim payment of £66,000. At about this point CIS sought the advice of their solicitors, Merricks. Merricks wrote to Mr Holding-Parsons on 21 June. In summary they stated that CIS had fulfilled their obligations under the policy, and that the attempts to achieve an agreement had been a gesture of goodwill. There was no response to this letter. There was no letter before action.
- Proceedings were issued by Mr and Mrs Papworth against CIS on 10 December 2002, and CIS served its defence on 15 January 2003. The proceedings against Total and Walsh were issued on 20 June 2003. The same damages were claimed against Total and Walsh, and were largely the same as those claimed against CIS. Total did not serve a defence until 19 January 2005, and Walsh did not serve theirs until 11 January 2005. Walsh made a counterclaim for £19,187. The delay was in part because stays of the proceedings were in operation until 6 April 2004 to allow for mediation. CIS agreed the evaluator preferred by Mr and Mrs Papworth, but the mediation did not proceed because Mr and Mrs Papworth felt that the cost did not merit it. Directions were given on 25 May 2005 for the exchange of witness statements by 10 June and a further stay was ordered between 17 June and 14 July to allow settlement. Surveyors reports were ordered to be served by 25 August. On 19 August Fulford J refused an application by the claimants to adjourn the trial. He ordered that accountants' reports should be served by 14 September. He extended the time for service of surveyors reports until 5 September, ordering that if the claimants' report was not then served, they should not be entitled to rely on any surveyor's report. The trial began on 18 October and concluded on 31 October. I visited 4 Aragon Close during the morning of 25 October.
The broad issues
- As I have stated, the suggestion that in 1997 CIS had taken over the repair work to 4 Aragon Close was not pursued. The case was opened on the basis that there were two grounds of claim against CIS. The primary ground of claim was that CIS had agreed on 2 April 2001 to pay for the remedial work necessary to restore the property to its condition and appearance before the damage caused by the original incident, whatever its strict obligations under the policy. The second ground was that CIS were liable under the policy to pay for work which should have been done to the house, for which CIS was liable to pay under the policy, which had not been done and for which CIS had not paid. This second way of putting a claim was abandoned at the end of the trial.
- The broad issue as regards Total was whether Mr Hook had acted in breach of his duty to Mr and Mrs Papworth either as the drawer of the specification for the work to Aragon Close or as the supervising officer for the work.
- During the second day of the trial the three surveyor experts (as I will call them simply to distinguish them from the accountancy experts) produced a schedule of all the remedial work that they considered was necessary to bring the property into good condition. There was agreement of the items of work, but disagreement in respect of a few items as to the scope of the work required. The schedule listed 88 items and set out the work required in respect of each. It did not state why work was required, that is to say, it did not investigate the cause of the defect to be remedied. Nor did it investigate whether the defect was something for which CIS or Total might be liable. Thus, for example, it included defects in work which was outside the formal contract with Walsh but was the subject of Mrs Papworth's separate arrangements with Walsh. An example is the new ensuite bathroom in the front bedroom on the first floor. It did not consider whether defective work was to be attributed to a breach of duty by Mr Hook. These and similar aspects relating to the liability of the two remaining defendants had to be investigated with the experts during the trial. For this and for other reasons there were substantial changes between the claimants' case at the start of the trial and at its end. This made the conduct of the trial more difficult for all involved.
Some general points
- The quantity of water which escaped was large. When Mr Hook visited the house on 28 January 1997 he was surprised by the amount of damage: 'the whole house appeared to be completely saturated.' He did not think that so much water could have escaped in the circumstances described by Mrs Papworth.
- A house that has been subjected to serious flooding is never going to be the same house that it was before the flood. It is a repaired house. That may be more unfortunate with a comparatively new house as this was, than with an older house. But every house acquires its history as the years pass, and may be none the worse for it.
- The flood and building works took place in 1997. Mr Everett, the claimant's expert, first looked at the house in January 1999 but he did not did not make a full inspection and report until February 2000. Mr Hewson, CIS's expert, did not look at it until April 2001. Mr Fleming, Total's expert, first looked at it in April 2005. In his evidence Mr Hook was looking back 8 years to 1997. Likewise Mrs Papworth. All of this makes it difficult to establish what may have gone wrong and the causes of it.
- It was accepted between the experts that some minor cracking of new plaster was to be expected following the completion of the work. There is naturally no precise line between such cracking and more serious cracking for which a cause must be sought. But a division has nonetheless to be made.
- The house has been seen by a number of people. The reaction of each has been that there are substantially more defects than would be expected in a house following reinstatement after a flood even taking account of the fact that that snagging was not completed.
- Apart from the lounge and dining room no decorating has been done to the house since the work in 1997. So most what is now to be seen was done eight years ago, which is a substantial period for decorations.
- Much of what is now wrong with the house would have been remedied if relations between Mrs Papworth and Walsh had not broken down and 'snagging' had proceeded. Secondly, the primary target for a number of the claims would have been Walsh: but Walsh's going into liquidation has removed that possibility.
