STRIKING OUT A CLAIM UNDER THE CIVIL PROCEDURE RULES 1998
In the recent decision Crest Nicholson Operations Ltd & Anor v Grafik Architects Ltd & Anor [2021] EWHC 2948 (TCC), the Technology and Construction Court dismissed an application made to strike out the claim as disclosing no reasonable grounds for bringing the claim and/or because it is an abuse of process. The Court found that although there was need for further particularisation on some issues, the Particulars of Claim clearly disclosed a cause of action and reasonable grounds for bringing the claim.
Facts. The claim concerned defects in the external wall systems of a residential apartment building at The Quays, Portishead (the “development”) (at [1]-[3]).
The Claimants, Crest Nicholson Operations Limited and Crest Nicholson (South West) Limited (together referred to as “Crest”) were the developers. The First Defendant was the architect who designed the development and was not a party to the striking out application. The Second Defendant, NHBC Building Control Services Limited (“BCS”), was engaged by Crest to carry out the services of an Approved Inspector for the development.
BCS’s parent company, NHBC, provided the warranty for the development (at [4]). NHBC accepted claims from owners on the basis that the development does not comply with Building Regulations. NHBC had a right to reclaim its costs from Crest. Crest’s claim, therefore, was to seek to recover from the First Defendant and BCS the losses incurred by Crest in meeting the remedial costs claimed by NHBC from Crest. Crest’s claim against BCS was for breach of contractual and tortious duty for failing to identify, and notify Crest of, the defects.
BCS argued for the claim to be struck out pursuant to Civil Procedure Rule 3.4(2) on two grounds, “being that the Particulars of Claim do not sufficiently particularise the alleged breaches of duty to enable BCS to understand the case it has to meet and that the claim is not supported by expert evidence.” (at [6])
Any application to strike out is fact-specific as it depends on how well a claim is pleaded in the relevant case. This article will only address general points stated by the Court in relation to the first ground.
Lack of particularity. The Court stated as follows (at [12]):
“This is a claim based on breach of duty of an Approved Inspector. Both parties acknowledge that those duties are limited. Crest accepts that it is not sufficient for it simply to set out breaches of the Building Regulations. It must also identify the duties of an Approved Inspector, breaches of those duties and its case as to the consequences of that breach.”
The Court also set out the paragraph of the Particulars of Claim relating to the key allegations of breach of duty as Approved Inspector (at [15]):
“115. In providing its services to Crest, NHBC-BCS has caused and/or contributed to the Render Defects and the Cladding Defects as set out in paragraphs 45 to 111 above, in breach of clause 1.2 of the T&Cs and/or the Standards and/or negligently. Further, and in particular, NHBC-BCS failed to comply with clause 1.2 and/or the Standards in the respects identified at paragraph 113 above and generally in relation to the Render Defects and the Cladding Defects. NHBC-BCS employed staff who were not sufficiently qualified and/or did not understand the detail of the Development either in the plan stage or on inspection. Plans were not adequately assessed or properly signed off. The site inspections failed to note and/or warn and/or make remedial recommendations for any/all of the Render Defects and the Cladding Defects identified at paragraphs 45-111 above. A competent inspector would have noted and warned about all the Render Defects and the Cladding Defects which were clearly observable to a competent inspector and made appropriate recommendations. Had that happened the Render Defects and the Cladding Defects would not have existed or would have been remedied at no cost to Crest.” (emphasis added by Court)
About the allegations (in bold) above, the Court set out its analysis at [16] – [25] of the judgment.
Findings. The Court found that although the Particulars of Claim may require some further particulars for BCS to deal with some of the allegations fully, this was not a case where “there were mere assertions of breaches of duty with no explanation of the factual basis of the claim” (at [26]).
The Court added that “… this claim is made at a time when there are many similar claims for defects in buildings which have been identified as failing to meet the fire safety requirements of the Building Regulations following the tragic fire at Grenfell Tower. Many of those claims include allegations of defects resulting from inclusion in facades of materials that are not of limited combustibility and allegations of defects in fire barriers. Whilst that does not absolve Crest from the need to explain its case, BCS’s ability to understand the case it has to meet has to be viewed in the context of the very high level of awareness in the construction industry of the issues surrounding the problems that have been identified in many buildings with facade systems that do not meet the fire safety requirements of the Building Regulations.” (at [27]; emphasis added in bold)
All in all, the Court found that “The Particulars of Claim do not fail to disclose any reasonable ground for bringing the claim” (at [28]) although the Court recognised that “with the exception of the allegations in relation to the use of EPS, the Particulars of Claim do require more detail as to precisely what it is alleged it should have noticed in the plans or on site during inspection in relation to cavities and fire barriers, and at what stage, so that witness statements and experts’ reports are suitably focused and the issues for trial are clear.” (at [29])
The Court also took issue with the fact that for a complaint of lack of particularity, BCS issued an application to strike out the entire claim without first seeking clarification of the Particulars of Claim (at [30]). The Court stated that “It is unusual for the court to strike out a claim entirely without first giving the Claimant an opportunity to clarify its case. Whilst it may do so in a case which is clearly without any legal or factual basis, in a case where the complaint is lack of particularity, the usual course is for the Defendant first to request further information, whether informally or through a Part 18 request. If a Part 18 request is not answered, an application to court is made.”
In fact, with regard to BCS’s refusal to deal with Crest’s requests for documents and information sought by way of letter, the Court stated that it was “an unattractive position” (at [33]) because otherwise, Crest would have been in a better position to particularise its case and produce a more focussed pleading, for example, by particularising an allegation or not making an allegation (at [32]-[33]).
On the first ground, the Court thus summarised as follows (at [34]):
“In short, in my judgment, this is not a case that is suitable for striking out on the ground it discloses no reasonable ground for bringing the claim. The Particulars of Claim clearly disclose a cause of action, albeit that they are, at least in respect of some of the alleged defects, pleaded succinctly. Whilst further particulars are required, BCS has, through its refusal to engage in the exchange of information with a view to narrowing issues, contributed to Crest’s difficulties in pleading its case in detail at this stage. Further, the appropriate course in the first instance was to seek particulars.”
Significance. There is obviously a difference in threshold between a claim disclosing no reasonable ground and a claim requiring clarification or information. Given that striking out is a harsh remedy, there is good reason for maintaining a high threshold for striking out applications. This is also the position in Singapore when the courts decide whether pleadings should be struck out under Order 18, rule 19 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed).
Similarly, where a party is of the view that the pleadings of the opposing party lack particulars, he should make a request by letter to the opposing party, and thereafter, if necessary, file an application seeking further and better particulars under Order 18, rule 12 of the Rules of Court.
This publication is not intended to be, nor should it be taken as, legal advice; it is not a substitute for specific legal advice for specific circumstances. You should not take, nor refrain from taking, actions based on this publication. Chancery Law Corporation is not responsible for, and does not accept any responsibility for, any loss or damage that may arise from any reliance based on this publication.