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	England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Rendlesham Estates Plc & Ors v Barr Ltd [2014] EWHC 3968 (TCC) (28 November 2014) URL: http://www.bailii.org/ew/cases/EWHC/TCC/2014/3968.html Cite as: [2015] 1 WLR 3663, 157 Con LR 147, [2015] CILL 3604, [2014] EWHC 3968 (TCC), [2015] TCLR 1, [2015] BLR 37, [2015] WLR 3663

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT

		Royal Courts of Justice Rolls Buildings, 7 Rolls Buildings London EC4A 1NL
		28 November 2014

Mr. Justice Edwards-Stuart:

Introduction

1. This is a claim by the owners of 120 apartments in two apartment blocks in Concord Street, Leeds. The Claimants sue the Defendant ("Barr") who built the development. The two blocks were built between 2003 and 2006, as part of one development whose stated object was to provide high quality apartments for young professionals. Many of the apartments were sold off-plan. There are 171 apartments all told, but for various reasons only 120 of them now remain the subject of this litigation.
2. Unfortunately, the tenders that were initially obtained by the developers, City Wall Limited ("CWC"), came in at significantly more than CWC's budget. CWC was substantially reliant on the Royal Bank of Scotland for financial support and had limited resources of its own.
3. Barr, a construction company based in Scotland, had decided to enter the market for the construction of residential property in England and indicated that it would be prepared to build the development for a price that was within CWC's budget. However, it made it clear that this would involve making significant reductions to the quality of the finishes. Also Barr proposed to use a steel frame instead of the concrete frame on which previous designs had been based.
4. CWC accepted Barr's tender. Barr insisted on having a fairly free hand to make the necessary changes to the specification, some of which had to be negotiated with the planning department of the City Council.
5. The project did not go smoothly. Barr had problems with many of its subcontractors, some of whom were replaced more than once. Practical completion of the South block was achieved in July 2005 and of the North block in January 2006.
6. When the purchasers moved into their apartments they were very taken aback by what they found. Even one of Barr's own witnesses described the buildings as looking like council blocks from the 1960s. There were problems from the outset. Quite apart from the poor quality of the finishes to the common parts, many of the residents found when, or soon after, they moved in that the intercom system did not work properly and that the covered walkways would flood in heavy rain.
7. Within two or three years numerous additional problems had begun to manifest themselves. There were leaks above the walkway on the fifth floors, leaks from the penthouse balconies into the flats below, leaks into the voids above the walkway soffits, the appearance of mould and condensation in a number of apartments and in the common parts and, in a great many apartments, there were leaks and excessive mould in the shower cubicles.
8. In the meantime, there were disputes over Barr's final account and allegations of defects by CWC. Subsequently there was an adjudication in July 2007 which resulted in a decision in CWC's favour, but it seems that CWC spent little, if any, of the sums recovered from Barr in rectifying defects. Not long afterwards, in February 2008, CWC went into administration. By this time over 10% of the apartments were still unsold, so there was a consequent shortfall in the contributions to the management charge and there was no satisfactory management structure in place.
9. The owners were in a quandary. CWC was in administration and, in any event, it seems that the owners would have faced serious contractual difficulties in suing CWC for misrepresentation in relation to the quality of the finishes or the defects. The owners, of course, had no contract with Barr.
10. The result is that the Claimants have had to bring this action against Barr under the Defective Premises Act 1972 ("the Act"), alleging that their apartments were not fit for habitation when completed. Not all the owners are claimants and, indeed, some owners who joined in the proceedings initially have withdrawn their claims. This appears to have been the result, in part at least, of the terms of a settlement reached between Barr, CWC's administrators and the Royal Bank of Scotland. I will have to say a little more about this settlement later on in this judgment.

The structure of the judgment

11. This judgment consists of a main section, together with fifteen appendices, each of which is concerned with a particular type of defect or a specific topic.
12. The main judgment, which deals with the major issues of principle, is divided into the following sections:

Section	Paragraph
Introduction	1
The structure of the judgment	11
These proceedings	15
The principal areas of dispute	23
The construction of section 1 of the Defective Premises Act 1972 and the meaning of fitness for habitation	29
Conclusions on the meaning of section 1	82
Representative proceedings	84
The Claimants' witnesses - owners/residents	93
The Claimants' witnesses - non-owners/residents	94
The witnesses called on behalf of Barr	163
The experts	191
The ownership of the freehold	213
Apartment No. 156	219
Heads of claim where a breach of duty is not established	224
The measure of damages	226
The conduct of the management company	243
Summary of conclusions in relation to the scope of remedial works	256
The issue of blight on the value of the properties following remedial work	276
General damages for distress and inconvenience	301
Additional heads of loss	310
Other matters raised by the Claimants	315
Concluding observations	318

13. The appendices are as follows:

A	Evidence of the owners and occupiers called as witnesses
B	Balcony doors
C	Basement car parks
D	Cause of damp in apartments
E	External walls
F	Intercom
G	Kawneer external glazing
H	Penthouse balconies
I	Render
J	Roofs
K	Walkways
L	Internal partitions, doors, etc
M	Shower trays
N	Results of opening up
O	Thermal imaging
P	Heads of claim where a breach of duty is not established

14. The evidence of the owners and occupiers who were called as witnesses is summarised at Appendix A. The evidence of other witnesses is summarised in the main judgment.

These proceedings

15. The Claimants are effectively seeking to have the external envelope of the building substantially rebuilt, together with the rectification of certain defects within the apartments. The claim is for some £14 million.
16. Initially Barr denied liability for almost everything, but it has now conceded liability for a few of the defects whilst disputing the appropriate measure of damages.
17. A difficulty is presented by the fact that only 120 out of the 171 apartments are owned by the Claimants in the action. One point taken by Barr in its defence is that each owner is only entitled to recover his or her contribution to the maintenance charge in respect of the cost of any repairs, and then only if the relevant defect has made that owner's apartment unfit for habitation. For example, Barr contends that only the owners of apartments on the top floors are in a position to make a claim about defects in the roof because, whatever the state of the roof, it will not make apartments at lower levels unfit for habitation. Yet Barr also contends that the claims of the owners of the affected apartments on the top floors are limited to their proportion of the part of the service charge attributable to the cost of repair of the roof. If this argument is correct, there will always be a substantial shortfall in any recovery.
18. There are also serious issues about what constitutes a "dwelling" for the purposes of the Act and how, and by what criteria, fitness for habitation is to be determined.
19. There has been a direction that this hearing would determine the issues relating to what were described as "purely internal defects" by reference to eight lead apartments, together with issues relating to the common parts. The parties have selected four lead apartments each and the evidence in relation to the internal defects in the apartments has, in accordance with the direction, been largely confined to defects in the lead apartments. In addition, three witnesses (known as "additional B2 witnesses") gave evidence about the condition of the apartments which they owned or occupied. In relation to the common parts, there has been no limitation on the evidence which can be called, save that there was a direction limiting the number of B2 witnesses. Accordingly, where defects in the common parts, such as the external walls, have resulted in damp or mould within non-lead apartments, it is open to the court on this hearing to make findings in relation to those apartments.
20. However, having heard the evidence of the experts and considered the numerous reports and schedules, I do not consider that it is possible to make a finding about the fitness for habitation of non-lead apartments (at least, so far as the effect of the presence of mould and damp is concerned - I regard the position in relation to the malfunctioning intercom as slightly different) without also considering the evidence of the owner or occupier. Even if it were open to me to do so, I do not consider that it would be appropriate to embark on this as a paper exercise and without having submissions from the parties in relation to each apartment.
21. Over 20 witnesses were called on behalf of the claimants, together with three experts. Barr called four witnesses and two experts. In addition, evidence was submitted in writing from expert quantity surveyors on each side. The trial bundle consists of over 70 ring binders containing hard copy documents, together with about 150 electronic bundles consisting of further individual apartment Scott Schedules, schedules, invoices and so on. The parties' closing submissions ran to about 700 pages.
22. The Claimants were represented by Mr Alexander Nissen QC and Mr Jonathan Selby, instructed by Walker Morris. Barr was represented by Lord Marks QC, Mr Daniel Crowley and Mr Martin Hirst, instructed by DWF. The Defendants to the Solicitors' action ("the Solicitor Defendants"), which is a claim by the Claimants against their former solicitors, were represented by Ms. Fiona Sinclair QC and Miss Katie Powell. They were given permission to participate in this action, but by one set of legal representatives only.

The principal areas of dispute

23. The Claimants allege that many of the apartments have the following internal defects:

i) leaks from poorly installed shower units;

ii) inadequate insulation of the walls (on both balcony and walkway elevations) resulting in cold spots and the formation of mould on the internal walls and ceilings;

iii) inadequate support for the partition walls, resulting in the deformation of door frames and inability to close doors;

iv) non-functioning intercom for remote access to the main door;

v) poorly installed balcony doors with gaps below the frame;

vi) gaps below the party walls between apartments.

24. In relation to the common parts, the Claimants make the following complaints:

i) the external boarding and render has been badly installed and is likely to fail prematurely;

ii) cold bridging of the balcony supports and poor detailing around them;

iii) defective drainage to the walkways;

iv) leaks from the roof between the main roof and the glazing above the fifth floor walkways;

v) poor insulation and lack of properly installed vapour control layer in the roof;

vi) poor detailing and construction of the balconies to the fifth floor apartments;

vii) inadequate or incomplete insulation to the external walls;

viii) leaks through the external glazing to the walkway elevations;

ix) dampness and ponding in the basement car park (this applies particularly to the car park of the North block);

x) mould formation on the walls of the common parts at lower levels;

xi) unsafe fire escape staircases;

xii) unsafe Mansafe system on the roof.

25. The Claimants say that they are entitled to maintain this action in a representative capacity on behalf of those other owners who are not parties. Barr denies this and, as I have mentioned, asserts that, in relation to defects to the common parts, each claimant can only recover a sum representing its share of the liability under the service charge.
26. The Claimants' primary case is that the two blocks constitute a single "dwelling" within the meaning of the Act; alternatively, that each block constitutes a single dwelling. Barr contends that the extent of each dwelling is limited to the premises the subject of the demise under each lease.
27. In addition, Barr asserts that in order to carry out the remedial works that the Claimants say is necessary, all the apartments will have to be vacated for several months. However, Barr says that this will not be possible because the Claimants cannot compel the occupiers of those apartments owned by people who are not claimants to vacate their apartments while the work is carried out. Since, not being party to the action, those owners will have no entitlement to displacement costs, they are unlikely to be willing to cooperate with this scheme.
28. Since the outcome of these proceedings will turn to a large extent on the proper construction of section 1 of the Act, it is appropriate to turn to that issue first.

The construction of section 1 the Defective Premises Act 1972

29. Section 1 of the Defective Premises Act 1972 ("the Act") provides as follows:

"A person taking on work for or in connection with the provision of a dwelling (whether the dwelling is provided by the erection or by the conversion or enlargement of a building) owes a duty-

(a) if the dwelling is provided to the order of any person, to that person; and

(b) without prejudice to paragraph (a) above, to every person who acquires an interest (whether legal or equitable) in the dwelling;

to see that the work which he takes on is done in a workmanlike or, as the case may be, professional manner, with proper materials and so that as regards that work the dwelling will be fit for habitation when completed."

30. The course of the argument in this case has revealed three issues of construction in relation to section 1. The first is whether the relevant "dwelling" for the purposes of the Act is the individual apartment demised to the leaseholder, which may arguably include the balcony of which he enjoys exclusive possession (but which does not form part of the demised property), or whether it is the entire building (or even both buildings) in which the apartment is situated. The positions of the parties are diametrically opposed.
31. The second is what is meant by the words "… in connection with the provision of a dwelling" in section 1.
32. The third is what is meant by fitness for habitation. On this issue there is not, I think, much difference of principle between the parties but there are significant differences of application.

The meaning of "dwelling"

33. There is clear authority for the proposition that "dwelling" is not a term of art and regard must be had to the object of the legislation from which the word appears: see Uratemp Ventures v Collins [2002] 1 AC 301, at 305 (per Lord Irvine), at 306 (per Lord Bingham) and at 307 (per Lord Steyn).
34. Mr. Nissen relied heavily on the Law Commission report "Civil Liability of Vendors and Lessors for Defective Premises" (Law. Com. No. 40) and the distinction drawn by the authors of the report between dwellings, on the one hand, and commercial or industrial premises, on the other. As to this, Mr. Nissen effectively submitted that a particular building must therefore be one or the other and so, if a building is not built for commercial or industrial units it must be a dwelling - all of it.
35. There is a line of cases dealing with shared accommodation, where a person has exclusive use of some living rooms but shares others, such as a kitchen. In the landlord and tenant cases the courts have held that there is no separate dwelling where a person shares living space with others, whereas a right to use communal facilities, such as a WC or bathroom, does not prevent the part of the building of which the tenant had exclusive use being a dwelling. In Uratemp it was not suggested that the dwelling occupied by the tenant, which was a single room, extended to the WC or bathroom which he shared with others. The reasoning was that a WC or a bathroom is a room which one visits for a particular purpose, and would not fairly be described as a living room: see Lord Millett, at [45]-[47]. By contrast, I would regard a broom cupboard or internally accessed cellar in a house occupied by one family as part of that family's dwelling even though no one actually uses either space for living.
36. This line of authority does not support Mr. Nissen's argument based on the Law Commission's report. I readily accept that authorities such as these must be treated with caution when one is considering different legislation with a completely different objective, but in my view they point against the suggestion that parts of the building to which there is shared access can be described as living space, in the ordinary sense of the term, and therefore form part of a dwelling. In the context of the present case I do not derive any assistance from the Law Commission's distinction between residential buildings on the one hand and commercial and industrial buildings on the other. I can find nothing in the report to suggest that it gave any separate consideration to buildings such as residential blocks of flats.
37. The Claimants relied on a decision of HHJ Toulmin CMG QC in Catlin Estates v Carter Jonas [2005] EWHC 2315 (TCC), which concerned a shooting lodge. It was alleged that the lodge was not a dwelling. The judge concluded, at [296], that:

"... a dwelling house is a building used or capable of being used as a dwelling house, not being a building which is used predominantly for commercial and industrial purposes. I have concluded that the claim that the building would have been used as a conference centre was misconceived not least because the covenant imposed by the vendors, Northumbrian Water, was designed to ensure that the building was not used predominantly for commercial purposes."