The case against CIS
- Mr John Bignall representing Mr and Mrs Papworth put their case against CIS in this way. He said that at the meeting on 2 April 2001 Mr Alderman undertook on behalf of CIS to pay for further remedial work necessary to put the house into its former condition once the work had been identified by the parties. He submitted that the claimants had at the least a right to be indemnified in respect of such work. He submitted that the agreement provided a machinery for the identification of the work, and that it did not affect the enforceability of the agreement that the machinery had not operated. He said that the court should determine what was reasonable in default of its operation. That was the course which was taken by the court in, for example, Foley v Classique Coaches Limited [1934] 2 KB 1, where May & Butcher v R [1934] 2 KB 17 was distinguished. Mr Bignall referred to Sudbrook Trading Estate Ltd v Eggleton [1983] AC 444 where the House of Lords overruled the Court of Appeal's decision that options contained in leases to purchase at a price to be agreed between valuers nominated by the parties was unenforceable as an agreement to agree, one of the parties having refused to appoint a valuer. In the course of his judgment Lord Fraser stated at page 483G:
'The true distinction is between those cases where the mode of ascertaining the price is an essential term of the contract, and those cases where the mode of ascertainment, though indicated in the contract, is subsidiary and non-essential.'
Mr Bignall pointed to the similar approach taken by Hobhouse J in Didymi Corporation v Atlantic Lines & Navigation Co. Inc. [1987] 2 Lloyd's Rep 166 at 169.2. The judgment of Hobhouse J. was affirmed by the Court of Appeal, and Sudbrook was considered and applied: [1988] 2 Lloyd's Rep. 108. Mr Bignall accepted that it was implicit in the agreement that Mr and Mrs Papworth should bring into account such sums as they had been paid by CIS on account of work carried out by Walsh, which had not been paid by them to Walsh, limited to work not done by Walsh.
- Miss Freya Newbery submitted on behalf of CIS that no certain and enforceable agreement had been reached.
- I have no hesitation in accepting Miss Newbery's submission. It is highly significant, in my view, that in order to construct a contract Mr Bignall has to set up something which was never in fact expressly agreed by the parties, namely that CIS would pay whatever was necessary to put the house into its former condition. In contrast the meeting on 2 April 2001 was concerned with an attempt to set up a machinery which, it was hoped, would lead to a resolution of the problem. It was concerned with machinery, not with obligations to pay. If it worked and resulted in agreement, it would result in an obligation to pay, which would be defined by the future agreement. If it failed, the parties remained where they were. It was not only the surveyors who were to be involved: Mr Alderman and Mr Holding-Parsons were also to have their say. In the event it failed. That was first because Mr Everett and Mr Hewson did not follow the course provided and did not agree a specification, and second, because Mr and Mrs Papworth introduced additional claims. In the end, in May 2002 it was simply abandoned as a way forward largely because Mr and Mrs Papworth wanted large sums of money and were much less interested in the repair of their house. Miss Newbery submitted also that, if a binding agreement was made in April 2001, it was abandoned and so discharged in May 2002. I would have accepted that submission.
- The surviving claim against CIS therefore fails.
The claims against Total
- I can begin by setting out the statement made by Mr Richard Edwards in his closing submissions on behalf of Total as to the duties which he accepted were owed by Mr Hook on behalf of Total:
(1) Total through Mr Hook had a duty to use reasonable skill and care in carrying out the services it undertook to perform, namely the specification of the reinstatement works and the administration of the building contract. These duties arose both in contact (by virtue of the Supply of Goods and Services Act 1982 and by implication at common law) and in tort.
(2) Mr Hook's duties as contract administrator on this particular project included a duty to use reasonable care to satisfy himself that the building had dried out sufficiently before instructing the contractor to commence the reinstatement works.
(3) Mr Hook's duties as contract administrator also included a duty to inspect the contractor's progress and the standard of his work at appropriate intervals, and in the course of such inspections to take reasonable care to satisfy himself that the work was being carried out to an acceptable standard, and if not, to take such steps as were reasonably practicable to secure that any defects were remedied.
(4) Inspection at fortnightly intervals is the norm on a job of this sort. Once Mr Hook was satisfied that the property had dried out sufficiently for the reinstatement works to start, there were no particularly sensitive works on this project which called for a special visit.
(5) The applicable standard is that of the reasonably competent construction professional holding himself out in 1997 as competent to specify and administer domestic building works. The standard is the same for a surveyor as it would be for an architect or any other construction professional performing such a role.
This statement was accepted by Mr Bignall with the reservation that on occasion visits might be required more often than fortnightly.
(i) The specification
- There were three allegations which were pursued. The first was that Mr Hook should have provided in the specification for the plaster to be removed from all the walls. The plaster was not removed from the blockwork walls. They constituted the external walls and some partition walls. The internal stud walls were to be demolished and rebuilt where they stood on chipboard flooring. Those that stood on plywood flooring were to be stripped and any internal insulation removed. This was later varied to allow plasterboard on the bathroom side of the stud partitioning to the second floor bathroom to remain pending inspection. It was the case of the claimants supported by the evidence of Mr Everett that all plaster should have been removed as part of the stripping out process.
- The need for removal of plaster from the blockwork walls was not supported by Mr Hewson or Mr Fleming. Their view was that provided the plaster appeared sound it should remain. Mr Everett said that it must be removed because the flood would have resulted in hygroscopic salts accumulating in the plaster. I do not accept that. The flood was a flood from the domestic water supply. The water contains but few minerals. As was pointed out, plaster is made using domestic water but that does not result in any harmful accumulation of salts. I am afraid that I found much of Mr Everett's evidence as to the action of hydroscopic salts at Aragon Close lacking in logic and unacceptable. It was not supported by any literature and was contradicted by Mr Hewson and Mr Fleming, and also Mr Hook. It was a proper exercise of judgment by Mr Hook to decide that there was no need to remove the plaster from the blockwork walls, which was in accordance with common practice. It was not suggested that the appearance of the plaster was such that it called for removal.
