Knowledge Counsel London
"It is not unusual in the care sector for homes to be constructed and developed with a view ultimately for their disposal for profit to a third party."
Construction
The freeholder, Toppan, and leaseholder, Abbey, of a care home have recovered £6.4m of damages, interest and costs from the designer and builder of the care home, Simply Construct. Defects in the design and construction of the care home were discovered after it opened and Toppan incurred significant remedial costs, as well as a sale of the care home falling through. The claimants had already recovered some losses through adjudication, but this judgment awarded them losses from the wasted legal costs arising out of the aborted sale, as well as loss of trading profits that resulted from having fewer occupants of the home whilst the repairs were being carried out due to the defendant’s breach of duty. However, the judge did not award recovery of overdraft charges which Abbey claimed were necessary due to the remedial work and loss of expected income. The court held that such losses were too remote to be recoverable as Simply Construct had no knowledge of how the remedial work was to be funded.
WFW acted for the successful claimants. Read our detailed article here.
Arbitration
The Chancery Court has rejected a challenge to an arbitration decision in which the tribunal made no award as to costs. The tribunal considered that it did not have jurisdiction to award costs of a successful jurisdiction challenge. Although the court considered that the arbitrator’s decision was wrong, it was not so obviously wrong as to justify the grant of leave to appeal under section 69, Arbitration Act 1996. The judge acknowledged that the matter did need some clarification, as illustrated by the Law Commission recommendation that the law be amended to make the matter clear. Those changes will be made when the Arbitration Act 2025 comes into force.
Ravfox Ltd v Bexmoor Ltd [2025] EWHC 1313 (Ch), 27 June 2025
Building Safety Act 2022
The Court of Appeal has handed down two judgments dealing with the retrospective effect of the Building Safety Act 2022 (“Act”).
In Adriatic Land 5 Ltd v Long Leaseholders at Hippersley Point ([2025] EWCA Civ 856, 8 July 2025), the issue arose in the context of recovery by the landlord of service charges from tenants in respect of costs that occurred before the Act came into force. When the Act came into force, it provided that holders of qualifying leases were not liable for service charges in respect of professional services relating to liability under the Act. The Act had some retrospective effect because the costs incurred before the Act came into force on 28 June 2022 were not recoverable as service charges unless already paid before 28 June 2022.
In Triathlon Homes LLP v Stratford Village Development Partnership ([2025] EWCA Civ 846, 8 July 2025) the issue related to whether remediation contribution orders (“RCO”) could apply to costs incurred before the Act came into force. The Court of Appeal heard a leapfrog appeal and upheld the decision of the First-tier Tribunal that a RCO could be made against the property developers in respect of costs that were incurred before the Act came into force under section 124 of the Act. It was just and equitable to make the order.
The court highlighted how these two judgments (and provisions of the Act) work together, namely, any costs that are no longer recoverable as part of the service charge, can be recovered under a RCO from those responsible for the defects.
Maritime
A shipowner who was asked to deliver a cargo without production of the bills of lading and in exchange for letters of indemnity (“LOI”) from the charterer, was subject to several claims for misdelivery of the cargo. It sought to recover those costs from the cargo exporters following the charterer’s insolvency. The LOIs provided for English court jurisdiction. The Court of Appeal upheld the lower court decision that the English court did not have jurisdiction to deal with these claims. The shipowner had failed to establish a sufficiently arguable case that the charterer had entered into the charterparty and the LOIs as agents for the exporters. It was clear that the structure of the contractual relationships was designed to insulate the exporters from liability as charterer and there was no evidence of consent to the charterer issuing the LOIs on the exporters’ behalf. The exporter was not liable as an undisclosed principle under the LOIs.
Berge Bulk Shipping Pte Ltd v Taumata Plantations Limited [2025] EWCA Civ 876, 10 July 2025
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