An affordable housing provider suing contract Mulalley over combustible cladding on five tower blocks in Portsmouth can modify its claim, despite being out-of-time, the Court of Appeal ruled today.
As the case arises from circumstances caused by the Grenfell Tower fire, the ruling “may be of some significance to the construction industry”, according to Coulson LJ, who wrote today’s ruing.
Martlet Homes, an arm of affordable housing provider Hyde Group, is suing contractor Mulalley, claiming £8m for the cost of replacing all the cladding at Gosport Towers, Portsmouth, and to provide a “waking watch” to protect residents’ safety.
Hyde claims the cladding is unsafe and did not comply with building regulations. Mulalley denies this, saying that the buildings were deemed safe when constructed between 2005 and 2008. It argues that the fact that government advice on cladding changed after the Grenfell fire in 2017 does not affect this.
According to an earlier ruling, Hyde entered into a £15m design-and-build contract with Mulalley in 2005. Mulalley agreed to carry out various design and refurbishment works on the five-tower complex, including the design and installation of external cladding.
The work was completed in 2008, and in 2019 Hyde issued court proceedings against Mulalley, alleging negligence and breach of contract in the design and construction of the work. The case was brought a few days before the expiry of the limitation period to sue over much of the works.
According to the earlier ruling, Mulalley, in its defence, admitted a number of breaches of contract but required Hyde to prove some of the allegations.
However, it denied that the alleged breach of contract had caused any loss, and argued that following the Grenfell Tower fire in June 2017, Hyde was required to replace the combustible expanded polystyrene cladding fitted to the towers.
The parties are currently involved in a procedural dispute over the extent of the claim, which was filed shortly before a deadline to file expired.
After filing, Hyde asked permission to modify the particulars of claim to expressly say that the insulation used did not comply with building regulations at the time of the contract.
Mulalley opposed this. However, following a hearing in February last year, a High Court judge allowed Hyde to make the changes. Mulalley appealed to the Court of Appeal in December. In today’s ruling, the court backed the earlier judgment allowing the changes.
“The Court of Appeal today rejected an appeal by a contractor over a cladding claim involving one of the Hyde group’s largest high-rise residential developments,” a spokesperson for Hyde said.
“Martlet Homes (a Hyde group subsidiary) brought High Court proceedings against Mulalley & Co last year, claiming £8m for the cost of replacing cladding it installed at Gosport Towers, Portsmouth. Hyde claims the cladding was unsafe and did not comply with Building Regulations.
“The contractor has admitted defective workmanship, but denies liability. The case will go to trial in March 2022.”
Mulalley & Co Ltd v Martlet Homes Ltd
Court of Appeal (Coulson LJ, Baker LJ, Andrews LJ) 24 January 2022
To send feedback, e-mail newsdesk@eg.co.uk or tweet @EGPropertyNews