- The complaint in respect of the second floor bathroom walls was that, if the plasterboard had been removed, it could have been discovered that there was a leak, apparently caused by the freezing of the pipe, in the pipework behind the wall, which later caused some further damage. I am satisfied that there was no need to remove the plasterboard for the purpose of drying out. It was not alleged that it was itself defective. I do not think that Mr Hook was at fault in not having the board removed so a check could be made for a leak. He had no reason to suspect that it might exist.
- The second allegation was that the specification should have provided for the staircase to be removed and a new one installed. This was not supported by Mr Hewson or Mr Fleming, and I accept their view. It is significant that in his specification of 1 November 2001 Mr Hook provided for the staircase to be dismantled and labelled for re-use. The reason for it to be dismantled was so the plasterer could have a clear run at the wall behind it: I refer to Mrs Papworth's letter to Mr Everett of 22 October 2001. The same provisions for removal of the staircase with labelling for reinstatement were made by Mr Everett in his Appendix XXVI which listed his view of the work to be done at the time of his report in the action, dated 5 September 2005.
- The third allegation was that the floor screed on the ground floor should have been removed. I have no hesitation in rejecting this and accepting the evidence of Mr Fleming and Mr Hewson.
(ii) Inspection
- It was a major part of the case against Total as it was opened to me that Mr Hook had permitted the work of reinstatement to begin before the house was sufficiently dried out. That was rightly not pursued by Mr Bignall in his closing submissions. It was not supported by the evidence. In his cross-examination by Mr Edwards Mr Everett accepted that there was no good practical guidance saying that all plaster should be hacked off because it was a question of degree. He also said that he could not now criticise Mr Hook's judgment of a wall made at the time.
- The case as to drying out that was pursued on behalf of Mr and Mrs Papworth at the end of the trial was that the temperature and the humidity in the house had not been sufficiently controlled during the period of the reinstatement works in particular in the last two to three months, namely October, November and December 1997. This should have been done by the contractor, Walsh, but, it was alleged, was not. Mr Hook was in breach of his duty in not ensuring that it was. Paragraph 2.6.13 of the specification was relied on:
2.6.13. Drying the Works: Carefully and progressively dry out the works including providing labour, appliances and fuel; avoid sudden humidity changes; ensure materials and components subject to dimensional changes (e.g. joinery) are installed and maintained in suitable conditions. Note: If the permanent heating system is available the contractor may use it subject to the following provisions:
(a) approval for use.
(b) Payment of all costs arising.
(c) Without charge to liability for defects.
(d) Insurance for use to practical completion.
The case was that this was responsible for the major cracking that had occurred. It was suggested that the cracking had been exacerbated in some places by hydroscopic salts in the plaster. I have already rejected any case relating to hydroscopic salts. Mr Edwards submitted that this case was not pleaded and that Total, in particular Mr Hook in giving his evidence, had been disadvantaged. He suggested, however, that I should dismiss the allegation on the basis of the evidence rather than shutting it out on a pleading point.
- The case against Total also relied on alleged failures of supervision by Mr Hook in relation to work that was not done to an appropriate standard. Mr and Mrs Papworth face a problem here. It is clear from the correspondence that both Mrs Papworth and Mr Hook inspected the house in February and March 1998. Mrs Papworth was of course living there. Her letter of 6 February 1998 enclosed a 6 page list of defects. She wrote again on 6 March with further defects. She was not a lady who was restrained in making a complaint if there was one to be made.
- I will next record Mr Hewson's view set out in joint statement of the three experts dated 12 October 2005 that 'the reinstatement work left insufficient time for drying out of the replacement materials introduced into the house, such as plaster: in [Mr Hewson's] view, the Claim refers to this as inadequate drying out.' Mr Everett agreed. Mr Fleming considered that there was nothing unusual about the overall period allowed for the sort of work specified and so did not agree. Mr Hewson was asked about this in examination by Miss Newbery and stated that new plaster and timber needed to be dry enough for their finishes. He was not asked to consider what the timescale with these works had been. That is important. The work of stripping out began on 7 July 1997. Mr and Mrs Papworth were able to move back into the house before Christmas, probably in mid December. Interim valuation number 1 was made on 22 July 1997. It shows that the greater part of the stripping out had been done and shows that Walsh had some timber and plasterboard on site to a value of £719. The total certified was £7,668. Valuation number 2 was made on 20 August with a total of £19,830. No breakdown is available. Number 3 is dated 11 September and totals £26,774 excluding kitchen units. The breakdown shows that the new stud walls, flooring, ceilings and plaster to walls were complete. £460 was certified on skirtings from a contract sum of £580. £240 was certified on architraves from a contract sum of £480. £3,350 was certified on decorations from a contract sum of £8,890. So the work had advanced apace. That is borne out by Mrs Papworth's letter of 23 September where she refers to the fitted wardrobes being in the process of installation. The fourth valuation dated 14 October was for a total of £34,514 excluding the fitted wardrobes. The skirtings and architraves were certified in full and £5,350 for decorations. I do not think that it is necessary to pursue the exercise further. These documents were in evidence but were not examined during the trial. They show that there was a substantial period between the carrying out of the work in the late summer and re-occupation in December.
