Property development — Building works — Subsidence — Damage to property — Claim in damages against developer and builders — Owners abandoning reliance on warranty — Whether subsequent amendment permissible to reinstate claim — High Court holding that owners entitled to amend pleadings to bring claim and raise new claim on same facts — Court of Appeal upholding that decision — Judgment for owners
The two defendant companies were controlled by a father and his son. The first was a building company, which in 1985 built for the second company, which was a property developer, on land owned by it, a bungalow at 40 Wedgwood Way, Ashingdon, Rochford, Essex. The site was subject to subsidence and clay heave during the building works and the concrete slab rose and fractured. Remedial work was carried out on the advice of architects and on completion, the bungalow was sold to the plaintiffs, who were told nothing about the trouble with the foundations. Soon after, cracks appeared in the bungalow and loss adjusters advised the plaintiffs’ insurers that the bungalow was a total loss. On December 1 1988 the plaintiffs commenced proceedings against the defendants claiming damages. It was originally claimed that the first defendants were in breach of their duty to use reasonable care and skill in constructing the property and the second defendants owed a duty to the purchasers to investigate and examine the land to ensure that it was safe to build the property on it. Further, it was said that the second defendants were, by reason of their breach of duty, in breach of their express warranty under the House Purchaser’s Agreement. On June 18 1991, in answer to a request for further and better particulars, the plaintiffs’ then solicitors mistakenly stated that the plaintiffs no longer intended to rely on the warranty. In reliance on that abandonment the defendants applied for an order that the statement of claim be struck out under the inherent jurisdiction of the court on the ground that it disclosed no reasonable cause of action. The plaintiffs then instructed a new firm of solicitors and counsel who applied to amend the statement of claim and the further and better particulars to rely on the warranty and resurrect the claim under the House Purchaser’s Agreement, as well as to rely on the conditions of sale annexed to the contract of sale. A recorder granted the applications by the plaintiffs and dismissed the defendants’ application to strike out. The defendants appealed.
Held The appeal was dismissed.
1. All the difficulty in this case flowed from a mistake committed by the plaintiffs’ then legal advisers on June 18 1991. There was no suggestion that rectification of the mistake would cause any prejudice to the defendants. There was no reason why, in the court’s discretion, the further and better particulars should not be amended under or (if preferred) an admission withdrawn.
2. The exercise did not involve the addition of a new cause of action; the claim on the warranty under the House Purchaser’s Agreement was extant.
3. Once the particulars were amended then, although the claim under the contract of sale was a new claim, it arose out of precisely the same facts as those giving rise to the claim under the House Purchaser’s Agreement. The judge accordingly had jurisdiction to allow the amendments sought.
Ian Croxford QC and Tom Lowe (instructed by Drysdales & James, of Southend-on-Sea) appeared for the defendants; Guy Anthony (instructed by Merricks, of Chelmsford) appeared for the plaintiffs.