38. It seems to me that this decision goes to the use to which the building is put, rather than to the question whether a different building, or a different part of the same building, can be regarded as a dwelling house when only one of the buildings, or a certain part only of the same building, is used for the purposes of living.
39. I was also referred to Andrews v Schooling [1991] 1 WLR 783, a decision of the Court of Appeal in a claim under the Act in respect of dampness in a flat that made it unfit for habitation. The defendant had arranged for the conversion of the building into flats but had carried out no work to the cellar. The flat suffered from penetrating dampness emanating from the cellar, which formed part of the flat. The decision is authority for the proposition that liability under the Act can arise out of a failure to do something as well as doing something badly. I do not find the case to be of much assistance in the context of this claim. It was not a case where a claimant was complaining that because her cellar was damp the flat, being otherwise free of damp, was thereby rendered unfit for habitation.
40. I can see no reason why some buildings can be neither one nor the other. For example, suppose a detached house is built on a spacious plot of land and the buildings include a detached stable block and garage. In the context of the Act I would say that the stable block is not a dwelling. I am less certain about the garage, which in a broad sense might be said to be occupied by the owners of the house. It may well be that they are buildings that are constructed "in connection with" the provision of a dwelling, namely the house, but that is a separate point. If the garage roof leaks so that rust-contaminated water drips onto the paintwork of the car parked within, does that mean that the "dwelling" is not fit for habitation? I do not regard the answer as obvious.
41. It seems to me to be stretching the language of the statute to treat the stable block as a dwelling, and probably the garage also, if only for the simple reason that neither provides living space for humans, nor is it an integral part of the structure that does indisputably constitute the dwelling. The leak through the garage roof does not affect the health or comfort of the occupiers of the house.
42. I have no difficulty with the concept that where a house has a built-in garage the whole building can properly be regarded as a dwelling: indeed, that was the position in Bole v Huntsbuild (see below). This tells us that the answer is not to be found by asking; does anyone live in the garage? Clearly, they do not. A more relevant question might be: does the space said to be the dwelling (or part of a dwelling) form part of a single unit with those parts of the premises that are lived in? However, as the cases show, this single unit test does not necessarily provide the answer in the case of, say, a house or flat shared by more than one household. Exclusive possession of a particular space for the purpose of living seems to be a better indicator of what constitutes a dwelling.
43. With these considerations in mind, it seems to me that Mr. Nissen's argument that the entire building is a dwelling faces insuperable difficulties. If a dwelling is the place where a person or household lives to the exclusion of members of another household, as it seems to me that it must be^[1], then I have difficulty in seeing how the occupiers of, say, Apartment 1 can possibly be described as occupying or even sharing the living space that is Apartment 2. Apartments 1 and 2 must on any view be regarded as separate dwellings. In these circumstances I reject the suggestion that the two blocks, or even one of them, can constitute a dwelling within the meaning of the Act. In reality each block is a building that contains a number of separate dwellings.
44. Turning to the facts of this case, I cannot see how the walkways or the basement car park can form part of the dwelling occupied by any particular claimant. The fact that an occupier of an apartment on the first floor has the right to use the walkway on the fifth floor cannot in my view mean that the walkway is part of her living space. It is space that she shares with others, which none of them actually uses as living space.
45. In relation to the basement car park the question can be tested in this way. Suppose that a person exchanges contracts for the purchase of an apartment which, on that date, is in all respects fit for habitation. He then decides to purchase a car parking space in the basement car park. Contracts for the purchase of both the apartment and the car parking space are completed at the same time. However, the car park is quite unfit for parking cars. Does this mean that as at the completion date the apartment has become unfit for habitation? In my view this is a proposition that has only to be stated in order to be rejected.
46. In my judgment, the dwelling for the purposes of section 1 of the Act is the individual apartment as described in the lease together with, possibly, those parts of the building to which the occupiers of a particular apartment have in practice exclusive access for living - such as their balcony. I therefore reject the submission that the common parts form part of any dwelling, still less the whole block. However, for the reasons which I give in the next section of this judgment, I consider that Barr does owe the Claimants a duty under section 1 in relation to the common parts of the two blocks.

The meaning of "… in connection with the provision of a dwelling"

47. It is to my mind self evident that an apartment block such as those at Concord Street cannot be built without foundations, a roof, a structural frame or without suitable access to the various properties in it. Accordingly, it must follow that the structural and common parts of each block represent work that is carried out in connection with the provision of each apartment in the block.
48. More difficult is the question of whether it can be said that the design and construction of the structural and common parts of, say, the North block is work that is taken on in connection with the provision of a dwelling in the South block. In one sense the work is clearly connected because the two blocks were designed and built by one contractor pursuant to one contract and to similar specifications using the same materials. Further, it is clear from CWC's promotional material that the two blocks, with the balcony elevations built facing each other on either side of Concord Street, were intended to create a single attractive environment for each apartment.
49. On the facts of this particular case there is a further connection. By the terms of the leases under which the apartments were purchased the management company is responsible for the maintenance and repair of the common parts of both blocks. Further, each leaseholder is required to pay his or her proportion of the service charge in respect of the maintenance and repair of both blocks. So the leaseholder of an apartment in the South block has a very clear interest in the quality of construction of the common parts in the North block, and vice versa.
50. There is no evidence as to whether Barr knew of the terms on which the long leases would be granted, but it is its submission that the arrangements were typical for developments of this sort. In these circumstances it does not seem to me that it would be unreasonable to extend the scope of the duty to the structural and common parts of both blocks.
51. In the ordinary course of events I would have thought that a structure would have to be either physically or functionally connected with the relevant dwelling before it could be said that it had been constructed "in connection with" the provision of that dwelling. For example, the construction of a separate structure, comprising, say, an electrical substation or an effluent treatment plant, serving apartments in a building would in my view amount to work done in connection with the provision of an apartment in that building. If on completion of the development such an effluent treatment plant did not work properly with the result that no-one in the building could flush a lavatory, that in my view would make the individual dwellings in the building unfit for habitation, at least if that state of affairs persisted for any length of time.
52. In a rather different context, that of the arbitration clauses, the words "… in connection with" have been described as "words of the widest import" (see, for example, Ashville Investments Ltd v Elmer [1989] QB 488, per Balcombe LJ).
53. In my opinion, the application of the section to any particular piece of work is very fact specific. If the work for the provision of the dwelling in question is part of a larger development carried out by the same contractor under the same contract to the same specification, then it is certainly arguable that all the work done in the course of the development is done in connection with the provision of the relevant dwelling.
54. On the facts of this case it seems to me to be an inescapable conclusion that the work to the structural and common parts of both blocks was work done in connection with the provision of each of the apartments in the two blocks, since the owner of every apartment has an interest in and a financial responsibility for the maintenance and repair of the structural and common parts of both blocks. Further, each leaseholder has a right of access to the common parts of the other block.

The standard of design and workmanship

55. The standard set by section 1 is clearly stated. The work has to be done in a professional or workmanlike manner and with proper materials. That suggests that the work must be carried out in accordance with the relevant regulations and standards in force when the work is carried out.
56. In my view it is no answer to say that buildings constructed in a previous era and much sought after as dwellings were built to different standards and therefore such standards should be regarded as acceptable under section 1. Time marches on; so do industrial and professional standards. In my judgment the design or workmanship must be judged by the standards prevailing at the time.
57. It follows from this that if work was badly done in breach of a relevant Building Regulation such that a local authority, if aware of the breach, would require it to be rectified before the building was occupied, that would constitute a breach of section 1.
58. It was suggested by Barr at one stage in this case that if a defect could be remedied at relatively modest cost, its presence could not amount to a state of affairs that would make a dwelling unfit for habitation. I think that Lord Marks thought better of pursuing this point. In my view he was right to do so. For example, suppose that the lavatory in a flat has been installed so that there is no washer between the bowl and the soil pipe, with the result that foul water is discharged all over the floor. If it is the only lavatory in the flat, then in my view any suggestion that the flat was fit for habitation because it would only cost £50 to fit the necessary washer would be unarguable.
59. Of course the cost of any remedial work would be very relevant to questions of mitigation and measure of damages, but that is a different point. There would clearly be a breach of section 1.

The meaning of fit for habitation

60. It is common ground that I am bound to hold that there is no cause of action under section 1 of the Act unless the building is not fit for habitation when completed.^[2] Work that falls short of the standard described in the section does not, of itself, give rise to a cause of action. A cause of action arises only if the result of the defects in the work, when completed, is that the dwelling is not fit for habitation: see Harrison v Shepherd Homes Ltd [2011] EWHC 1811 (TCC); (2011) Con LJ 709.
61. In Bole v Huntsbuild [2009] EWHC 483 (TCC), His Honour Judge Toulmin CMG QC summarised the law on fitness for habitation in these terms, at [38]:

"i) The finding of unfitness for habitation when built is a matter of fact in each case.

ii) Unfitness for habitation extends to what Lord Bridge described as 'defects of quality' rendering the dwelling unsuitable for its purpose as well as to 'dangerous defects'.

iii) Unfitness for habitation relates to defects rendering the dwelling dangerous or unsuitable for its purpose and not to minor defects.

iv) Such a defect in one part of the dwelling may render the dwelling unsuitable for its purpose and therefore unfit for habitation as a dwelling house even if the defect does not apply to other parts of the dwelling. This is also the case under the Housing Act – see Summers v Salford Corporation.

v) The Act will apply to such defects even if the effects of the defect were not evident at the time when the dwelling was completed.

vi) In considering whether or not a dwelling is unfit for habitation as built one must consider the effect of the defects as a whole."

62. The decision was appealed. One ground of appeal was that the judge used the expression "unsuitable for its purpose", which did not appear in the section, so that he applied the wrong test. Dyson LJ (as he then was), giving the leading judgment in the Court of Appeal ([2009] EWCA Civ 1146; [2009] 127 Con LR 154), observed that it might have been better if the judge explained what he meant by a dwelling being unfit for its purpose, but that it was quite clear that he meant unfit for habitation and that he equated "unsuitable for its purpose" with "unfit for habitation".
63. Another ground of appeal was that the judge should have considered each defect individually and determined whether or not it rendered the dwelling unfit for habitation. Dyson LJ rejected this submission in the following terms, at [34]:

"I do not agree. The judge was not obliged to approach the question of whether there had been a breach of s 1 in this case, by considering each defect individually and asking whether that defect, or indeed, that defect taken in conjunction with other individual defects, rendered the dwelling unfit for habitation. He was entitled to ask himself whether the dwelling as a whole was unfit for habitation. The judge found that it suffered from a fundamental defect, namely inadequate foundations."

64. Whilst the Court of Appeal did not expressly approve Judge Toulmin's summary of the law, the members of the court did not dissent from it (apart from the observation of Dyson LJ to which I have already referred). However, and importantly, Dyson LJ did say this, at [28]:

"The obvious purpose of a dwelling is for it to be occupied and inhabited safely and without inconvenience."

And, at paragraph [30]:

"The fact that the doors to the garage could not be locked was a relevant but not the only consequence of [the defendant's] unprofessional work, which made the house unfit for habitation. Part of living in a house is to be able to maintain the security of the home."

65. In Harrison v Shepherd Homes Ltd (see above) Ramsey J said (on page 747 of the report of the case in (2011) 27 Con LJ 709):

"It was common ground that the question of whether a dwelling is fit for habitation is one of fact and degree. In this case there are defects in the foundations which have caused, as set out below, only cosmetic defects in the properties, that is category 1 defects under the definition in BRE Digest 241. This is not a case where the defects have caused category 4 defects as in Bole. It is not a case where significant damage is likely. However, as the claimants submit, the judgment of Dyson LJ at [30] would indicate that security is one of the criteria for fitness for habitation and at [29] there was a reference to inconvenience.

In this case there are essentially two aspects: the defective piles and the damage caused to the properties by the defective piles. Whilst I do not consider that the damage to the properties has rendered them unfit for habitation, on balance, I am persuaded that any significant defects in foundations are properly matters which could be said to give rise to a lack of fitness for habitation. On that basis I would conclude that this is a case where the properties are, to that extent, not fit for habitation."

66. I consider that there can be a breach of section 1 of the Act if, when a building was completed, there were defects that, if left unrepaired, would have the result that the structural integrity of part of the building was subject to a risk of failure at some time during the design life of the building. The decision in Harrison shows that it is not necessary to prove that the risk is such that significant damage is likely: in my view, it must follow that it is sufficient that there are significant defects in the building or part of it which present a real risk to the security of the dwelling during its design life.
67. In the case of defects which do manifest themselves, the authorities have not expressly considered the time within which they must become apparent. In my view this is a matter of fact and degree. I discuss this further below.
68. In my judgment, for a dwelling to be fit for habitation within the meaning of the Act, it must, on completion (without any remedial works being carried out):

(a) be capable of occupation for a reasonable time without risk to the health or safety of the occupants: where a dwelling is or is part of a newly constructed building, what is a reasonable time will be a question of fact (it may or may not be as long as the design life of the building); and

(b) be capable of occupation for a reasonable time without undue inconvenience or discomfort to the occupants.

69. I distil principles (a) and (b) above from the authorities and, in particular, the decisions in Bole v Huntsbuild Ltd and Harrison v Shepherd Homes Ltd. I have added the qualification "undue" to "inconvenience" because I am sure that Dyson LJ would not have intended to include inconvenience that was relatively trivial or which amounted to no more than a minor irritation.
70. It is clear from the authorities that a dwelling may be unfit for habitation even though the defect which makes it so is not evident at the time of completion: for example, defective foundations - as in Harrison. As to what is a reasonable time, that will depend on the nature of the defect. Whereas the brick or stone structure constituting the shell of a building may be capable of lasting for a hundred years or more, one would not necessarily expect the same of the roof or the gutters. I consider that the upper limit of the reasonable time is the design life of the building, but for some components (such as a boiler) it may be substantially less. It seems to me that the test is not how long the component actually lasts, but how long it could be expected to last in the actual condition in which it was at completion. For example, in my view a lift that was installed in such a manner that within a year or two of completion it broke down with monotonous regularity could, subject to the degree of inconvenience caused, mean that the dwelling was not fit for habitation at the time when the work was completed.
71. Further, where the defendant has taken on the provision of the means of access to the dwelling or the common parts of the building in which the dwelling is situated, the inability of the occupier of the dwelling to use the means of access or common parts that serve the dwelling in safety and without undue inconvenience or discomfort may make the dwelling unfit for habitation. For example, if the defendant has carried out the work (being part of the work taken on) so that access to the front door is hazardous, that could render the dwelling unfit for habitation because it presents a risk to the health and safety of the occupants.
72. In relation to the means of access to a dwelling, it seems to me that it goes without saying that a dwelling would not be fit for habitation if there was no means, or no safe means, of access to it, or escape from it in case of emergency. In relation to a building in multiple occupation, the same must apply also to the common parts of that building that serve the dwelling in question.
73. It must also follow, as a matter of principle, that the dwelling should be fit for habitation by all the classes of people who might reasonably be expected to occupy it: this may include, for example, pregnant women, babies and children, and those who suffer from common ailments or allergies, such as asthma or hay fever. (I do not consider here the position of those with particularly severe disabilities, such as the blind or those who are severely physically disabled. Such issues do not arise in this case and so I prefer to say nothing more about them.)
74. If, in spite of the existence of a defect of design or workmanship, the cause of any risk to the health or safety of the occupants is a failure to carry out maintenance or refurbishment work which would rectify that defect - being work of a type that the owner/occupier ought reasonably to foresee to be necessary in the ordinary course of events - the builder is not liable.
75. In the context of refurbishment, it is to be expected that certain elements of the dwelling, for example windows, kitchen or bathroom fittings, floor finishes and so on, may require replacement or refurbishment within the reasonable expected life of the building. Whether or not this is so in respect of any particular element of the dwelling will depend on the facts of each particular case.
76. In deciding whether a dwelling is fit for habitation where there is more than one defect it is not right to consider each of the defects in isolation. It is appropriate to consider whether the dwelling as a whole was unfit for habitation: see Bole v Huntsbuild Ltd.
77. Much was made at the trial on behalf of Barr of the fact that many people willingly choose to live in draughty Victorian houses, the construction of which would in some respects not meet the requirements of today's Building Regulations. That of course is so. But in my view the question of fitness for habitation must be judged at the time when the dwelling in question is constructed. For example, if a local authority would not permit a house built with a view to multiple occupation to be inhabited because it did not comply with regulations that concerned the means of escape in case of fire, then in my view it could be fairly said that the house was not fit for habitation when completed.
78. Defects that might be described as merely cosmetic or stylistic, do not in themselves give rise to any liability under section 1. The mischief at which the Act is directed is the construction of dwellings that are not fit for habitation: it was not intended to compensate owners for the loss of a bargain. Accordingly, a claimant is only entitled to recover the foreseeable loss and damage that flows from the fact that the dwelling is unfit for habitation: see Bole v Huntsbuild Ltd, at [38].
79. So far as mould and damp is concerned, I have discussed the consequences of this in more detail in Appendix E in the context of the external walls. I have no doubt that the presence of mould and damp in living rooms or bedrooms, if persistent and more than minor, renders an apartment unfit for habitation. Damp living conditions are well known to pose a risk to health, and there is evidence from some witnesses of actual risks to health or concern about the potential risk, either to themselves or children.
80. A further theme that ran through many of Barr's submissions was that many of the apartments have been fairly continuously let, which one would not expect to be the case if they were unfit for habitation. Whilst this point has a superficial attraction, it loses much of its force on analysis. The evidence given by the witnesses on this (see, for example, paragraphs 100-101 below), and which I accept, was largely all one way, and was to the following effect:

(a) Tenants were generally unaware of the true condition of the apartments at the start of their tenancy because the landlords redecorated the apartments between tenants, particularly where there were problems with mould and damp. Often they did not become aware of any problems until they had been in occupation for some months.