- The course I intend to follow is to consider the individual defects in respect of which claims are now made against Total, and I will return to the general allegation as to temperature control and humidity. I take this course because examination of the defects is relevant to what was going on in the building. I will use the numbering of the joint schedule of remedial works prepared by Mr Everett, Mr Hewson and Mr Fleming. The schedule presents a problem that although the general location of the defect is identified, there is no actual description of the defect. This leaves doubt in some instances as to which defect visible on site is referred to where, a matter which I had hoped I had clarified on my visit to Aragon Close. The claimants' schedule setting out its case in relation to defects uses the same numbering, but in some instances I have been unsure that the schedule identifies the same defect as the experts in their schedule. I have done my best to deal with the defects in respect of which Total are alleged to be liable, as I perceive them to be.
Defect 1.1 – ceiling to rear bedroom, second floor. Two defects are referred to. First, plaster lifted over nail heads. I counted seven. It is suggested that this is due to thermal and shrinkage movement caused by insufficient control of conditions after the work was done. The second is the angle between the upper lower pitches of the ceiling have a coved finish instead of an obtuse angle joint, that is to say, the join is curved rather than sharp. I do not consider this a defect. It is a method that is commonly used. The join may have been coved originally.
Defect 1.3 – substantial cracking of plaster on gable end wall of rear bedroom, second floor, following the line of the roof. The line of the cracking probably follows the join of the new plaster applied to the ceiling with the old plaster which was left on the blockwork gable wall. The plaster has not only cracked but in places a narrow width has fallen away. This is alleged to be as a result of insufficient control of conditions after the plastering was done. The joining of the plaster leading from the roof makes this a weak point subject to differential movements and some cracking here is likely for that reason. But the cracks are much larger than would be caused by that alone. They have apparently developed over some years. They were not specifically mentioned in the correspondence about snagging in February and March 1998. It is possible that the surface of the old plaster was not properly prepared. It is possible that insufficient control of conditions could have contributed to them. Having heard the opinions of the experts I do not consider that it could be the sole cause. Mr Everett now considers that it is necessary to re-plaster the whole of the gable wall whereas Mr Hewson and Mr Fleming consider that only the cracked areas need to be repaired. I accept the latter view. That I should do so is confirmed by the specification which Mr Everett prepared dated 1 November 2001, which made no provision for any wholesale removal of plaster: I refer to paragraph 1.16 which is very much in line with what Mr Hewson and Mr Fleming propose for the repair of the serious cracks in plaster. Mr Everett first said that this was an omission on his part, and then that he was trying to meet Mr Hewson half way. The second answer in particular does him no credit. For Mrs Papworth was in no way interested in compromise and he knew that. It is of interest that in her letter to Mr Everett of 22 October 2001 she refers to a plasterer having visited the house, and the intention plainly was for him to consider what needed to be done.
Defect 1.4 – the door to the rear bedroom on the second floor is too small. The door is rather too small. In her list of defects as at 5 February 1998 Mrs Papworth stated that most of the internal doors needed shaving and fitting. When I looked at this door I saw that its leading edge had been crudely planed down – the marks were visible under the paint. The first paragraph of Mr Hook's letter to Walsh of 2 April 1998 suggests that some snagging was done. Or the shaving down may have been done by another. I am not satisfied that there was an inspection failure here.
Defect 1.5 – striker plates incorrectly located. Striker plates often need adjustment. I am not satisfied that there was a failure of inspection.
Shower door has come away. This was cheap item which has failed with time.
Wall cupboard door out of alignment. This is because with time a slight gap has opened at the top hinge. There was no failure of inspection.
Defect 1.6 – shrinkage gaps on mitred joints of door furniture to back bedroom, second floor. Having seen these I do not think that they are larger than is sometimes to be expected: it is a matter for filling and re-decorating. They are not due to any failure of inspection.
Defect 1.7 – creaking floor to back bedroom, second floor. The floor has not been inspected. Creaking floors did not feature in the snagging correspondence. I do not consider that this can have been caused by any failure to control conditions in the house after the floor's installation. Nor was there a failure of inspection. No work to the floors was proposed in Mr Everett's specification of 1 November 2001.
Defect 1.8 – front bedroom, second floor. As defect 1.1, coved angle.
Defect 1.9 – poorly finished ceiling, front bedroom second floor. This was not referred to in the snagging correspondence. It is not good but acceptable.
Defect 1.10 – plasterwork, front bedroom, second floor. As defect 1.3
Defect 1.11 – door to front bedroom, second floor. The door does not feature in any snagging correspondence save as I have mentioned under defect 1.4. It seems unlikely that it appeared then as it does now. I am not satisfied that there was a failure of inspection by Mr Hook.
Defect 1.12 – wall cupboard door, front bedroom second floor. This fits badly in that it jams at the opening edge and has gaps at the top and bottom. The door featured in the original snagging list as needing the door knob replacing and a brass facing plate fitted. So it was clearly examined at that time and nothing else was found wrong.
Defect 1.13 – door frames, front bedroom, second floor. As defect 1.6.
Defect 1.14 – creaky floor, front bedroom, second floor. As defect 1.7
Defect 1.15 – poor plasterwork around light. This was picked up on snagging as 'refix ceiling light fitting'. So there was not a failure of inspection.
Defect 1.17 – landing joinery. This refers largely to the doors the bedroom sides of which I have considered in defects 1.6 and 1.13. My comments on 1.6 apply. There is a split architrave, which requires replacing. Mr Hook should have rejected this at an early stage.
Defect 1.18 – creaky landing floor. As defect 1.7 above.
