Naylor & Ors v Roamquest Ltd & Anor

On an application to strike out or obtain summary judgment, a claimant must plead a positive, coherent and sufficiently particularised case. A claim based only on suspicion that defects may exist, or on the absence of documents proving that they do not exist, is deficient. The court may permit amendment rather than strike out the claim finally.

Leasehold owners may, in principle, recover substantial damages for defects in common parts, including reasonable and proportionate reinstatement costs, if they establish the relevant breach and loss. A claim for residual diminution in value after remedial works is also arguable. Whether any blight is transitory, permanent or extinguished by the works is fact-sensitive and ordinarily unsuitable for summary determination.

The claimants were leasehold owners of flats in a mixed residential and commercial development. They alleged breaches of the Building Regulations 2000, contract and the Defective Premises Act 1972 arising from defective cladding, insulation, cavity barriers and fire stopping.

The defendants applied under the Civil Procedure Rules 1998 for strike-out or summary judgment concerning alleged additional defects, the claimants’ standing to recover remedial costs, and claims for diminution in value. The central questions were whether the defects claim was properly pleaded, whether the leaseholders could claim substantial damages relating to common parts, and whether residual diminution was suitable for summary determination.

1. Application and pleading. The application was adjourned. The additional-defects claim was inadequately pleaded because it relied on assumed or potential defects, did not identify their nature, extent or location, and did not distinguish defects covered by NHBC-funded works from disputed defects. The claimants had to plead a positive case identifying breach and damage. The court permitted amendment instead of striking out the claim finally.
2. Strike-out and summary-judgment principles. Under rules 3.4 and 24.2 of the Civil Procedure Rules 1998, the defendants bore the burden of showing that the claims had no reasonable grounds or real prospect of success and that there was no compelling reason for trial. The court applied the principles summarised in Tesco Stores Ltd v Mastercard Incorporated [2015] EWHC 1145 (Ch), including the need to distinguish a realistic claim from a fanciful one and to avoid a mini-trial.
3. Standing and remedial costs. If defects amounting to breach were established, a leaseholder could in principle claim damages measured by the diminution in value of the flat, assessed by reference to reasonable and proportionate reinstatement costs. The fact that works to common parts might benefit other leaseholders did not, without more, prevent recovery. Whether the individual claimants could recover some or all of the claimed costs required factual investigation at trial.
4. Residual diminution. Following Strange v Westbury Homes (Holdings) Ltd [2009] EWCA Civ 1247 and Rendlesham Estates plc v Barr Ltd [2014] EWHC 3968 (TCC), residual diminution after remedial works was an arguable head of loss. The extent of any blight depended on the nature of the defects and whether its effects were temporary, permanent, reduced over time or removed by remediation. The claim could not properly be determined summarily.
5. The claimants were given an opportunity to amend. Further consequential matters were left for agreement or a later hearing.