(b) The apartments were not attractive to young high flyers, and so the majority of tenants were students who found the location of Concord Street very convenient (because the universities were nearby). They often stayed for one academic year only.

(c) Students, particularly some overseas students, appeared more willing to tolerate poor conditions.

(d) Rents were generally lower than for similar apartments elsewhere in the city.

(e) Void periods between lettings tended to be longer than elsewhere owing to the need to carry out more extensive refurbishment.

81. Apartment No. 156, which is discussed in more detail below, illustrates the point. I did not understand Barr to submit that it was fit for habitation. Plainly, it was not - yet it was occupied by a family who appeared to have been there for at least a year.

Conclusions on the meaning of section 1

82. In the light of my consideration of the authorities, I propose to approach the issues in the case with the following principles in mind:

i) Each individual apartment, together with its balcony, constitutes a separate dwelling within the meaning of the Act.

ii) The common parts and the basement car park do not form part of any particular dwelling.

iii) However, the construction of the common parts and the basement car park constituted work carried out for or in connection with the provision of a dwelling (namely, each apartment) so that the duty imposed by section 1 of the Act applies in respect of it.

iv) When considering whether or not an apartment is fit for habitation, its condition has to be considered at the date when the work was completed (which I consider extends to the end of any relevant defects liability period).^[3]

v) The defects in any particular apartment must be considered as a whole when determining whether or not that apartment was fit for habitation on completion.

vi) The apartments must be fit for habitation by all the types of person who might reasonably be expected to occupy them, including babies and those who suffer from common conditions such as asthma or hay fever.

vii) Whether or not an apartment is fit for habitation is to be judged by reference to the standards current at the time when it was built.

viii) If, at the time of completion, the state of an apartment is such that a local authority with knowledge of its condition would not approve it as fit for occupation under the Building Regulations (for example, for lack of suitable means of escape in the case of fire), it is probably unfit for habitation.

ix) The fact that a particular defect which renders an apartment unfit for habitation could be remedied at relatively modest cost, does not of itself mean that there is no breach of duty under section 1. That is relevant only to the measure of damages.

x) A defect may render an apartment unfit for habitation even though both the owner and the builder were unaware of its existence at the time: for example, defective foundations.

xi) A state of affairs that arises only because the owner does not carry out or has not carried out maintenance or refurbishment that a building owner would reasonably be expected to carry out, even if that state of affairs would not have arisen but for the presence of a defect created by poor design or workmanship in breach of section 1, does not mean that the apartment was unfit for habitation when completed. However, if the need to remedy the defect would make normal maintenance a waste of money, or render it abortive or futile, the failure to carry out such maintenance is unlikely to negate the breach of duty.

xii) Serious inconvenience that is not transient may make a dwelling unfit for habitation. For example, a lift in a tower block that was poorly installed so that it frequently broke down could well make apartments on the higher floors unfit for habitation.

xiii) A risk of failure within the design life of the building of a structural element of the dwelling (or of the building of which the dwelling forms part) which exists at the date of completion (whether known about or not) may make the dwelling unfit for habitation.

xiv) Evidence of a need to vacate the dwelling in order to carry out work necessary to remedy work that was done in breach of the standard set by section 1 of the Act, is relevant to the question of fitness for habitation.

83. The application of these criteria will be very fact-specific in any particular case.

Representative proceedings

84. The Claimants claim from Barr the full cost of the remedial works to the common and structural parts and, for this purpose, they claim that cost under CPR 19.6 as representatives of all the owners of apartments in Concord Street who are not party to these proceedings. This claim is made in both the Claim Form and at paragraph 28 of the Amended Particulars of Claim. As I have already mentioned, numerically the apartments owned by the Claimants' represent about 70% of the total number of apartments in the development.
85. CPR 19.6 provides as follows:

"(1) Where more than one person has the same interest in a claim –

(a) the claim may be begun; or

(b) the court may order that the claim be continued,

by or against one or more of the persons who have the same interest as representatives of any other persons who have that interest.

(2) The court may direct that a person may not act as a representative.

(3) Any party may apply to the court for an order under paragraph (2).

(4) Unless the court otherwise directs any judgment or order given in a claim in which a party is acting as a representative under this rule –

(a) is binding on all persons represented in the claim; but

(b) may only be enforced by or against a person who is not a party to the claim with the permission of the court."

86. No application has ever been made by Barr under CPR 19.6(3). Accordingly, the Claimants submit that the Claim continues as a representative action.
87. The Claimants do not claim to represent the other leaseholders for their losses in respect of internal defects, and so they submit that there is no divergence of interest between the two classes of leaseholder. They share common heads of loss, even if the Claimants seek additional heads of loss. The Claimants submit that it does not adversely affect unrepresented leaseholders that the Claimants make those additional claims.
88. For the reasons that I have already given, it is unquestionably the case that proof of damage, namely unfitness for habitation, is an essential ingredient of the cause of action under the Act. On this point I consider that no two owners have the same interest on the facts of this case. The owner of Apartment No 1 is not concerned with whether or not Apartment No 2 is fit for habitation. His claim may succeed and that of the owner of No 2 may fail, even though both of them have the same complaints to make about the defects in the construction of the common parts.
89. It might be different if the complaint by the leaseholders was, for example, in respect of defects in a central heating system that supplied all the apartments with the result that during cold spells the occupiers found themselves without heating. I can see that in those circumstances, where the effect of the defect was the same on everyone, there might be room for a representative claim. But those are not the facts of this case.
90. In Emerald Supplies v British Airways [2011] 2 WLR 203, counsel for the claimants had to argue that damage was not a necessary element of each claimant's cause of action. That was, I think, a correct recognition of the fact that if damage is an ingredient of the cause of action a representative claim could not be maintained. Counsel's submission was that it was sufficient that there was a common interest in achieving an outcome and no conflict between the members of the class in respect of some common ingredients of the claim.
91. The Court of Appeal concluded that the fact that a defence was available to British Airways in relation to the claims by some claimants, but not to others, showed that the claimants did not have a common interest. In this case Barr has a good defence to the claim by any owner who cannot show that his or her apartment is unfit for habitation in spite of the existence of the defects to the common parts.
92. Barr also makes a similar point in relation to the claim by West Register, a subsidiary of the Royal Bank of Scotland, who is the owner of 22 apartments which were never sold. Barr submits that by virtue of an agreement made between it and the Bank it would have a defence against any claim brought in respect of the apartments owned by West Register, since it was agreed that West Register would withdraw its claims in this action and has done so (see paragraph 237 below). This may not be a very attractive answer to the representative claim so far as the West Register apartments are concerned, but in my judgment it is a good one.

The witnesses - owners/residents

93. The evidence of the owners and occupiers of the apartments is summarised at Appendix A. It was an impressive body of evidence, made even more so by the manner and moderation in which it was given in spite of the unhappy and depressing experience of being an occupier or owner of an apartment at Concord Street to which they had all been subjected. All the witnesses were plainly honest and I have no hesitation in accepting their evidence, subject only to the rare instances when it was retracted in cross examination.

The witnesses - non-owners/residents

Called on behalf of the Claimants

Mr. Paul Atkinson

94. Mr. Atkinson describes himself as the caretaker of Concord Street, although it is clear that he does far more than would usually be expected of a caretaker and that he is suitably rewarded for it. In 2007 Mr. Atkinson was made redundant from his position as a business development manager for a catering company. In January 2008 he accepted employment as a temporary cleaner at Concord Street whilst he looked for other employment. To cut a long story short, within a few months he was offered £3,000 per month to provide cleaning services to the two blocks. On 19 May 2008 he set up a company, PGA Property Solutions Ltd, through which he provided his services, at least initially. As time went on he involved himself increasingly with the problems experienced by the occupiers of the individual apartments and in due course was asked by several of the leasehold owners to take on the management of their apartments.
95. He now manages about 60 apartments, for which he charges a management fee of 7% of the rent. However, he says that in reality he looks after nearly all the apartments in one way or another. In addition, he manages two other small blocks of flats in Leeds and some individual flats in another building. He is clearly hardworking and able and, by his own efforts, has made himself almost indispensable to those responsible for the management of Concord Street. He is not a builder, but he can do basic DIY tasks and often carries out minor repairs to both the common parts and individual apartments. For more challenging work he employs appropriate specialists.
96. He was subjected to sustained cross-examination, much of which was, directly or indirectly, an attack on his credit. Whilst he gave answers on two or three occasions of whose accuracy I was sceptical, I thought that on the whole his evidence was credible and reliable. It was quite clear that he knew a great deal about Concord Street, and he was almost invariably able to identify the owner of any particular apartment. On a day to day basis the development is managed by him and Ms. Lisa Kaye. She deals with the administration and financial aspects of the management, such as collecting the service charge and paying bills. She used to work for CWC and was subsequently taken on by the management company. She and Mr. Atkinson work closely together and, indeed, subsequently embarked on a relationship in which I understand they still remain. I reject entirely the suggestion that he has neglected the maintenance of Concord Street. Taking the evidence as a whole, I think it is clear that Mr. Atkinson has done the best that he could in very difficult circumstances.
97. Mr. Atkinson explained that he and Ms. Kaye spent the first twelve months or so firefighting. The agents who were originally employed to collect the service charge failed to collect it efficiently and, it seems, then went off with some of the money that they had collected, leaving the management company in a parlous financial situation. However, things have improved somewhat and the management company now has a reasonable sum in reserve to deal with major items of expenditure, although nothing like enough to address the major problems at Concord Street such as, for example, the roof.
98. Some of the more significant problems described by Mr. Atkinson were as follows:

i) The failure of the intercom to work properly. In some apartments it seems that it does work, or at least did work for some of the time, whereas in many apartments it has never worked at all or, at least, not for many years. Mr. Atkinson and others think that the fault lies in poor wiring. It has never been repaired because no contractor would undertake to leave it in working order in the light of the uncertain position about the wiring. He understood that to rewire the system completely would cost of the order of £250,000 and so what has now been done is to replace it by some form of wireless system that connects directly to the mobile phone of a resident. While such a system has its advantages, it also has its disadvantages. Mr. Atkinson explained that it took about 15 minutes to programme the system with a new telephone number for a resident (which he has to do by taking his laptop outside and standing in front of the door). Of course if a resident's mobile has an interruption of signal or a flat battery, then the system will not work.

ii) Excessive damp and mould on the front and rear walls of many apartments, particularly around the glazed doors to the balconies and in some of the bedrooms facing onto the walkways. Mr. Atkinson said that at some point every apartment that he had entered had had a problem with mould and damp. He said that it was not necessarily limited to one part of each apartment. He said that it could be hidden for a limited time with "a lick of paint", and that this would usually enable him to let the apartment.

iii) There has been widespread failure of the shower trays. The problem is that the mastic seal between the wall tiles and the shower tray fails on a regular basis. In many apartments this has resulted in a build-up of water in the void below the shower tray causing the surrounding area to become fairly damp. Mould then develops on the walls that back onto the shower room and on the mastic and grouting of the shower cubicle itself.

iv) Another internal defect is doors in the apartments not fitting properly into their frame and either becoming difficult to open or no longer able to remain closed (because the keep of the latch has moved with reference to the tongue of the lock). He said that he had been called to go into apartments to help people who had been trapped in the bathroom or lounge.

v) The external walkways are exposed to the weather because the glazed cladding panels are open for the top foot or two with the result that rain and snow can collect on the walkways if they are not properly laid and drained. In fact, the walkways have not been laid to proper falls and there is no adequate drainage to carry away the water: the drain, such as it is, has a lip which is higher than the level of concrete on the walkways. The result is extensive ponding of water after substantial rainfall and, on occasions in winter when it freezes, this turns to ice.

vi) There was a serious problem with leaks from the penthouse balconies into the apartments below. It appeared that the drainage was defective and water was overflowing from the balconies. This caused water ingress and staining above the balcony doors in a number of apartments on the fourth floor. A decision was taken to install aluminium trays on the balconies, and this was then done in the case of 18 apartments at a cost of just under £25,000. Mr. Atkinson says that this was a temporary solution, and whilst the problem was significantly reduced it was not eliminated.

vii) A further problem in relation to water ingress arose in relation to the main roof. The first apartment where this was reported was No. 158, where water appeared to be collecting in the bulkhead above the balcony door. Mr. Atkinson said in his witness statement that he went on to the roof with a builder that he knew, Mr. Harris, and an owner, Mr. Watson. They opened up one of the roof panels immediately above the apartment which revealed that there was little insulation, and that what was in place was totally saturated. In addition, the roof steelwork was wet and covered in rust. A decision was taken, now criticised by Barr, to install a vent into the roof space in order to provide ventilation and reduce the condensation. Similar problems arose subsequently in at least four other apartments.

viii) The render to the external walls is cracked in many places, and at some points it has started to fall off.

ix) The external glazed cladding to the walkway elevations has been fitted back to front. This was intentional and was to avoid difficulties in replacing any broken glass panels, because of problems with access. However, this cladding incorporated an internal drainage system designed to throw the water away from the building. Of course, the effect of turning it round has been that the surface water is now discharged into the building, and this is particularly bad at lower levels. The consequences of this are aggravated by the absence of any proper drainage system to the walkways.

x) As a result of this defect in the glazing, and some other causes, water leaks into the basement car parks of both blocks. The North Block is particularly bad. There are stalactites on the ceiling which drip lime onto any car parked below and water ponds in the lowest parts.

99. In relation to this last point, I find as a fact that in the North Block the water can be several inches deep after heavy rainfall, so that residents cannot get access to their cars unless they have waterproof footwear. Overall, Mr. Atkinson's evidence on these points was supported by the evidence given by the residents and owners and I accept it.
100. Mr. Atkinson also said in his witness statement that there was an "incredibly high turnover of tenants" and that "up to 80% of tenants will only stay for 6 to 9 months". He put this down to the type of tenant that Concord Street now attracts, namely students and overseas visitors, and to the fact that the mould and damp in the apartments would usually resurface about six months after redecoration between tenants. At paragraph 148 of his witness statement, he summarised the position in this way:

"On paper the apartments are excellent value for money, which is why in the short term you can easily rent them out. When there is a changeover of tenant I will paint over any problems with damp, re-seal the shower tray and make sure the apartments are presentable for any viewings. So long as it has not been raining then it is not too difficult to rent the apartments out, at least for the short term. It is only once the tenant has been in the apartment for 6 to 9 months the problems start to reappear and I usually then received complaints or the tenants simply move out. I will then simply turn the apartment round ready for the next one. Unfortunately, I do not see this lasting forever as at some point I will be unable to paint over the mould (this is starting to happen now) nor will extra sealant work. The problems are progressive and at the present time we are fighting a losing battle. We are simply holding the Development together with a bit of sealant and paint. I foresee major problems within the next few years when we are unable to paper over the cracks any more."