Defect 2.2 – cracking in landing wall. This is a serious crack which runs up the outside wall from the stairs at a level of perhaps three feet above the level of the ground floor up to the window. At the base a small amount of plaster has fallen away and a crack in the blockwork can be seen which appears to follow the same line. This was original plaster which was not removed. Surprisingly there is no sign of the crack continuing in the wall below the stairs, which can be examined by means of the stair cupboard. I do not think that the main cause of this crack could be a failure to control conditions in the house during remedial work. There must be another cause or causes which have not been identified. As to the remedial work which is required, I do not accept Mr Everett's view that it is necessary to remove all the plaster from the wall: I accept the repair proposed by Mr Hewson and Mr Fleming. [This defect is omitted from the claimant's schedule, which is plainly an error as the crack rightly featured prominently in Mr Bignall's closing submissions. I trust I have correctly identified it under this number.]
Defect 2.3 – crack to plaster of blockwork partition wall between stair well and front bedroom, first floor. This crack has some similarity to the crack which is defect 2.2, but it is less serious. A failure to control conditions in the house during remedial work could have contributed to it. I accept Mr Fleming's and Mr Hewson's proposals as to remedial work.
Defect 2.7 – creaky landing floor. As defect 1.7.
Defect 2.8 – cornice cracks. These are quite minor and are the kind of cracks which may be expected with time and are dealt with when redecorating. The cornice appears secure.
Defect 2.10 – alleged gaps between sheets of wallpaper by built-in drawer unit, front bedroom, first floor. The fault to which my attention was drawn was that a very small gap had appeared between the unit and the wall, a trivial complaint to be made good on redecorating, which is not now pursued against Total.
Defect 2. 14 – damage to the window frames in the front bedroom, first floor. This was picked up by Mrs Papworth in her letter of 6 March 1997, and was passed on to Walsh by Mr Hook as something requiring remedy. I do not consider that the damage is as severe as Mrs Papworth's description in the letter suggests. It should have been done as part of the snagging. Mr Hook was not at fault.
Defect 2.15– junctions of skirting on outside wall of front bedroom, first floor. A short piece has been inserted in the centre of the skirting butted a right-angles. It is unsightly and pieces of a length requiring only one join should have been chosen, and the join spliced diagonally. Mr Hook had a long period in which to pick this up and to require its replacement. I think that he was at fault here.
Defect 2.16 – creaky floor, front bedroom, first floor. As defect 1.7.
Defect 2.20 – family bathroom ceiling, first floor, cracking at junctions with walls. These cracks are readily reparable as part of redecoration and are insignificant. The important cracks are those that follow.
Defect 2.21.i – crack in family bathroom at junction of adjoining bedroom with rear wall. This is a substantial vertical crack which had opened up in the corner where the two stud walls forming the back and one side of the bathroom join. There has been some differential movement between the plaster of the walls. That movement may have been in part caused by drying out of the walls including the studwork, which was not replaced. There is no equivalent crack in the wall on the other side, that is, in the bedroom. This at first seems curious, but it suggests that a major cause of the crack on the bathroom side has been its use as a bathroom and the changes in temperature and humidity which will go with that. There is no need for any plaster to be hacked off in connection with this crack, and as I understand it that is not proposed.
Defect 2.21.ii – a substantial crack in the plaster on the blockwork above the family bathroom door, and other minor cracking. The substantial horizontal crack above the door is curious. It is very wide, yet there is no equivalent crack on the other side of the wall on the landing. The blockwork here has very little height, because it does not carry into the next floor. The crack is far too large for its major cause to be shrinkage of this height of plaster. There must be another cause which may well be related to a movement of the blockwork or a movement of the building. The other cracking which is referred to is not so serious and may be expected over time in a bathroom. The plaster over the door needs to be removed. I otherwise accept the remedial work proposed by Mr Hewson and Mr Fleming. Mr Everett did not provide for any plaster to be hacked off in his specification of 1 November 2001.
Defect 2.23 – split architrave in family bathroom over door. This should have been observed by Mr Hook and removed prior to decoration.
Defect 2.24 – creaky family bathroom floor. As 1.7 above.
Defect 2.25 – cornice – rear bedroom. As defect 2.8
Defect 2.26 – cracking in the plaster in the rear bedroom, first floor, on the blockwork wall between the bedroom and the landing. This is the equivalent cracking to that in defect 2.21. My comments there apply.
Defect 2.27 – joinery of rear bedroom first floor. I consider that the architrave was either not cut to an acceptable standard or had shrunk unacceptably prior to decoration. It should have been observed by Mr Hook and replaced.
Defect 2.28 – creaky floor, rear bedroom, first floor. As defect 1. 7.
Defect 2.29 – bathroom ceiling, ensuite to rear bedroom – poor skim. I looked at the ceiling and noted nothing wrong with it, but I cannot now recollect being asked to examine the skim. The work was not included by Mr Hewson in his schedule of work prepared in 2001. Neither does the joint schedule suggest replastering.
Defect 2.29 – cornice cracks – rear ensuite bathroom, first floor. I refer to defect 2.8. A bathroom is a particularly hostile environment for cornices
Defect 2.30 – substantial crack in ensuite bathroom to rear bedroom, first floor. This is a substantial crack at the junction of the stud wall with the outside wall. It is not mirrored in the bedroom. It is similar to that considered at defect 2.20. My comments there also apply here.
Defect 2.30.i – crack at junction of tiles in rear ensuite bathroom. This is trivial.
Defect 2.32 – defective caulking at bath edge, rear ensuite bathroom, second floor. There is no reason to think that it was visibly defective in 1997 or 1998.