101. During the course of his cross examination Lord Marks put to Mr. Atkinson an e-mail in which Lisa Kaye had said that the apartments "shoot out of the door", a comment with which he agreed. However, Mr. Atkinson elaborated on his response by saying "… but they soon became vacant again when they realise what they have got inside there" (Day 4/101). Taking the evidence as a whole, I consider that the passage quoted in the paragraph above is probably a realistic assessment of the position, at least so far as one can judge from the apartments that have been the subject of detailed investigation at the trial. I do not consider that it is necessarily true of every single apartment - there are clearly a few exceptions - but in general terms it accords with my own findings.
102. One thing that emerges perfectly clearly from the evidence as a whole is that Mr. Atkinson is essential to the functioning of Concord Street. Those owners and residents who were asked about him had nothing but praise for what he did, and I reject any suggestion that the deterioration of the buildings at Concord Street is the result of any neglect, inattention or poor management on his part. On the contrary, but for his presence I am sure that they would be in a far worse condition than they are.

Mr. Philip Goffin

103. Mr. Goffin was employed as a trainee architect by Browne Smith Baker ("BSB"), who were engaged by the developers, City Wall. He was initially a member of the team working for City Wall, but their services were subsequently "novated" to Barr. Thereafter BSB's client became Barr, and their role, essentially, was to develop Barr's proposals, the coordination of the design development, to obtain approval from Building Control for the design and to secure the approval of the planning department to the changes in the specification that were being sought by Barr in order to meet City Wall's budget. It is apparent that Mr. Goffin had a significant role in relation to the latter function.
104. Although Barr was subsequently engaged on a design and build basis, BSB prepared design drawings on behalf of Barr - but its design role was constrained to working within the framework of Barr's proposals for the development. Mr. Goffin's involvement with the planning department, most of which seems to have involved persuading its officers to agree to Barr's reductions in the quality of the specification in order to achieve the required cost savings, lasted about ten months. Mr. Goffin explained that this was his first involvement in a design and build project and until then his experience had been limited to office based work such as preparing the planning drawings, feasibility studies and so on. He said that he would not have acted as he did on this project if he had had experience that he has now.
105. I consider that Mr. Goffin was a candid and truthful witness, in spite of his slightly exasperating tendency to meet every question with a short speech. In the course of cross examination he admitted - without being prompted - that he was very ashamed of the detail of the steel balcony supports and the method by which they were fixed to the main structural steelwork. He said that on one occasion following a visit to site he was so upset by what he saw in respect of the way that this detail had been constructed that he tendered his resignation when he returned to the office. However, he was urged to reconsider his decision over the weekend and was subsequently talked out of it when he returned to work the following week.
106. He was then challenged by Lord Marks with a letter written by a Mr. Westgate, of City Wall, in which Mr. Westgate reported that during a visit to site on 16 June 2005 to investigate a reported leak with, amongst others, Mr. Goffin and a representative of Barr, he had been told by Mr. Goffin that he was satisfied with the balcony support junction detail. Mr. Goffin accepted that he had said this. He told the court that he did not have the courage to tell the developer in front of his client, Barr, about his concerns - construction by then being very far advanced. He said this (Day 2/138):

"A. If I can be so blunt as to say that I don't believe I was under oath then and I'm under oath now, and I'm telling you categorically that I didn't have the courage to say it then and I have to say it now. I feel obliged to say it now and I have said it today.

Q. So being untruthful to your clients was all right?

A. I didn't have the courage to front up against Barr, the site management and everything else that was going on at the time, to say that that detail was not in my opinion appropriate. Despite that, even as the detail was carried out as drawn, so that it would have no imperfections, we can see quite clearly from the building that the detail is not - the workmanship around those brackets is not very good, despite what the detail was drawn or not [sic]. That is a shortfall [sic] from not being able to get close enough to the balcony brackets, the systematic layering of a building, which I now appreciate as a more experienced person."

107. I accept this evidence. It was unprompted and I can see no reason why Mr. Goffin should have lied about it: it was, after all, hardly to his credit. He said also that when the floor slabs were first cast he questioned the state of their alignment, and was firmly told by the Barr team "You mind your business, we will worry about the quality on this site" (Day 3/144). He said that from then on he would confine himself to checking drawings, making sure that dimensions fitted and work of that type. His evidence about this was not challenged and I accept it.

Mr. Mark Goulding

108. Mr. Goulding was called as a member of the management company. He owns two one-bedroom apartments: No. 14, which is on the first floor of the South Block, and No. 78, which is on the fifth floor of the South Block. He bought the two apartments as an investment on the basis of the brochure that was produced by CWC and the promise of a high specification. He did not see the promotional video. He also purchased two parking spaces. As I have mentioned in Appendix A, Mr. Goulding was not only an intelligent and thoughtful witness, but also a scrupulously careful one. I accept his evidence without reservation.
109. Mr. Goulding was asked about the management company's policy in relation to redecoration. It was suggested to him that the reason why no redecoration had been carried out was because the committee was awaiting the outcome of this litigation. Mr. Goulding disagreed with that. He said that decorating was really a cosmetic exercise and that there were serious problems that cropped up from time to time for which the management company needed to keep money by: for example, repairs to the roof, the erection of emergency barriers across areas of defective glazing and so on. Mr. Goulding said that the money needed to carry out all the necessary repairs was well beyond the scope of anything that could be raised from the leaseholders.
110. It was also suggested to Mr. Goulding that the render had not been painted because it might cover up flaws. Mr. Goulding's response was to say that he was not aware that the render had to be painted: he thought that it kept its colour. He was very surprised at the suggestion that the render would have to be repainted every five years. Mr. Goulding thought that the redecorating obligation in the lease applied to internal walls, woodwork and the like. He said that the management company have now introduced a £25,000 annual maintenance contingency for unexpected major repairs which, if not used up, was added to the reserve fund.
111. When it was put to Mr. Goulding that the deterioration in the condition of the building was the result of a lack of maintenance he said:

"The deterioration that I'm referring to there is damage caused by water ingress due to defects in the roof, due to defects in the glazed walkways and damage to the render, cracking to the render, blowing of the render joints and so on. That is cosmetically unpleasant and it is deteriorating."

112. He also disagreed strongly with the suggestion that there had been no real change to the building over the last few years. He said that the building was deteriorating rapidly. He thought that what the management company had done went above and beyond what would be expected for a normal city centre development in Leeds.

Mr. Anthony Priceman

113. Mr. Priceman owns and lives in a two bedroom apartment at No. 35, on the third floor of the North Block. The purchase, from the Royal Bank of Scotland, was of a repossessed property and was completed in December 2009.
114. Mr. Priceman is a member of the board of the management company, and the only one who is an owner occupier. He described himself as its "eyes and ears on the ground". He explained that the management company had a contract with a contractor to clean the balcony glazing and the external windows to the atrium. He said that it was done from a lorry with a cherry picker. However, the contractors did not clean the walkway glazing on the other side of the buildings because there was no access for a vehicle.

Mr. Barry Wood

115. Mr. Wood is the owner of a studio apartment, No. 133, which is on the third floor of the North Block. Originally from South Africa, he retired a few years ago from a career in teaching and lecturing in English literature and related subjects, and is now 70. He came to the UK in 1983 together with his wife. They have never lived in the apartment, which has been let since May 2006. For ease of reference, I summarise here those parts of his evidence that related to the running of the management company (but they will also be found in the summary of his evidence in Appendix A).
116. Mr. Wood is a member of the management company and appears to act as its de facto chairman. He explained in cross examination that the managing agents initially appointed, Accent Property Services, were very unsatisfactory and that the management of the properties was then taken over in late 2007 by a Mr. Craker, who was associated with CWC. He was assisted by Lisa Kaye. He said that Mr. Craker appeared to have good intentions but was not in a position to honour some of the promises that he made to the residents. As he put it, by then there was a clear dispute between CWC and Barr and they "limped along". Problems were aggravated by the fact that CWC, which had not sold some 20-odd apartments, was not paying its share of the service charge in respect of the unsold apartments.
117. When it was suggested to Mr. Wood that the management company had put normal planned maintenance on hold pending the outcome of the litigation, Mr. Wood said (Day 9/161):

"When you have to administer any sort of budget you have to decide what your priorities and how and when you will address your responsibilities. So to the extent - I mean there are some, the thorny issue of redecoration keeps cropping up, but we want to redecorate and we will redecorate, but that has to be at an appropriate moment when we have got to the bottom of the problems and they have been rectified. Then of course we will redecorate."

118. However, Mr. Wood agreed that some maintenance had been put on hold so that the underlying defects could be properly documented by the experts. In relation to the new mobile phone based intercom, Mr. Wood said that he regarded it as the compromise solution but they chose it because it was affordable. So far as the legal costs are concerned, Mr. Wood said that the costs of the litigation were being shared between those who were taking part in it. He explained that the costs initially incurred, which were the costs of initial investigations into the condition of the building, together with the initial legal advice about the merits of the claim, were charged to every leaseholder because each one would have to take a decision as to whether or not to become a claimant. However, once a decision to embark on litigation had been taken and certain owners had decided to become claimants, only those leaseholders bore the costs of the litigation.
119. In his final question to Mr. Wood Lord Marks suggested that from 2010 to 2013, indeed into the current year, the maintenance strategy pursued by the management company had been essentially driven by this litigation. Mr. Wood's reply was as follows (Day 9/192-3):

"No, I think that distorts it entirely, just as it is a distortion to say just because we don't have a conventional document I mean, it doesn't mean we haven't a strategy or that we aren't responsibly addressing what is possible by way of normal maintenance, and I don't think it is fair to use the word "reactive" in its most pejorative sense to suggest that we don't care and that we are being irresponsible and that we improvise as we go along.

Our policy and our practice has to be determined by the condition of the building and our attempts to deal with it as best we can."

I accept this evidence.

Mr. Watson

120. Mr. Nicholas Watson is a director of the Concord Street management company ("the management company"), to which he was appointed on 2 August 2010. He is an architect and was previously employed by BSB, where he knew Mr. Goffin. His role in the project was peripheral in that it was confined to document compliance, rather than to the design or construction of the buildings. He bought three apartments off plan since, as an employee of BSB, he was entitled to a discount. He managed to sell one of these in late 2004 at a profit of about £27,000, but his efforts to sell the other two (Nos. 127 and 163) were unsuccessful and so he still owns them.
121. His evidence in relation to the problems with these two apartments is summarised in Appendix A. In this part of the judgment I will deal only with his evidence insofar as it relates to the management company and only to the extent that I have not summarised it in that part of this judgment which deals with the conduct of the management company.
122. In his witness statement Mr. Watson explained how he decided to buy the apartments on the basis of the promotional brochures and a DVD produced by CWC. He said that prior to construction Concord Street was marketed as a "first class apartment complex for high flyers".
123. During the period shortly after completing the purchase of his apartments in 2006 Mr. Watson said that he became increasingly concerned with the problems that were being identified at Concord Street. He said that the general feeling at the time amongst the residents was that those responsible for the maintenance of the buildings were not keeping up with their job. He said that at the meeting that took place on 28 January 2008 the owners and residents were told that Accent, who had been acting as agents for the management company, had walked away from the contract as a result of the problems that they had experienced with the buildings. A Mr. Richard Craker, of CWC, had taken over the running of the management company and told the residents that CWC had made a claim against Barr in respect of the defects.
124. Mr. Watson said that in spite of these developments, by January 2009 matters had not improved. He said that the management company was not managing to keep on top of even basic cleaning and maintenance, let alone repairs. The upshot of this was that five owners or residents volunteered to become members of the board of the management company, and their names were finally registered at Companies House on 2 August 2010 and their appointments were formally approved by the shareholders as a whole at a meeting on 22 November 2010. At the same time Mr. Atkinson and Ms. Kaye resigned from the board and started to work under the direction and control of the management company. He explained that Mr. Atkinson supervised the cleaning and undertook minor repair works, as well as doing work to various apartments on the half of their owners.
125. Mr. Watson explained that the policy of the management company was to carry out all routine maintenance that was required together with the remedial works that were necessary and affordable in order to keep the apartments habitable. He said that in many cases this had to be done on a temporary basis pending permanent repairs.
126. He also explained how in February 2010 he took part with Mr. Atkinson and Mr. Harris in an investigation into the condition of the roof following water ingress into No. 158. When the ceiling was opened up it was found that the roof liner sheet was covered in what Mr. Watson described as "running condensation" which was dripping onto the plaster over the balcony door causing rapid deterioration of the plasterwork in that area and water to collect on the floor on the inside of the balcony window. He said that it was his idea to install a vent in the outside wall to provide some ventilation in the space between the liner sheet and the suspended ceiling and thereby minimise condensation. He accepted that this solution substantially reduced the thermal performance of the apartment and led to it being more expensive to heat.
127. In relation to his own financial position, Mr. Watson said that he had had his two apartments on the market for some nine - twelve months but had been unable to sell them. He said that he owned another two-bedroom apartment in the city centre of Leeds for which he obtained £750 per month in rent, compared with £600 per month at Concord Street. He said that in relation to No. 163 it was not possible to avoid having void periods between tenants because it was necessary to remove the water marks in the living room and let the area dry out.
128. Mr. Watson was cross-examined about the policy of the management company in relation to maintenance and remedial works and I have set out some extracts from his evidence in the section of this judgment concerned with the management company.
129. Overall, I consider that Mr. Watson was a reliable and plainly honest witness and I accept his evidence.

Mr. Harris

130. Mr. Harris gave evidence by video link from Florida. He is a builder who inspected the roof following a complaint of moisture ingress into a penthouse apartment (No. 158). He has been a friend of Mr. Atkinson for some years.
131. In his witness statement he said that when he went into that apartment he noticed damp and mould on the walls around the balcony doors and in the middle of the living room ceiling. He said it looked as if there was a significant amount of water in the roof void above the apartment and that this was saturating the plasterboard ceiling.
132. They decided to cut a hole in the ceiling directly above the balcony door. This showed that the roof space was very wet, with mould present in a number of places and condensation on the roof steelwork. They decided next to inspect further from the roof itself. Having lifted one of the roof panels, he described the insulation as virtually non-existent and that where it had been laid it had either been done incorrectly or was not sufficiently thick. In addition, it was saturated. He noticed also that there was no liner sheet on the lower metal tray.
133. It was after that visit that it was decided to install a vent in the wall giving on to the roof space in order to reduce the condensation by providing some ventilation. However, it was accepted at the time that this would turn the roof void into a cold space with the result that this would make the apartment below more difficult and expensive to heat. He said in his witness statement that in all his years of working in the construction industry this was "… without doubt the worst example of a roof I have ever seen". Mr. Harris took a number of photographs which provided confirmation of much of what he had said in his witness statement about the condition of the roof.
134. He described a further occasion when Mr. Atkinson asked him to investigate a further problem with water ingress into some fourth floor apartments. He visited Concord Street when there was a considerable amount of snow on the main roof. They went into apartment No. 63 where they saw water running (in cross examination he described it as "cascading": Day 8/111) down the side of the walls and coming in above the balcony door before pooling on the living room floor: he said that the occupier had put buckets out to catch the water by the time they arrived. They then inspected the balcony above on which there was a considerable amount of standing water. One problem was that the downpipe from the main roof gutter discharged onto one side of the balcony whereas the outlet was at the other end. He said that closer investigation showed that there was no adequate waterproofing system to the balcony so that the water could seep into the building below. This led to the solution of fabricating and installing specially made aluminium trays to hold the water. Mr. Harris said also that these were never intended as a permanent solution, only a temporary one (Day 8/113). He said that in order to achieve a perfect seal the asphalt would have to be dressed up under the cill under the balcony door. In addition, the downpipes from the gutters were re-routed.
135. Mr. Harris said that he recalled that Mr. Atkinson did not have a good head for heights. This confirmed Mr. Atkinson's evidence to the same effect and that he (Mr. Atkinson) only went on to the roof very briefly. This evidence had been challenged (quite properly) in cross examination because in his witness statement Mr. Atkinson had referred to going onto the roof and lifting one of the roof panels. Mr. Atkinson said that this was not correct because he only went on to the roof very briefly and did not assist in the lifting of the panel.
136. I found Mr. Harris to be an honest and impressive witness and I accept his evidence, although I suspect that his remark about the roof being the worst he had ever seen was based in large measure on the fact that he only inspected the edge of the roof, which was undoubtedly where the workmanship was at its worst.

Mr. Ramsden

137. Mr. Ramsden had worked as a general handyman since about 2008, although for 19 years he had worked as a scientific glassblower until the company for whom he worked had closed down that department. He started to work for a company that carried out general maintenance of residential properties at the request of landlords or letting agents. In August 2012 he began to work for himself and has carried out a number of jobs at Concord Street, mainly in connection with the showers.
138. The first apartment that he recalled visiting was No. 142 (not a lead or B2 apartment). He said that there was an overwhelming smell of damp, which appeared to be caused by a leak around the shower area. He said that the plasterboard to which the tiles were fixed was saturated and no longer of any use. He described the problem as being one of "ill fitting shower trays", which led to the failure of the bottom row of tiles creating a significant gap between the shower tray and the tiles.
139. Although he had devised what he described as a temporary fix, involving the fixing of a 4 inch PVC trim and silicone at the joint between the shower tray and the tiles, his preferred solution was to carry out a complete refurbishment of the shower cubicle, including the strengthening of the floor below the shower tray. This involved the occupant of the apartment having to move out whilst the work was being done.
140. In his witness statement Mr. Ramsden said that he had worked in a number of apartment blocks in Leeds, but that it was only at Concord Street where it had been necessary to carry out a total redesign of the shower area in order to remedy the leaks. On this aspect, the evidence was all one way: no-one suggested that the problems with the leaks around the shower trays at Concord Street were remotely typical of the situation at similar developments. That is certainly my conclusion.
141. Mr. Ramsden had also carried out other general work, such as planing down internal doors in order to make them fit and thereafter filling the cracks above the door frames.

Ms. Green

142. Ms Charlotte Green is a maintenance and property manager employed by Hunters Estate Agents ("Hunters") and she works from the York office. She started working for Hunters in 2005 in the Leeds office, during which she visited Concord Street on a number of occasions. She said that she was very familiar with the various properties that Hunters managed in Leeds City Centre. Hunters currently manage 13 apartments at Concord Street, although at various other times in the past they have also managed about 35 others.
143. She said that since Hunters started managing the apartments at Concord Street in 2005 there had been almost constant issues with leaks in the shower rooms. She said that a number of shower rooms had been infested with silverfish. She said that in many apartments which were affected by this there had been a constant battle to try and prevent the regrowth of mould after resealing and re-grouting in the shower cubicles. She gave an example of one apartment, No. 52, which had been resealed in May 2008, August 2010, September 2011 and May 2012, in spite of which they were still finding that entire shower room walls were covered in black mould. This was one of the apartments that had a problem with infestation by silverfish.
144. Ms. Green said that as part of their efforts to deal with the problems of mould they advised tenants when they moved into the apartments of the importance of doing everything they could to keep the apartment well ventilated. It was Hunters policy to visit apartments under their management on a quarterly basis. She described the extent of the problem with mould at Concord Street as "far from normal" when compared with other developments in Leeds City Centre.
145. Ms. Green explained in her witness statement that when the apartments at Concord Street were first completed many of them were rented by professionals who then stayed for up to two or three years. She said that these tenants left as a result of the problems with the apartments and so the apartments managed by Hunters are now generally let to students, with the result that they can be let much more easily if they become vacant between August and October. She explained in her witness statement that there was a development near Concord Street called Aspect 14, which is recommended to students from Saudi Arabia by their embassy. Those who cannot lease an apartment in Aspect 14 go to Concord Street as a second choice until an apartment at Aspect 14 becomes available. She said that against this background it was fortunate that Concord Street was situated near to the universities in Leeds, because if this had not been the case she did not think that it would be possible to rent out the apartments at all.
146. Ms. Green said in her witness statement that the rents achieved from the apartments had decreased quite significantly since the time when they first came on the market, and even then they were relatively cheap. She said that, in general, for apartments in the city centre it was Hunters policy to try to increase the monthly rental by about £25 every six to twelve months, but that this was simply not possible at Concord Street.
147. In cross-examination Ms. Green was asked about one particular apartment, No. 98. She agreed that no work appeared to have been carried out to that apartment between 2006 and 2009, save for some work in relation to the bathroom in late 2009. In October 2010 new tenants moved in and there was a report that some tiles were loose. These were refitted and a PVC trim was fitted to cover that area. Since then, there appears to be no record of any further work carried out to that apartment.
148. She confirmed also, in relation to apartment No. 52, that there had been a problem with serious mould in 2011 that had not been reported by the tenants (Day 8/24). When it was suggested to her that it was a common problem with tenanted apartments that the less assiduous tenants would let problems develop without reporting them, she said that she thought in the case of that particular apartment the tenants who were in place at the time were two Chinese students whose expectations might have been different.
149. Ms. Green agreed that the main issue with the apartments (excluding the penthouse apartments), so far as Hunters as agents were concerned, was the problem of leaks from the shower trays and condensation and mould. She said that in her experience the mould was always on the walls around the shower rooms.
150. Ms. Green said that in many apartments in Leeds there was either very limited or no outside space where tenants could dry clothes, so that they did tend to dry them either in a spare bedroom or the living room. In this respect, there was nothing particularly unusual about Concord Street.
151. I found Ms. Green to be a reliable, straightforward and honest witness and I have no hesitation in accepting her evidence.

Miss Warr

152. Miss Diana Warr is the Residential Letting Manager of Sanderson Weatherall's office in Leeds, a position that she has held since 2005. She is responsible for managing a rental portfolio of approximately 250 properties. Sanderson Weatherall currently manages ten apartments at Concord Street and, in the majority of cases, had done so since the apartments were completed.
153. She said in her witness statement that issues arose in relation to several of the apartments very shortly after completion, and as early as September 2005. She says that she remembered being surprised by the nature and extent of the repairs required as in her view they went far beyond the ordinary snagging issues which one might expect with newly built apartments.
154. Her experience in relation to problems with the shower rooms was very similar to that described by Ms. Green. She described how in some apartments remedial work to the shower trays had to be carried out every two years or so and that it was only a matter of time until the sealant round the shower tray failed and had to be replaced. She said that over the years almost all of the apartments had experienced a problem with the shower trays. It seems that Sanderson Weatherall also had a general policy of visiting apartments under their management every quarter. She said that even in rented apartments she would not expect a shower to require resealing more often than once every 3-5 years. She compared Concord Street to another development of similar age in Leeds in which none of the apartments under Sanderson Weatherall's management had required resealing within five years after completion.
155. Miss Warr also described in her witness statement how she had received numerous complaints from tenants about damp and mould in other areas of the apartments remote from the shower rooms. She said that she was really surprised by this. Like Ms. Green, she too had a policy of advising tenants to do everything that they could to try and keep apartments well ventilated.
156. In her witness statement Miss Warr summarised various other defects which were the subject of frequent reports to her office. These included: door frames dropping, balcony doors not working (coming off their runners) and leaks through the balcony doors causing puddles to develop on the living room floor; underfloor heating not working properly; and the intercom system, which she said had never properly worked in most of the apartments. She said that as tenants were missing deliveries as a result of the lack of a working intercom, a lot of them pinned up scraps of paper by the entrance to the development with a contact number for their apartment, which looked very scruffy.
157. In relation to the common parts Miss Warr said that she had received complaints regarding the pooling of water on the walkways and about the poor finish to the walkway floors.
158. In relation to the type of tenant Miss Warr's written evidence was to similar effect to that of Ms. Green. She said that the professional tenants who had rented some of the apartments at the outset had given way to student tenants from overseas, who were attracted by the fact that the apartments were cheap and close to the universities. She said that in relation to rental income standard two-bedroom apartments were about £100 less per month than similar apartments in other city centre developments. She said that owing to the condition of the apartments it was virtually impossible to obtain increases in rent although rental levels generally in Leeds had been increasing. She said that there was still a high demand in Leeds for apartments to rent, and that this had worked in Concord Street's favour.
159. Miss Warr said that, so far as she was aware, no sales of the apartments in Concord Street had taken place through Sanderson Weatherall in recent years, the last being in September 2007 when a one bedroom apartment (No. 119) was sold for £95,000. She said that when Sanderson Weatherall was approached by owners of apartments in Concord Street wishing to sell them, their standard advice was that the apartments were unsellable as a result of the poor reputation enjoyed by Concord Street, principally as a result of the numerous defects in the buildings.
160. In cross examination Miss Warr was asked about apartment No. 92, in which the tenants had a serious leak of water from the shower room because, according to Miss Warr, the bottom row of tiles was cut too short so that water leaked through into the bedroom, although she accepted that her description of it as "gushing" might have been inappropriate. However, she said that the tenants had to be moved out of the apartment completely whilst the apartment was refurbished. She agreed that the next problem with the shower in that apartment did not occur until May 2011, some five years later. Since then, there appear to have been no further problems.
161. Lord Marks asked Miss Warr if she agreed with Ms. Green that the overwhelming problem with these apartments individually had been the shower trays. Her answer was that it was the shower trays and condensation, but not necessarily linked. This was because Sanderson Weatherall had had several instances of mould on the walkway wall in the bedrooms. In addition, Miss Warr confirmed Ms. Green's evidence that the behaviour of tenants at Concord Street in relation to the drying of clothes was no different to that of tenants elsewhere in Leeds. In relation to rents in Leeds overall, Miss Warr thought that they had been fairly static until the last quarter of 2013, when they had started to increase.
162. Although Miss Warr was a rather less confident witness than Ms. Green, I found her to be an honest and reliable witness and I accept her evidence also without reservation.

Witnesses called on behalf of Barr

Mr. Barclay Chalmers

163. Mr. Chalmers is a main board director of Barr, and the managing director of Barr Construction, which is an operating division of Barr. As these positions would indicate, Mr. Chalmers is clearly an intelligent and able man. However, he had no direct involvement in the development and so he had little relevant evidence to give in relation to the state of the construction.
164. It is clear from his and other evidence that when Barr asked CWC if it could put in a quotation, which was in October or November 2003, CWC had already prepared the promotional material for the development (the promotional video was last modified in September 2003). Mr. Chalmers said that he was unaware of any steps taken by CWC to correct or amend this promotional material following the acceptance of Barr's quotation and its requirement for significant savings to be made on finishes and the general quality. Mr. Colin Veitch, who was employed as Barr's managing director for the North of England described the changes to the development in the following terms (at paragraph 58 of his witness statement):

"... whilst City Wall was always going to market the development in the best way it could, the style chosen by City Wall was reminiscent of a council style block of apartments from the mid-20^th century. Further, City Wall and Barr agreed to carry out the works to a budget and this contract was subject to extensive savings from the initial Employer's Requirements. These savings inevitably resulted in lower quality which was not going to necessarily attract "high flyers". No-one should delude themselves about the style of the apartment; this was a low-budget block of apartments."

165. I put some extracts from this passage to Mr. Chalmers for his comments and I think that it is fair to say that he did not feel able to dissent from Mr. Veitch's observations. He agreed that unless the typical off plan purchaser had had the opportunity to study the construction drawings in detail, he was going to find himself in for a surprise when he completed the purchase of his apartment.
166. There is no evidence that Barr ever expected CWC to modify its promotional material and so it is a fair inference that Barr knew or ought to have known that the apartments were being marketed to prospective purchasers on the basis of information that was clearly misleading. Mr. Chalmers agreed that - to put it at its lowest - CWC did not treat those purchasers who bought their apartments off plan very well; but he added that they did not treat anybody very well.
167. Whilst Barr itself was not involved in any plan to mislead those purchasers who thinking of buying an apartment off plan, it is reasonably clear from the evidence that the consequences of undertaking to build the development to a significantly inferior specification must have been evident to Barr's senior management at the time, namely that those purchasers who bought the apartments off plan on the faith of the promotional material would find themselves in for a big surprise when they discovered the reality of what they had actually bought. This, of course, is not a ground of the claim against Barr in this litigation, but I consider that it is a factor that the court is entitled to bear in mind when considering general submissions by Barr to the effect that it is not fair that Barr should be made to pay for the same defects twice - as it says would be the case in respect of some of the defects.
168. Mr. Chalmers was asked about the deed of settlement which Barr entered into with CWC's Administrators in July 2012, by which each party withdrew all claims against the other arising out of the building contract. The agreement also contained a provision that Barr would purchase or procure the purchase of the freehold of Concord Street from the Administrators for £450,000. In fact, Barr did not purchase the freehold itself. It was purchased by a company formed in March 2013, Terrapens Limited. The sole director of that company is a Mr. Buchanan, a main board director of McLaughlin & Harvey, who are well-known contractors.
169. It emerged that two of Barr's main board directors are also main board directors of McLaughlin & Harvey. Accordingly, they must be close working colleagues of Mr. Buchanan. In cross examination Mr. Chalmers said at first that he did not know why Barr had arranged to buy or procure the purchase of the freehold of Concord Street: he said he thought that it was just "tidying up". This was clearly no sort of explanation, and when I asked Mr. Chalmers what he meant by this he did not have any ready answer. He agreed that it might have been to close off the prospect of any further claim from the Administrators, a suggestion that I canvassed with him, but, as Mr. Nissen pointed out, such protection was unnecessary having regard to the other terms of the settlement agreement.
170. I find it hard to believe that Mr. Chalmers, as a main board director, did not know the reason why Barr was interested in the acquisition of the freehold of Concord Street. By the time when the agreement was made, this litigation was already well on foot. In my view it is hard to avoid drawing the conclusion that the acquisition of the freehold of Concord Street was a step connected to the existence of this litigation.
171. It was clear from Mr. Nissen's cross-examination of Mr. Chalmers that almost no disclosure had been given of any board minutes or other documents that were relevant to the decision to include the acquisition of the freehold of Concord Street as a term of the settlement agreement. The following morning, Thursday, 30 January 2014, I told Lord Marks that I was troubled by this lack of documentation and the absence of any rational explanation for the inclusion of the purchase of the freehold of Concord Street as part of the terms of the settlement agreement. I indicated that in those circumstances the court might draw certain inferences adverse to Barr unless material was disclosed that explained the reasons for what had happened. At this late stage of the trial the Claimants did not apply for an order for disclosure of such material and so it was left to Barr to take such steps as it considered appropriate in the light of the indication that I gave.
172. As a result limited further disclosure was given by Barr. I will revert to this issue later in this judgment.

Mr. Alistair Logan

173. Mr. Logan was a Design Coordinator on the Concord Street project. He was not based on site but said that he visited the site about once every one or two weeks. He left the project in about early 2005, by which time the steel frame had been erected, the floor slabs cast and work was beginning on the external envelope of the buildings.
174. He was asked a number of questions arising out of contemporaneous correspondence relating to the design of the work, but his recollection of the detail of these events was understandably very poor. However, I thought that he gave the impression on occasion that he was probably able to remember rather more than he was prepared to admit. Nevertheless, he did not strike me as a witness who was deliberately attempting to mislead the court.
175. In his witness statement he dealt with the site visits that he made in 2009 in relation to the adjudications. He visited about ten apartments and was critical of the extent to which some tenants had looked after the properties. He was also critical of some aspects of the maintenance of the common parts of the buildings. On this aspect I did not find his evidence very persuasive: it was very much a reflection of Barr's party line in this litigation.
176. On the whole, therefore, I derived fairly little assistance from the evidence of Mr. Logan. Where in relation to a particular defect I regard his evidence as relevant, I shall mention it in that context.