Defect 2.34 – creaky floor, rear ensuite bathroom, first floor. As defect 1.7
Defect 3.1 – fine cracking of plaster on outer wall of upper stair. This may be related to defect 2.2. It is less serious.
Defect 3.2 – gaps between stairs and walls. There is a gap of perhaps a centimetre at the top of the long run of stairs against the flank wall and a smaller gap at the top of the first run against the downstairs lavatory wall. The gaps taper off to nothing lower down in each case. The top run of stair has also moved in relation to the wall, as can be seen from the decoration. The stringers at the wall side of the stairs are fitted with a quadrant moulding which was no doubt intended originally to provide a neat fit to the wall. The gaps cannot have been present when the stairs were decorated in 1997. In her list of defects as at 5 February 1998 Mrs Papworth states that the skirting, that is, the stringers, were cracking against the walls and would soon need attention. So the process had then begun. It seems probable that the stairs have in some way twisted. The original case was that there was a problem of shrinkage which had caused the gaps. I do not see how gaps of the size here could have been caused by shrinkage because any shrinkage in the thickness of the plaster or along the length of the stair timbers would be very slight. I have already considered and rejected the case that the stairs should have been taken out and replaced in the original works. That leaves the case that the distortion and movement has arisen because the conditions in the building were not adequately controlled during the reinstatement works. The greater part of the movement has taken place since early February 1998. Mr Hewson and Mr Fleming consider that the gaps can be dealt with by replacing the quadrant beading with a wider moulding which will bridge the gap. Mr Everett considers that this would be unsightly and that the staircase must be taken out and replaced. But that is not the view he formed in November 2001. He then provided for the staircase to be taken out, labelled, and reinstalled, the reason being to enable plastering. I do not consider that the stairs need to be replaced. An appropriate moulding will do the job. I should mention that the lowest stringer against the wall has split or divided. As the line of division is straight it is likely that two pieces of wood forming the stringer have separated slightly. A carpenter will be able to repair this. I will return to the issue whether what has happened was caused by inadequate supervision by Mr Hook of conditions in the house during reinstatement.
Defects 3.6, 3.12 and 3.13. In the downstairs lavatory there is a small area of efflorescence on the plaster just above the skirting board. It has been there for some time. Damp meters have not found excessive moisture in the wall, starting, I believe with Mr Everett in February 2000. So there is no continuing problem. That being so I consider that the likely cause of the efflorescence is a damp patch in the screed which long ago dried out. It is possible that water may have collected against the outside wall during the flood. Mr Everett considers that the whole of the plaster on the walls of the lavatory and the adjacent block walling in the hall should be removed. Mr Hewson and Mr Fleming agreed in the schedule that it should be removed to a height of 300 mm. But in his evidence Mr Hewson said that although he had gone along with Mr Fleming, he would not replaster. I can see no reason for replastering, and, when I asked him, Mr Bignall could provide none. All that is needed is for the efflorescence to be rubbed off and redecoration. The claim against Total fails, however, at the first hurdle, because I have rejected the case that Mr Hook should have provided for the floor screed to be removed. There some cracks in the plaster. They appeared fine and can be dealt with during decorations.
Defect 3.7 – entrance hall walls. The experts schedule describes this as fine filling to the surface prior to decoration. This is cosmetic.
Defect 3.10 – entrance hall joinery. The experts' schedule provides for the replacement of a skirting and the raking out and filling of other joinery. It does not provide for any joinery other than the skirting to be replaced. I am not satisfied that there was any joinery here that should have been rejected by Mr Hook in 1997.
Defect 3.16 – lounge decorations including cornice. I am not satisfied that there is anything here to be attributed to any failure of inspection or to the conditions in the house during reinstatement.
Defects 3.19 and 3.22 – door architraves and skirtings in the lounge and dining room. The architraves have wide gaps at the mitres either through shrinkage or by being poorly cut, which have been decorated over. They should have been rejected by Mr Hook in 1997. Likewise any skirting boards with a gap of over 8mm. [I should state that I would reject any claim to replace the board-and- brace doors on the ground floor. These were cheap doors chosen by Mrs Papworth with her carpenter and it is no fault of Mr Hook that they have deformed. They were inspected by Mr Hook in the company of Mrs Papworth on 13 January 1999 , and were found satisfactory – see letter of 14 January 1999 from Mrs Papworth to CIS.]
Defect 3.25 – false beams on kitchen ceiling. There is nothing to suggest that the poor fixing now evident should have been evident to Mr Hook.
Defect 3.26 – cracking to the plaster in the kitchen, in particular at high level on the rear wall. The most serious of these cracks is that on the rear wall. There is also some hollow or porous plaster, although that was not pointed out to me as far as I can recollect. The serious cracks on the rear wall and hollow and porous plaster could be related to the conditions while reinstatement work was being carried out.
Defect 3.27 – doorway from kitchen to hall, and other kitchen joinery. The doorway is of shoddy construction and should have been rejected by Mr Hook. Likewise the architraves to the door to the dining room. I did not see any other joinery in the kitchen that was of such a standard that it should have been rejected by Mr Hook in 1997. I understand that Mr Everett's suggestion that it is necessary to remove all the kitchen units to check the walls behind for damp is not pursued. There is nothing to suggest that such a course is necessary. I would also reject any claim in respect of the units themselves.
Defect 3.29 – wiring beneath wall cupboard uses insulating tape. This should have been picked up by Mr Hook and replaced.