Mr. Colin Veitch

177. Mr. Veitch joined Barr in July 2004 as the managing director for the North of England. By then he had nearly 30 years' experience in the construction industry. He said that he was engaged by Barr on account of his extensive experience and his particular knowledge of the residential market in Leeds. Whilst he worked in Leeds he managed the construction of several residential developments involving about 1,500 city centre apartments in all.
178. When Mr. Veitch joined the project in July 2004 the structural steelwork for the North Block had just started to go up. His task was to manage and oversee the construction of the whole development, which he did through to practical completion. He was not on site on a full-time basis since he had a number of projects under his control.
179. His evidence in his witness statement was that when he left the site, about 18 months after the first apartments were handed over to CWC, there were only minor defects in some of the apartments.
180. Mr. Veitch is clearly an able man and I have no doubt that he is very good at his job. However, and perhaps understandably, he was reluctant to give much away in relation to the alleged shortcomings of design and workmanship contended for by the Claimants. But some of his notes made at the time were revealing. In about July or August 2004 he made some comments on certain aspects of the project as he found it. He noted that the 71 week programme was unrealistic and that 90 weeks would be more realistic. He agreed that if his assessment were right, then there would have been massive pressure on Barr to complete within the agreed 71 weeks. Mr. Veitch noted also that the contract conditions were "terrible". His notes included the following observations:

D. Poor Commercial Staff all changed since the start of project. Lack of experience.

E. No proper lead in time with works commenced on site ahead of design - piling/ground works.

F. Packages incomplete placed without orders (no proper bills).

G. Poor design choices modular walls, interface with steel frame."

181. When it was suggested to Mr. Veitch that it remained true that in respect of the whole of the project the works were getting ahead of the design, he replied as follows (Day 7/45):

"I think there was a point in time when the design caught up with the progress on site, but that is quite often the case when you start a project with an inadequate lead in time. The concept had been taken up by Barr, that was purely a concept and there had obviously been some substantial changes made by Barr during the negotiations with City Wall in respect of to value engineer the project to achieve the budget for the project to go ahead."

182. That there was significant "value engineering" to this project is not in doubt, although I would question that description when applied to the changes in specification that were in fact made at Concord Street. As I have already mentioned, in his witness statement Mr. Veitch described the development in these terms: "… the style chosen by City Wall was reminiscent of a Council style block of apartments from the mid-20^th century" and "… this was a low budget block of apartments".
183. The notes made by Mr. Veitch when he joined the project were, in my opinion, probably an accurate reflection of the position on site at the time. There is no evidence that it ever really got any better. On some of the work packages the sub-contractors changed more than once. This is reflected in a further note, when Mr. Veitch wrote:

"Render, Walling, Treatments, Ceiling, partitions, in general procurement is a shambles."

184. Mr. Veitch was not really able to explain precisely what he had in mind when he wrote this. In relation to the procurement being a shambles, he said "I have made that statement in my note" (Day 7/51). This somewhat cagey response was fairly typical of much of Mr. Veitch's evidence. However, in fairness to him, he was being asked about a specific state of affairs at a particular point in time which, at the time of the trial, was some 9½ years ago.
185. In relation to some of the more detailed aspects of the works, Mr. Veitch did give some revealing evidence. For example, he agreed that there was poor detailing around the balcony brackets which, Mr. Veitch said, "sloped backwards into the main columns and it created a problem sealing around the board" (Day 7/53). He explained also that some of the problems with the intercom were caused by Barr's contractors putting screws through conduits and damaging the cables (Day 7/175-6). He agreed that the condition of the walkway floors was dreadful, a problem that was never resolved because no finish was ever applied (Day 7/120). He agreed also that the walkways would become slippery in wet weather and, if it were to freeze, would be a hazard (Day 7/117).
186. It was put to Mr. Veitch that Mr. Goffin was "an honest, thorough and diligent individual", an assessment with which he agreed (Day 7/38).
187. On the whole I consider that Mr. Veitch's inability to answer questions of detail based on the contemporaneous documents was genuine, considering that the events in question occurred eight or nine years ago. Where, perhaps, he was a little less candid was in relation to his own notes about the position as he saw it at the time. However, those largely speak for themselves and I see no reason why they should not be taken at face value.

Mr. Limb

188. Mr. Ian Limb was employed as Barr's commercial director for the North of England between April 2005 and September 2007. He was responsible for putting forward Barr's pricing schedule that was submitted in the second adjudication that was concerned with the defects in Barr's work. He has been a contracting surveyor for some 30 years, although he is not a qualified quantity surveyor. He explained in his witness statement in some detail how he went about pricing the specification of work prepared by Hurd Rolland, the expert architects instructed by Barr in the adjudication.
189. Mr. Limb told the court that shortly before the second adjudication Barr made an open offer to CWC to carry out the remedial works that were described in the Hurd Rolland report. However, it was clear from his evidence that at the time of the second adjudication damp and mould in the apartments did not appear to be widespread.
190. Whilst I have no criticism of Mr. Limb as a witness, I found that his evidence was of little relevance to the issues that I have to decide. Although Barr seeks to rely on the adjudicator's award in the second adjudication (which was not a reasoned award), I consider that its relevance - and hence the evidence of Mr. Limb - is extremely limited.

The experts

Mr. Peter Scott

191. Mr. Scott, the expert building surveyor instructed by the Claimants, has a degree in Building Surveying and is a Chartered Building Surveyor. He has practised as a sole practitioner since 1993, advising clients in relation to commercial and residential property and being involved in the construction and maintenance of both types of property. He also acts as an expert witness. In my view he is appropriately qualified to comment on all matters in dispute concerning defects apart from issues relating to civil or structural engineering.
192. Mr. Scott prepared a very detailed final report running to over 200 pages, plus appendices, in November 2013. I found Mr. Scott's report to be extremely thorough and well supported by reference to the relevant codes, British Standards and the like.
193. Mr. Scott was originally instructed by CWC to advise and prepare a report in relation to the adjudications against Barr, which he did. Mr. Scott said, and I accept, that he took no part in the adjudication process beyond preparing that report. Subsequently, he was instructed by the management company in relation to this claim against Barr, and thereafter he has acted as an expert witness instructed by the Claimants.
194. Barr has attacked the Claimants' presentation of this case, and Mr. Scott's evidence in support of it, on the ground that it blurs the distinction between a claim for damages for breach of contract (as was the claim against Barr by CWC) and a claim for breach of statutory duty under the 1972 Act. I consider that there is some force in this criticism, not only in relation to the claim generally but also in relation to the evidence of Mr. Scott. I do not consider that Mr. Scott acted in any way as a partisan expert, but I do think that at times he had difficulty in keeping in mind that, in the context of this claim, for defects to be relevant they must cause or contribute to a dwelling being unfit for habitation. I consider that his conclusions in relation to the external render, which are considered in Appendix I, provide an example of this.
195. Accordingly, I consider that Mr. Scott's evidence needs to be approached with these points in mind.

Mr. James Tasker

196. Mr. Tasker is a civil and structural engineer. He is now a consultant with Campbell Reith Hill LLP, a practice of which he was formerly a senior partner. He has 30 years experience of the design and monitoring of structural and building development works, including commercial, industrial and residential buildings. Shortly after graduation in 1972 he joined Campbell Reith Hill, and has remained with that practice throughout his career, becoming a partner in 1983.
197. Mr. Tasker prepared a report on structural movement in February 2012 and a further report in November 2013 on structural matters generally. Although I have not accepted Mr. Tasker's opinion in relation to the ingress of underground water into the basement car parks, I thought that he was a good expert and one on whom, in respect of all other issues, the court could rely. He was clearly very knowledgeable and his views were considered and thoughtful. He was ready to make concessions against the Claimant's interests if they represented his professional view.
198. By the time he came to give evidence Mr. Tasker and Mr. Allen had agreed upon many matters that had been initially in dispute. This was of considerable assistance to the court. In addition, after the conclusion of the evidence Mr. Tasker and Mr. Allen also agreed a package of remedial work to deal with the shower trays.

Mr. Stuart Allen

199. Mr. Stuart Allen is a Chartered Engineer with over 35 years experience in civil and structural engineering. He spent about ten years working for contractors, during which time he undertook a four-year degree course in Civil Engineering. He joined Richard Jackson Partnership in 1985, becoming its Managing Director in 2000. It appears that a major part of his practice for many years has involved acting as an expert witness. I consider that in general terms he is appropriately qualified to be an expert in this type of case. However, in his report he made comments at various points that were more advocacy than expert evidence. For example, his suggestion that if the apartments were unfit for habitation, he would not expect tenants to renew their tenancies (paragraph 4.2 of his report, which was said to have been based on conversations that he had had with about 30 tenants of which he had made no notes); and his comment that the Claimants had not mitigated their loss by carrying out essential maintenance work (paragraph 30.9).
200. His principal report, of November 2013, covered over 30 different aspects of the claims made by the Claimants in relation to defective work at Concord Street and its consequences. I think that it would not be unfair to say that, with the exception of about three or four areas (for example, the junction between the roofing sheets and the patent glazing on the top floors, the construction of the penthouse balconies and some aspects of the external glazing), he concluded that either that no responsibility for the defect rested with Barr or that the defect in question had not rendered any dwelling unfit for habitation. Where he accepted that there were shortcomings in workmanship - such as in the external walls - he said that the level of workmanship was "typical of the industry standard" or that it had not caused the observed mould or condensation. I take the former to be another way of saying that the work was carried out in a workmanlike manner so that it met the standard required by section 1 of the Act.
201. Mr. Allen's overall conclusion, at paragraph 39.44 of his November 2013 report was in the following terms:

"With the exception of some minor items noted above it is my opinion that the development was constructed in a workmanlike and professional manner with proper materials to the level to be expected of a reasonably competent contractor."

202. Having now seen the building and heard a substantial amount of evidence, I am quite satisfied that Mr. Allen's conclusion is unsupportable. The work carried out by Barr at Concord Street was, as I have said elsewhere, defective in very many respects and it seemed to me that on many aspects of the case Mr. Allen was seeking to defend the indefensible. In so doing, in my view he lost the degree of objectivity that the court expects of an expert witness.
203. I have made particular criticisms of parts of his evidence in some of the appendices to this judgment and I do not propose to repeat them here. In particular, I consider that Mr. Allen's approach to the issues relating to the intercom system, the external glazing and the shower trays was particularly flawed for the reasons that I have given in appendices F, G and M. In addition, I was troubled by Mr. Allen's tendency at many points to find fault with the occupiers of the apartments.
204. Overall, therefore, I have to say that I feel able to place only limited confidence in Mr. Allen's evidence, save where it is in agreement with the views of Mr. Tasker or Mr. Scott. In the former context, I have already mentioned that by the time they came to give evidence Mr. Tasker and Mr. Allen were in agreement on many matters. That is to Mr. Allen's credit.

The valuation experts

205. The expert valuer called on behalf of the Claimants was David Richardson, CBE, FRICS. He has been in practice with Sanderson Weatherall in Leeds for more than 45 years. He is now a consultant. He was President of the British Chamber of Commerce between 1996 and 1998. Mr. Richardson wrote two reports: one dated December 2012 and the other dated 13 December 2013.
206. The expert valuer called on behalf of Barr was Mr. Bruce Collinson, FRICS, a member of Adair Paxton LLP. He has been in practice as a residential surveyor for some 40 years, over 30 of them in the Leeds area. He was instructed by letter dated 2 October 2013. He produced one report dated 13 December 2013.
207. It is clear that both experts are eminently well qualified to give evidence on the question of blight. Mr. Collinson defined blight as the difference between the value of a property which had suffered from defects in respect of which remedial work had been successfully carried out and that of that same property if it had had no defects in the first place. Although Mr. Richardson did not define blight in so many words, it is clear from his first report that he was applying a similar definition.
208. The experts met two or three times and then on 28 November 2013 signed a short statement setting out the points on which they were agreed. One point on which they were agreed was that the apartments had been purchased originally at the top of the market and that the market had, since January 2006, declined by about 30% but that the problems at Concord Street made current values so low that the apartments there could only be sold "at fire-sale prices". Another point was that those apartments could suffer from short to medium term blight after major repairs had been carried out.
209. However, when Mr. Collinson served his report two weeks later he expressed the view that there would be no blight following completion of the remedial work at Concord Street. This was on the assumption that some form of warranty or guarantee would be available from the contractor who carried out the remedial work. If no such warranty were forthcoming and a work programme was carried out with a value of £10.76 million and lasting 60 weeks, there might be limited blight of 10% for a maximum of six months.
210. This was a significant retraction from the position that Mr. Collinson had taken in the experts statement, as he accepted (Day 16/218). When asked why his view had changed he said this (at Day 16/216):

"Because I was on the back foot. From the point of my instruction I felt that at the time of the experts' meetings with a tight deadline it was acceptable, it was doable. We reached an accommodation, I left the door ajar for the warranties. When I then got into the ribs of it, I looked at it and thought: I do not agree with that any more."

211. Whilst I am prepared to accept Mr. Collinson's explanation, the fact that he was prepared to sign the statement when he was not really in a position to do so does not reflect well on his position as an expert. I was also unimpressed by his assertion in his report that Mr. Atkinson may have had a serious conflict of interest given his role as caretaker and his freelance activity as a letting agent for about a third of the properties. It is quite clear from the evidence of the owners and residents that this is not how they perceived the situation.
212. I will return to the evidence of the expert valuers in more detail in the section dealing with the issue of blight.

The ownership of the freehold

213. As I have already mentioned, by a Settlement Deed dated 20 July 2012 between, on the one hand, The Royal Bank of Scotland ("RBS"), CWC and CWC's administrators, and on the other Barr Limited and Barr Holdings Limited, RBS and CWC entered into a full and final settlement of all claims between each of them and Barr. Barr's liability to RBS arose under a warranty dated 31 March 2004 and RBS subsequently made a substantial claim against Barr under that warranty.
214. It was a term of that settlement that Barr would itself or would procure another entity to purchase the freehold in the Concord Street properties for £450,000. As a result of disclosure given late on during the course of the hearing it emerged that the freehold was purchased by a company called Terrapens Ltd ("Terrapens"). I have already explained that the sole director and shareholder of Terrapens is a Mr. Patrick Buchanan, who is the company secretary of McLaughlin & Harvey, which is a company closely associated with Barr.
215. McLaughlin & Harvey has two directors, William Cheevers and Stephen Hamill who are also directors of Barr. The subsequent disclosure has revealed that Mr. Buchanan holds his shares in Terrapens on trust and as nominee for William Cheevers and two other members of the Cheevers family.
216. In the light of this information the Claimants invite me to draw the following inferences:

i) Terrapens is a "friendly" company to Barr;

ii) Terrapens does not intend to act in the Claimants' best interests;

iii) Terrapens would not seek to help the Claimants in their claim against Barr;

iv) Terrapens could require the management company to carry out appropriate repairs irrespective of the level of recovery by the Claimants in these proceedings; and

v) Terrapens could enforce its entitlement under the Leases in a manner which is perceived to be beneficial to Barr, but not to the Claimants.

217. Given the facts as I have set them out, I do not find it difficult to draw the first of these inferences. The evidence given by Mr. Chalmers about all this smacked of a lack of candour, and it seems to me an inescapable conclusion that Barr has taken these steps with a view to improving its position in relation to this litigation. Whether or not Barr will seek to put pressure on the management company by threatening, through Terrapens, to enforce its rights under the leases can only be a matter of speculation.
218. Accordingly, the Claimants invite the court to be very cautious, and to have these considerations in mind, when considering questions of the appropriate remedial works and damages. Whilst the arrangements which may have been made by Barr cannot affect Barr's liability under the Act, I consider that they can be legitimately taken into account when the court is considering the means by which any awards of damages should be paid or limitations on the extent to which individual awards of damages can be enforced, but of course only in circumstances where there is judicial discretion to do so.

Apartment 156 (4^th Floor, South block)

219. This apartment is occupied, but it is not a lead apartment. It was visited during the course of the view on 14 January 2014. It had very extensive mould around the living room window reveals, to the extent that in places the surface of the plaster was black. In the lower section of the ceiling in the living room (ie. under the balcony above) there was damage to the plaster caused by a leak, which had obviously been there for some time. There was a bucket on the floor below and the occupiers said that water had come through during the previous night when it had rained. Judging by the general state of the external areas, it did not seem that the overnight rain could have been very heavy.
220. There was also extensive mould in a bedroom on the south side of the apartment (overlooking the walkway). I noted that the internal ventilation fan was running.
221. I have not the slightest hesitation in concluding that this apartment was quite unfit for habitation. The extent of the mould in the living room and the bedroom was quite unacceptable by any standards. The presence of the mould was further aggravated by the direct leak through the ceiling in the living room which, according to the occupants, had persisted for about a year. The fact that they were living in it does not affect this conclusion. I did not like to ask about their personal circumstances, but it may well be that they had no alternative.
222. There was not the slightest ground for thinking that this mould was caused by dampness from the shower room. Apart from the fact that the mould was on the walls remote from the shower room, in both the bedroom and the living room, in other apartments where the shower room appears to have been the cause of the damp there were signs of either damp or mould on the outside of the shower room walls at low level, and sometimes signs of damp in the adjacent flooring. The presence of damp in these locations was much more consistent with the shower being the cause of the damp. Such signs were absent in Apartment 156, at least as far as I could tell on that brief inspection.
223. There was no evidence to suggest that the cause of the damp was in any way contributed to by the current occupiers or, indeed their predecessors. The leak through the ceiling was clearly the result of the agreed defects in the construction of the roof above. I find that the mould in the living room was very probably the result of a lack of insulation and the absence of a continuous vapour check layer in the walls in the area of the window reveals. I find that the mould in the bedroom was caused by either or both water penetration from the floor above or the lack of proper insulation and the absence of a continuous vapour check layer in the south facing wall of the apartment.

Heads of claim where a breach of duty is not established

224. There are certain heads of claim in respect of which I have formed a clear view that the Claimants have failed to prove their case. These are the claims in respect of the fire escape stairs, the Man safe system and the insulation of pipework.
225. I deal with these in detail in Appendix P to this judgment.

The measure of damages

226. Barr's case is that in respect of the cost of remedial works necessary to rectify defects to the common parts which make a Claimant's apartment unfit for habitation, that Claimant may claim no more than his or her share of the cost of the works, such share being the amount he or she will have to pay by way of service charge to the management company to rectify the defects (Closing Submissions, paragraph 57).
227. In paragraph 68 of its Closing Submissions, Barr put it this way:

"However, in the case of common parts defects within the financial responsibility of the Management Company, the expenditure which any claimant whose dwelling is not fit for habitation as a consequence of the defect(s) in the building which are not within his financial responsibility will incur, is the sum which that individual claimant will have to contribute to the cost of remedying the defect(s). So, the correct assessment of the loss which each Claimant has suffered can only be, in respect of remedial works to any defect in the common parts, that Claimant's share of the service charge related to the repair of that defect. The claimant is not entitled to claim the total cost of the work because that is not expenditure which the claimant will in fact incur."

228. However, at the same time Barr asserts that, for example, in terms of fitness for habitation of a dwelling, the defects to the roofs can only affect the penthouse apartments so that, as I understand the argument, no other Claimant can have a claim in respect of those defects (paragraph 44).
229. So on this basis, according to Barr, the only Claimants who have a claim under the Act in respect of defects in the roof are the owners of the penthouse apartments on the top floors, and then only to the extent of their proportion of the service charge. Thus the consequence of Barr failing to achieve the standards of design or workmanship required by the Act in respect of the roof is that a few leaseholders between them can recover only a fraction of the cost of the necessary repairs to the roof, the balance of which must be paid by the other leaseholders.
230. Barr relied on a decision of the Court of Appeal in Bayoumi v Protim Services (1998) 30 HLR 785. In that case the defendant carried out defective tanking work and, with the agreement of the claimant, installed a dehumidifier in order to remove the condensation or, if it could not be wholly removed, to enable the defendant to make a better assessment of the extent of the remedial work necessary. The dehumidifier malfunctioned and caused a flood.
231. The court held that the claimant had to prove that the breach of duty was a material cause of the damage suffered and that the measure of damages included all the losses that were a natural consequence of the breach.
232. I do not see how this case helps Barr. For example, if there is a defect in the roof above a penthouse apartment caused by Barr's poor workmanship so that the apartment is unfit for habitation, the loss sustained by the owner of the apartment is, in my opinion, the the lack of, and need for, a sound roof. Ordinarily, the compensation for that loss would be the sum of money representing the cost of the necessary repairs. If it is the case that the carrying out of those repairs will necessarily benefit other leaseholders who are not claimants, I do not see how that can affect the particular claimant's right to compensation.
233. I can see no reason why Parliament should have legislated for the unjust result for which Barr contends and I can find nothing in the wording of section 1 of the Act that compels such a conclusion. In my judgment the owner of an apartment which has been rendered unfit for habitation because of a defect in the common parts is entitled to the cost of repairing that defect, or at least to the cost of carrying out those repairs necessary to make his flat fit for habitation.
234. So, staying with my example, the owner of a penthouse apartment on the top floor which was rendered unfit for habitation because of the state of the roof is in my view entitled to recover the cost of the work to the roof that is necessary to render his apartment fit for habitation. Nothing less will restore him to the position that he would have been in if the breach had not occurred. If that owner is awarded only his share of the service charge, he will then be dependent on all the remaining leaseholders agreeing to fund the balance of the cost of repairing the roof. But if they or some of them refuse, then the work may never be done.
235. Barr's argument is that the effect of allowing any one (or more) claimant(s) to recover the full cost of repairs to any defect in the common parts would be to require Barr to compensate the owners of other flats within the development in respect of their contribution to the service charge associated with the repair of that defect, when those individuals have no claim under the Act and Barr is not in breach of any duty to them in respect of that defect (Closing Submissions, paragraph 80). But the converse of this argument, as it seems to me, is that what Barr is effectively asserting is a right of contribution against the other leaseholders in respect of the necessary repairs to, say, the roof. In my judgment that contention cannot be right.
236. In relation to the roofs the position is further complicated by the fact that 12 of the 18 penthouse apartments are owned by West Register. West Register, a subsidiary of the Royal Bank of Scotland, acquired the leaseholds of 22 apartments following the entry of CWC into administration.
237. West Register subsequently discontinued all the claims in respect of apartments of which it was the leaseholder. I am not clear precisely how this came about, but in his closing submissions Lord Marks told me (at Day 17/153), in the context of the Settlement Deed of 20 July 2012, that:

"... what Barr achieved was full and final settlement of the administrators' - of any liabilities under the development contract and the hope that West Register would discontinue, which they did. It wasn't part of the formal agreement, but it was plainly part of the agreement. It is significant in respect of the discontinuation because of the way that it could be said to affect my other submissions about discontinuation. There are seven owners of six apartments, apart from West Register, who have discontinued entirely independently."

238. If the result of this agreement is that the Claimant leaseholders of the remaining penthouse apartments cannot recover the cost of repairing the roof because it is said that they have an insufficient interest, then that would be deeply unattractive. I am, I regret to say, left with the uncomfortable feeling that Barr might have negotiated the withdrawal of the West Register claims in the hope of improving its position in this litigation as against other Claimants.
239. Fortunately, the outcome of points such as this does not need to be considered further since I have concluded that the partial repair of the roofs proposed by Mr. Allen is not a satisfactory solution. In my judgment there would remain a real risk of failure through corrosion of the structural steelwork in the unrepaired sections of the roof if those sections are just left as they are, which is what Barr proposes.
240. A theoretical objection to awarding one particular claimant the entire cost of repairing the roof (if that is what is required in order to restore him to the position that he would have been in but for the breach) is that several claimants may be in the same position so that each one is entitled to claim the full amount for himself. Thus Barr would end up paying damages in respect of the same defects several times over. Another potential objection is that the Claimant may not spend the money on repairing the roof, but just bank it.
241. However, the machinery of the law is quite capable of disposing of these objections by the simple expedient of awarding the full cost of repairs to the several Claimants entitled to it but on the basis that the relevant judgment sum can only be enforced once against Barr, and then on the condition that the damages will be paid to the Claimant's solicitor who would undertake to hold the money for the benefit of the management company to enable the latter to carry out the repairs.
242. For these reasons I reject Barr's argument to the effect that a leaseholder's loss in respect of a particular defect in the common parts is limited to his proportion of the additional service charge that would have to be imposed in order to cover the cost of the repairing the defect in question.

The conduct of the management company

243. A constant refrain by Barr throughout the trial was that some of the cost of the works now required to remedy defects in the development is attributable to a failure by the Claimants to ensure that their apartments were properly maintained and/or by the management company to ensure that the common parts are properly maintained in accordance with its obligations under the leases.
244. So far as the conduct of the Claimants themselves is concerned, that is dealt with in Appendix D. In that appendix I have concluded that the presence of damp and mould in the apartments has not been caused or contributed to by the occupiers to any material extent.
245. So far as the management company is concerned, one needs to start by looking at the history. As I have already mentioned, in early 2006, after many of the apartments had become occupied, problems that arose were being dealt with directly between Barr and CWC but often in response to complaints by residents. Typically, a leaseholder would write to CWC about a particular defect and CWC would then take it up with Barr.
246. On 2 April 2007 Mr. Veitch wrote to CWC in response to a complaint about ongoing defects. He denied that the buildings could be described as deteriorating badly. The letter concluded as follows:

"In conclusion, we would record that Barr have provided throughout the last 15 months a full-time supervisor to deal with any defects notified and have attempted to clear any items as promptly as possible. You are fully aware that proposals were submitted some 10 months ago for the rectification of the building issues and it is only recently that you have been prepared to meet and discuss this issue. Please therefore propose a series of dates and venue where we can meet and take this matter forward."

247. It seems likely that any further discussions between CWC and Barr did not achieve very much because in the summer the matters in dispute between Barr and CWC were referred to adjudication. Barr claimed about £2.1 million which it said that CWC had wrongly withheld and CWC made a cross claim for works not properly executed. The adjudicator's decision was dated 24 August 2007, by which he awarded CWC about £410,000 plus VAT in respect of the defects. This included about £110,000 in respect of repairs to the walkways, about £73,000 for repairs to the basement car parks, about £45,000 for the external glazing and £23,600 in respect of the staircases. It is not clear how much, if anything, of this award CWC actually spent on any remedial works; it appears at the most to have been very little.
248. Barr's case, as it was opened, included an argument that the Claimants, as privies to CWC, were prevented from making a fresh claim for the same defects as those the subject of the claim by CWC in the adjudication. I do not need to say any more about this argument, because by the time the trial had concluded the point was no longer pursued. However, Barr did contend that the adjudicator's Decision was relevant for two reasons:

i) the evidence relating to the defects that were the subject of the adjudication and the proposals for remedial works, as found by the adjudicator, was relevant to the issues concerning the true extent of the remedial works required and their cost; and

ii) it supports Barr's argument that some of the cost of the works now required to remedy defects in the development are attributable to a failure by the Claimants to ensure that their apartments were properly maintained and/or of the management company to ensure that the common parts were properly maintained in accordance with its obligations under the leases.

249. It seems to me that very little weight can be given to an unreasoned decision of an adjudicator given several years ago when the state of knowledge about the development was much more limited than it is today and the evidence before the court is very different from the material that was put before the adjudicator. This is not intended as a criticism of the adjudicator, it is simply an observation based on the circumstances.
250. It is perfectly true that, as Barr points out, in 2007/2008 the management company was effectively dormant. In late November 2007 it appears to have been struck off the register at Companies House for failure to file returns. I assume that it was subsequently restored to the register because by August 2008 it was corresponding with creditors. In the meantime the collection of the service charge had been left to agents, Accent Property Solutions, who appeared to have been pretty inefficient. Matters were not made any easier by the fact that several apartments remained unsold for some time and CWC did not pay the service charge in respect of those apartments.
251. When it was suggested to Mr. Watson that the management company had an obligation to collect enough money to meet the service charge in order to keep the building in repair, he said yes, "as long as it is financially viable". When he was asked what he meant by that he explained that there were issues with the building that you could not expect a management company to deal with: for example, it would not be expected to have to maintain the insulation in a roof void or turn curtain walling round. He said that the costs of that sort of work would be beyond the means of most owners.
252. Mr. Watson was then asked about the need for a clear written management strategy, to which he said (Day 5/159-160):

A. On a normal development you would have a maintenance strategy, on this development it is somewhat difficult.

Q. You believe and have believed for a long time that a clear written management strategy is crucial; is it not?

A. On other developments that I'm involved in we have a management strategy that is based on a ten-year or 15 year projection, but it is not possible on this development because some of the issues are so fundamental that you just couldn't deal with them.

Q. But you believe that there ought to be such a management strategy in place in spite of those issues, I suggest?

A. If the fundamental issues with the fabric were resolved, yes."

And a little later (at 164):

"A. Yes, I think that a document is best practice, it is not to say that we don't have a management strategy, it has probably just not been formalised in such a way, but Concord Street unfortunately has its own issues, such as decorating was touched on this morning. When render is cracking and falling off, to paint it would just seem a ridiculous waste of money."

253. When it was suggested to Mr. Watson that the management company was in default of its obligation to paint every five years those parts that are normally painted, he said (at Day 5/166):

"A. Not really. If the development was as the other development that we have looked at, then yes. But the development is unique in that we had to spend £25,000 recently on roof repairs that were a defect from the beginning. So you cannot spend - keep spending money as if it is a bottomless pit, so money has to be kept and used to effectively firefight issues as they crop up."

254. It was suggested to Mr. Watson that Mr. Atkinson was extremely heavily involved looking after individual apartments, with which he agreed. However, he then said that without Mr. Atkinson they would all be lost.
255. I consider that the directors of the management company were in a thoroughly invidious position. As the findings in this judgment demonstrate, the two blocks at Concord Street were poorly constructed in almost every respect. There was little point in carrying out repairs until the extent of the problem in any particular area had been determined. As a result of the problems caused by the ingress of water through the external glazing to the walkways the voids above the soffits were full of moisture and the finishes steadily began to deteriorate. There was little point in repairing or decorating the soffits if the damage was just going to re-occur. Similar considerations applied to the walkway soffits on the top floor. Painting the steelwork on the walkways would achieve little until the source of the moisture giving rise to the corrosion was discovered and dealt with. I do not consider that there are any grounds for criticising the Claimants in respect of their conduct of the management company once they were in control of it.

Summary of my conclusions in relation to the scope of remedial works

256. My conclusions on the appropriate remedial work, so far as I can assess it, in respect of each defect are set out in the appendices. In this section I summarise the conclusions.

The balcony doors

257. I find that Barr is not liable to the owners of the lead apartments and to the owners of apartment Nos. 72 and 80 in respect of the gaps above or below the balcony doors. However, this finding is apartment specific and will not therefore necessarily apply to other apartments.

The basement car parks

258. I find that the only defect for which Barr is liable is the cost of remedying the water ingress in the north-west corner of the car park of the North block (in accordance with paragraphs 23-27 of Appendix C). This is because I consider that the risk of further damage by corrosion to the sheet piles in this area, and the risk of ultimate failure, is one that in principle renders all the apartments in the North block unfit for habitation, even though the cost of the relevant remedial works are likely to be relatively modest. Each claimant leaseholder of the apartments in the North block is entitled to recover a sum representing the costs of this work (but subject to Barr only having to pay an amount representing the cost of repairs once). If the amount cannot be agreed, it will have to be assessed.