Defect 3.35 – the absence of a certificate under IEE regulations following testing. There is no evidence before me of any defect in the electrical system save defect 3.29. It is not appropriate to provide a contingency sum against any faults that may subsequently be found: it was for the claimants to prove their case at the trial.
- I now return to the issue whether cracking was caused by the alleged failure of Mr Hook to supervise the control of conditions in the house during reinstatement. I think my starting point must be that a finding that the serious cracking that has occurred is more serious than the cracking normally to be expected in situations such as that at 4 Aragon Close. That leads to the question why. It was not challenged that Mr Hook had correctly tested the moisture in the timbers remaining in the house before reinstatement work began and had found it satisfactory, and there was no basis for such a challenge. He did not test the plaster on the blockwork walls with a meter, but examined the plaster visually. I accept that this was a proper practice. It was on the basis of this that the case that Mr Hook had negligently permitted reinstatement work to start sooner than it should have done was not proceeded with. It appears that reinstatement probably began in early August. The house had had 8 months in which to dry, including the summer. That was a substantial period, even bearing in mind Mr Hook's description of it as 'completely saturated'. By 11 September the new stud walls, ceilings and plaster were done. By 14 October the joinery was complete and much of the decoration had been done. It is not clear when the central heating system was operational. The new boiler would certainly have been in place by the beginning of December, probably rather earlier. There was no evidence as to whether Walsh's men used the central heating to keep the house warm. Nor was there evidence whether they used any other form of heating in the house prior to the central heating becoming available. One reason for that was the late raising of this case. Mr and Mrs Papworth moved in in mid December and had the heating on. They apparently kept the house very warm. The new work had the late summer and autumn in which to dry out, and the whole house had that period in which to adjust. I consider it unlikely that Mr Hook took any positive measures (other than visits) during the reinstatement period to check what was happening in the house by way of temperature and humidity, or to ensure that it was heated appropriately. I am not satisfied that in the circumstances given the time of year and the timescale that he was required to take any. In the absence of evidence to the contrary when he visited the house he was entitled to think that all should be well. He did not tell Mr and Mrs Papworth that they should keep the central heating at a low level initially. He accepted that he should quite possibly have done so. It was not alleged that he was negligent in that, and I would in any event hold that he was not. Mr Hook could have approached the whole question of drying out and temperature control with more care. That care might have been appropriate in a different kind of building. But I find the approach he adopted was one which many surveyors in his position would have reasonably adopted in the particular circumstances. I do not think he was negligent. The case against Total in respect of cracks in plaster or movements in timber therefore fails. I do not have to decide whether that case should otherwise have been shut out because it was not pleaded.
- I appreciate that in absolving Mr. Hook of negligence in respect of the temperature and humidity in the house during reinstatement I have not answered the question why the cracking was so bad. I do not think that at this distance of time and on the evidence which was adduced a definite answer can be given. I suspect there was a combination of factors and that the reasons are different in different places. I can take the crack on the outer wall of the stairs, the crack over the doorway in the family bathroom and the crack in the corner between the stud walls of the family bathroom as examples where it is plain that different factors are likely to have been at work. It seems to me likely, with hindsight, that the block work walls still contained a higher than normal degree of moisture when reinstatement started. It is likely that Mr and Mrs Papworth turned up the central heating in the house quite high in December 1997 when they re-occupied the house. It has to be borne in mind also that the cracks seem to have appeared gradually in 1998, worsening over a number of months if not years. That does not seem to me to be not readily explicable in terms of what occurred in the second six months of 1997.
- Allied to the claim that Mr Hook failed properly to supervise the control of conditions in the house during reinstatement and an allegation that he had failed in his duty by not ensuring that new timber brought into the house by Walsh was acclimatised to conditions in the house to avoid shrinking and cracking. It was suggested to him that he should have checked new timber for its moisture content before permitting it to be used. Mr Hook responded that this was an outrageous suggestion, that if it was followed nothing would ever get built. He pointed out that it was sawn timber, kiln-dried, purchased from a timber merchant. In my view a supervisor of building work on a modest domestic contract is entitled to assume that the contractor will obtain timber which is suitably dry for use in the house. Timber which has been kept under cover by the merchant normally will be. He should not obtain timber which has been stored in the open. Storage in the open would be rare in the case of timber such as was to be used here. The supervisor should have his eyes open when he visits the site. If he sees unsuitable timber, he should reject it. It was not alleged that Mr Hook had failed in that. Sometimes the progress of the work will enable a contractor to bring timber onto site in advance of its use, in which case it will 'acclimatise'. But this is not always possible. It would not have been easy at 4 Aragon Close because it is a small house, and working conditions must have been tight. There is evidence that some timber at least was brought onto site in advance of its use. I refer to the valuation made on 17 July 1997 which included £719 for timber and plasterboard on site. The detail of next valuation is unfortunately not available. I do not consider that Mr Hook failed in his duty as regards timber brought onto site or as to its 'acclimatisation'.
- The claim against Total succeeds in respect of defects 1.17, 2.15, 2.23, 2.27, 3.19, 3.22, 3.27 and 3.29 to the extent I have set out when considering them. It will be necessary for the cost of the relevant work to be assessed. I understand that the parties are agreed that the method of assessment should be by getting the work priced by either a quantity surveyor or a builder. There is a dispute as to which it should be. In my view, given the nature of the work it is more appropriate that a builder assess the cost. It was considered by the experts that a percentage should be added to cover the cost of a supervising surveyor. That was on the basis that the whole (or at least a substantial part) of the work set out in the agreed schedule would be covered. It seems to me plainly unnecessary to have a surveyor to supervise the small quantity of work which will in fact be in question.
Monies retained Mr and Mrs Papworth from what they received on account of Walsh's work
- There is a substantial difference between what CIS paid on account of Walsh's work under the contract, and what was paid to Walsh by Mr and Mrs Papworth. That gives rise to two questions: what are the figures; and how far are they obliged to give any credit for such money to Total. I will take the second question first. Such money is in effect a retention against defects for which Walsh are responsible. How far is that to be brought into account against the cost of the work for which I have held Total liable? For if they receive money from Total without taking it into account, they may receive money effectively for the same work twice over. I consider that they are entitled to set that money against claims they have against Walsh arising from other breaches by Walsh of the contract, that is breaches causing defects other than those in respect of which I have held Total liable. But they should not be entitled to set the CIS money against claims they have against Walsh arising from work done by Walsh for them outside the contract. I can demonstrate the principle by a simplified example. Suppose that they had received £10,000 which they had not paid to Walsh. Suppose that there were a number of defects, Total being liable in respect of some, and Walsh being liable in respect of all. Suppose that the defects for which Total are liable cost £5,000 to put right. Suppose that the other defects for which Walsh alone are liable cost £8,000. Mr and Mrs Papworth could appropriate £8,000 of the £10,000 to the latter leaving £2,000 to be set against their claim against Total for £5,000. But they could not off-set that £2,000 against claims relating to work done by Walsh outside the main contract.
- What monies have Mr and Mrs Papworth received and retained? The total paid by CIS on account of Walsh's work was agreed between counsel to be £137,725. The total payments made according to a schedule marked 'D' produced by Mr Holding-Parsons at the end of the trial is £133,065. But this includes two duplicated payments of £4,104 and £6,600, total £10,704. The duplication of £4,104 was not fully demonstrated but exact tally of the figures cannot be by chance. £137,725 less £133,065 plus £10,704 gives £15,364. Miss Newbery has done her own calculation by a quite different route and had arrived at £13,534. That apparently requires adjustment to take account of vat on kitchen units and wardrobes, and she had used a figure of £5,084 for certain monies paid out by Mrs Papworth, whereas Mrs Papworth's figure in schedule D was £2,810. The latter difference would add £2,274 to Miss Newbery's figure to give £15,708 which requires reducing for the vat. So the parties are not far apart, and about £15,000 looks right. These figures do not take account of Total's 10 per cent though it does take account of surveying fees of £8,457 due to Total and paid by CIS. As against Total it seems to me that the amount paid out by CIS is to be reduced to take account of what was paid to Total by way of Total's 10 per cent (the position would have been different as against CIS). I have been unable to ascertain a figure for that, and will need counsels' assistance. Having thus arrived at a figure for what Mr and Mrs Papworth received, I would have to assess the value of their claims against Walsh under the contract and deduct that from the figure to arrive at the credit to which Total are entitled. It may be felt that the exercise is not worth the candle.
Consequential losses
- Three claims are made for consequential losses, and I should deal with them. I should first record that they cannot succeed against CIS because I have held that CIS is not liable to the claimants in damages at all. I have held that Total is liable for a number of matters which even taken together are minor. For that reason no causation can be shown between the breaches of duty in relation to those matters and the damages which are claimed. That will be immediately apparent from the descriptions of the three head of claim. Had I held CIS and Total liable in respect of all the matters which were claimed against them these claims for consequential losses would nonetheless have failed. The main reasons follow.
- A claim is made for the costs of taking a second mortgage to acquire the café in June 2002. This was said to be claimable because Aragon Close would have been sold had it been saleable for a proper price. Instead it has been kept on and rented. The amount claimed is £151,151 calculated to 31 October 2005. I am not satisfied that it would have been sold. Mrs Papworth prepared a business plan in 2001 showing it being rented, then if not now the property market was strong and an increase in value could be expected. But in any event the claim based on the interest payable is far too remote to be recoverable against either defendant. Neither an insurer nor a surveyor has ordinarily any reason to think that if he fails to supervise work to a home properly the householder may have to raise a second mortgage to fund a new business. Nor did CIS or Total in this case. Mr Bignall cited me a number of authorities, but none of them came near to establishing that such an alleged loss could be recovered.
- The second claim is an unquantified claim in respect of Mrs Papworth's company, Aspect Print & Communications Limited. This had one customer, Barclays Bank, which terminated its contract at the end of 2001. The business of the company then came to an end. Mrs Papworth stated that because of the time taken up with the problems at Aragon Close she was unable to obtain any new clients. No evidence was adduced as to any efforts to find new clients. The house certainly took up a lot of time in 1997 and some time in 1998. To suggest that thereafter she was too occupied to give time to Aspect is nonsense, and it does Mrs Papworth no credit that she advanced this claim.
- The third claim is for £5,300 as lost profits because Mrs Papworth could not commence trading at the café as soon as she might otherwise have done, and for £5,300 as lost profits in respect of her alleged inability to develop a business of outside functions based on the café. Both of these claims are hopeless because they are too remote. I need not repeat what I have said in respect of the mortgage interest claim. Until shortly before the trial this claim was put at £71,977. Mrs Papworth alleged that she would never have bought the café if she had known that CIS would change its stance about paying for repairs. She exchanged contracts on the café on 17 May 2002. It had been stated at the meeting on 8 May 2002 that proceedings were being contemplated.
Outcome
- The claim against CIS fails. The claim against Total succeeds to the modest extent set out in paragraph 43.