The external walls

The balcony elevations

259. I find that the defects in the construction of the walls to the balcony elevations have materially contributed to the presence of damp in the following lead and B2 apartments: Nos. 12, 23, 51, 65, 66, 72, [75]^[4], 80 and 149. I find that all these apartments were unfit for habitation on completion of the work as a result of the combination of the defects in the construction of the walls and the defective shower units. Accordingly, I find that each of the claimant leaseholders of those apartments is entitled to the cost of the necessary repairs to his or her balcony elevation wall, including any necessary repairs to the paintwork of the balcony supports to his or her balcony (but not the cost of installing a thermal break between the balcony support and the main steelwork).

The walkway elevations

260. I find that the defects in the construction of the walls to the walkway elevations have materially contributed to the presence of damp in the following lead and B2 apartments: Nos. 23, 51, 65, [75] and 80. I find that all these apartments were unfit for habitation on completion of the work as a result of the combination of the defects in the construction of the walls and the defective shower units. Accordingly, I find that each of the claimant leaseholders of those apartments is entitled to the cost of the necessary repairs to the walkway elevation wall of his or her apartment.

The intercom system

261. For the reasons given in Appendix F, I find that each of the claimant owners of the lead and B2 apartments is entitled to the cost of having a system installed to his or her apartment to the original specification (or equivalent). I have not been provided with any figures for the cost of installing an intercom to each of these apartments individually, but I suspect that it may well be cheaper to replace the system in its entirety for the agreed sum of £71,029. In that event, the Claimants who are entitled to the cost of a new intercom system for the individual apartment would be entitled, and possibly bound, to mitigate their loss by arranging for the installation of an entirely new system even though that would benefit many leaseholders who are not claimants and are therefore not entitled to recover any damages.

The Kawneer external glazing

262. Since I have found that the defects in the glazing rendered nearly all apartments in each block unfit for habitation on completion of the work because of the risk of failure of the steelwork in the walkways of that block as a result of prolonged corrosion by water entering the walkways, and particular the voids in the soffits, through the glazing, the Claimants are entitled to the cost of replacing the glazing to each block. I reject the remedial proposals put forward by Barr. I understand that the direct costs of this had been agreed by the expert quantity surveyors as £1,639,250 (excluding preliminaries, professional fees, allowance for inflation and any other indirect costs). That is the sum for which I find Barr is liable, together with the associated indirect costs (which will have to be assessed if not agreed), although the precise form of the award of damages under this head will have to be discussed. In addition, Barr is liable for the necessary work to protect the steelwork that has been corroded as a result of these leaks. In relation to that supporting the walkways, the direct costs of this have been agreed in the sum of £136,400. In relation to other steelwork, the agreed direct costs are £98,300.

The penthouse balconies

263. Although I have concluded that the work to the penthouse balconies was defective and that, where this caused or contributed to the apartment below being unfit for habitation, this would have made Barr liable to the owner of that apartment, I am not aware that any of the lead or B2 apartments is alleged to have suffered damage from this cause. However, if this is wrong I will hear further submissions on this point. In order to decide whether or not other apartments have been rendered unfit for habitation I will have to consider evidence from the relevant owners or occupiers, although the evidence so far suggests that the outcome will be resolved in favour of the Claimants. In any event, in the case of other claimant leaseholders liability and the amount of damages recoverable under this head will have to be determined, if it is not agreed.

The external render

264. Although I have concluded that the workmanship in relation to the application of the render and the boarding which acts as its substrate was poorly carried out and did not meet the standards required by section 1 of the Act, I am not persuaded that this defect made any apartment unfit for habitation when the work was completed. The claims under this head therefore do not succeed. However, where repairs are carried out to either the balcony or walkway walls the render will inevitably have to be replaced as part of the remedial work and that cost will be recoverable.

The roofs

265. For the reasons given in Appendix J, I have concluded that the workmanship in relation to the construction of the roof to each block fell short of the standard required by section 1 of the Act and that, as a result, each of the apartments on the top floor was, on completion of the work, unfit for habitation because there is a risk of structural failure of the roof if remedial work is not carried out. In addition, in the case of one apartment, in respect of which I heard evidence from the owner, I have found that it was also unfit for habitation because of the extent of mould and damp that appeared as a result of the defects in the construction of the roof (apartment No. 72). This is a conclusion that might also apply to other apartments in respect of which the owner or occupier did not give evidence. I have concluded also that each leaseholder can only be restored to the position that he would have been in if the work had been carried out properly by awarding him or her the cost of replacing the entire roof to the block in question. For the reasons given in Appendix J, I reject Barr's various proposals for remedial works and, in particular, the submission that it would be sufficient just to repair the section of roof immediately above those apartments which are owned by Claimants in the action. Therefore I find that the claimant owners of each of the penthouse apartments are entitled to recover the costs of repairing the roof of the block in which the apartment is situated, in other words the Claimants' Option 1. In addition, I find that the owners of apartment No. 72 are entitled to the same remedy on the ground that their apartment was unfit for habitation by reason of the extent of the mould and damp caused by the defects in the roof. I understand that replacing the roof in its entirety will necessarily embrace the cost of dealing with the defect in relation to the junction between the roof sheets and the glazing above the top floor walkways. The total direct costs of replacing the two roofs has been agreed in the sum of £777,097, plus the relevant indirect costs (as with the external glazing). In relation to the South block, I find that Mr. and Mrs. Haslehurst and the owner of apartment No. 74 are entitled to the costs of repairing the roof of that block, together with the relevant indirect costs (which will have to be assessed if not agreed). As I have already mentioned, appropriate directions will have to be given as to the terms on which these damages are to be received and dealt with. As to the North block, for the same reasons the owners of apartment Nos. 171, 173, 175 and 177 are entitled to damages representing the costs of replacing the roof of that block. In the absence of agreement, the evidence of owners or occupiers of those apartments, and of No. 74 of the South block, will have to be considered to determine whether or not those claimants are entitled to recover a like sum by way of damages on the further ground that their apartments were also unfit for habitation by reason of the presence of mould and damp caused by the defects in the roof.^[5]

The walkway surfaces and drainage

266. For the reasons given in Appendix K, I have concluded that the hazardous state of the walkways in wet weather or snow as a result of the inadequate drainage (aggravated by the uneven surface) made all the apartments unfit for habitation, save for those on the top floor of the North block (about which I make no finding given the state of the evidence). I reject the remedial proposals put forward by Barr and so I accept the proposals put forward by the Claimants. In my judgment each claimant leaseholder is entitled to the cost of the repairs to the walkway or walkways providing access to or exit from his or her apartment. This will include the cost of repairs to those parts of the walkways that constitute the means of escape from the apartment in the case of fire. I anticipate that the damages to which the Claimants collectively will be entitled will cover the cost of repairing all the walkways in both blocks, but I am not in a position to make a finding to that effect at this stage. The direct cost of the remedial work to the defective walkway drainage is £308,013, again excluding preliminaries and other indirect costs. That is a sum for which Barr is liable, but directions will again be required as to the appropriate form of order so far as this head of damages concerned.

Internal doors, gaps under party walls and the flooring

267. For the reasons given in Appendix L, I consider that in lead Apartment Nos. 23, 26, 51, 65, 66, 122 and 149 (all save for No. 12), and Apartment No. 80, the design and workmanship involved in the installation of the internal partitions fell below the standard required by section 1 of the Act and has resulted in a number of these apartments no longer complying with the fire regulations in force at the time when they were built. I have concluded that the risk to the occupants in the event of fire makes each of these apartments unfit for habitation, so I consider that the relevant Claimants are entitled to recover the cost of the appropriate remedial work. Since it seems that the extent of the problems from this cause differ from apartment to apartment, I consider that the extent of the work required will probably have to be assessed on an apartment by apartment basis and will depend upon whether works to the shower tray are also required in that apartment, but I will hear further submissions on this if necessary. Where work to the shower trays is required, as a matter of mitigation of loss that should ordinarily be done at the same time as any work that is required to the partition walls.

The shower trays

268. I have concluded in Appendix M that the shower trays were defectively installed as a result of design and workmanship falling below the standard required by section 1 of the Act, and that this made each lead and B2 apartment, save for Nos. 26 and 72 (which had a bathroom, not a shower cubicle), unfit for habitation, with the result that the leaseholders of those apartments are entitled to the cost of replacing the shower tray so that it is properly supported and the vertical tiled walls of the shower cubicle overhang the horizontal edge of the tray. If that cost has already been incurred, then the relevant Claimant is entitled to recover it. For the reasons given in the previous paragraph, the cost of this work will probably have to be assessed on an apartment by apartment basis. I am not in a position to find as a fact that a particular figure would represent the appropriate measure of damage for every apartment suffering from this defect.

Other matters

269. This litigation unfortunately throws up certain limitations in the procedure adopted in this case of trying the issues by reference to sample apartments. My findings indicate that dampness appears to be more common in the external walls to the balcony elevations, where about 80% of apartments are affected, than in the walls to the walkway elevations, where the proportion is about 50%. These figures are broadly consistent with those shown on the Claimants' diagrams that were enclosed with their closing submissions, where the respective proportions are about 85% and 42%, respectively (ignoring non-claimant apartments). The Claimants' option 1 scheme includes an estimate for the cost of remedying the defective workmanship in all the external walls. There is, so far as I can tell, no breakdown showing the separate costs for the balcony and the walkway elevations.
270. For the reasons that I have already given, a leaseholder can only recover damages under the Act on proof not only of defective work but also that such work has caused or contributed to his or her apartment being unfit for habitation when the work was completed. In relation to the lead apartments it is clear that, whilst the defects in the construction of the external walls are widespread throughout the blocks, this has not necessarily resulted in every apartment being unfit for habitation. This shows why this action cannot be a representative action.
271. However, since I have found that about 80% of the lead and B2 apartments were unfit for habitation by reason of defects in the balcony elevation walls, the figures set out above suggest that a similar (or slightly higher) proportion of the remaining apartments owned by the leaseholders who are Claimants are similarly affected. However, given the statistically small population of the sample consisting of the lead and B2 apartments, I am not prepared to make a finding that this is, in fact, the case (even if the terms on which the trial was held permits me to do so). This is because one cannot just look at records of damp and mould in isolation: one needs to know in addition what the occupier had to say about the conditions and their impact.
272. I suspect that the only way forward is for the Claimants' experts to prepare a schedule identifying all the remaining apartments owned by the Claimants (including those identified in Appendix E) that have signs of damp or mould on (a) the balcony elevations and (b) the walkway elevations. If this can be the product of a joint exercise, so much the better. If not, Barr will then have to produce a counter schedule identifying any areas of disagreement.
273. With this schedule the court could then consider the contents of the relevant witness statements and decide whether or not each apartment was fit for habitation on completion. If either of the parties is not content for this to be done without further submissions, whether written or oral, then I will have to give further directions as appropriate.
274. It is, I regret to say, only at this stage that it will be possible to identify an appropriate remedial scheme to rectify the defects in the non-lead and B2 apartments for which Barr is liable.

Alternative methods of repair.

275. In Appendix J I have addressed in some detail Mr. Allen's alternative proposals for the repair of the roof of each block, which I have rejected for the reasons given in that appendix. Mr. Allen has also produced alternative proposals in respect of other areas of defective work, some of which only emerged at a fairly late stage. As I have made clear, on many aspects of his evidence I did not find Mr. Allen to be a witness upon whom the court could in general rely and so I am not prepared to accept his alternative proposals in preference to those put forward by the Claimants save where I have expressly made a finding to this effect elsewhere in this judgment or in the appendices.

The issue of residual blight on the value of the properties following remedial work

The absence of a certificate from the Zurich in respect of the common parts

276. A point raised by Barr was that one factor affecting the value of the apartments was the lack of a Zürich certificate/warranty for the common parts. Barr submits, and I did not understand this to be disputed, that it was not a condition of Barr's contract that Zürich issue a certificate for the common parts. Barr submits that Zürich would not issue a common parts certificate until works in accordance with section 278 of the Highways Act 1980 were completed. These were works to the road between the two blocks which did not form part of the scope of Barr's work.
277. When Mr. Veitch was cross-examined by Miss Powell, for the Solicitor Defendants, he agreed that by the end of 2005 the only work that appeared to be outstanding in order for Zürich to issue its certificate for the common parts concerned some of the walkways to the South block (Day 7/18-19).
278. The matter was explored further in cross examination by Mr. Nissen, when Mr. Veitch accepted that the section 278 works were completed on 10 February 2006. He accepted also that notes that he made at the time indicated that the existence of defects in relation to the walkway drainage in the South block, amongst other things, was preventing the issue of the Zürich certificate. However, in a letter dated 16 December 2005 to Burtenshaw Projects, who appeared to be acting as project managers, Mr. Veitch insisted that practical completion had been achieved and was complaining that Burtenshaw had not issued a certificate to that effect. In the letter he said that the only matter outstanding was the section 278 works which did not form part of Barr's contract. The letter contained no reference to any outstanding defects in the common parts.
279. The cross examination then continued as follows (Day 7/164-165):

Q. The position is that the reason in fact why Zürich never issued certificates in respect of the common parts was outstanding works from Barr. That is the reason, that is right isn't it?

A. Well, once the 278 works were complete then that was no reason for them to withhold the certificate.

Q. The reason they withheld them was Barr's defects?

A. Well, there was [sic] outstanding defects in the common areas.

Q. That applies both to the North Court and south Court?

A. Well, no works has [sic] been carried out to the Courts."

280. There was no evidence from Zürich, although extracts from records of Zürich inspections were available. In relation to the South block, an entry for 16 December 2005 records that "Finish to common walkways incomplete". This is the last date on which there is an entry in the records.
281. In my view the only inference to be drawn from this material, exiguous though it may be, is that by early 2006 two things were preventing the issue of the Zürich certificate for the common parts: the condition of the walkways to the South block (which by then had been otherwise complete for almost six months) and the section 278 works. Whilst the latter were completed in February 2006, there is no evidence that the work identified as being required to the walkways of the South block was carried out. Indeed, the evidence of Mr. Veitch would suggest that it was not.
282. Accordingly, I cannot accept that the absence of a Zürich guarantee for the common parts provides Barr with any assistance or defence in relation to the claim for blight. So far as I can tell, the absence of a Zürich certificate for the common parts appears to have been caused, or at least materially contributed to, by outstanding and unrectified defects to the walkways of the South block. Since the problems with the walkways were common to both blocks, the same obstacle to the issue of the Zürich certificate would have arisen there also. However, as I have already mentioned, there are no records of any Zürich inspections after 16 December 2005. This may be because no further inspections were carried out after that date, but there is no evidence about it.

The evidence of the expert valuers

283. Mr. Collinson said in his report that the apartments were now worth about 40% of their original value for a number of reasons: the general decline in the market, the existence of the defects, a reactive approach by the management company, misuse of the apartments by tenants (in particular, the failure to ventilate them properly), the lack of a common parts warranty from the Zürich and the existence of this litigation. Mr. Richardson, as I understood his evidence, allowed only for the general fall in the market, which was agreed at being 30% since January 2006.
284. In his first report Mr. Richardson gave details of three sales on the open market of Concord Street apartments that had taken place since the disposal of 21 of the apartments to West Register in April 2009. Two of these were in September 2009 at prices of £144 and £190 per square foot, respectively. A third was sold at auction following a repossession in November 2011 at about £100 per square foot (which was the same rate as the sale of the 21 apartments to West Register). His "equalised" value per square foot in January 2006 was £200.
285. This suggests that prices may well have fallen by 50% since January 2006 if not as much as 60% - as Mr. Collinson says. I consider that there is a small element of double counting in Mr. Collinson's assessment and I find that the prices of apartments at Concord Street have fallen by about 50% since January 2006. Accordingly, the diminution in value consequent upon the defects at Concord Street, and which - as between the Claimants and Barr - I regard as largely the responsibility of Barr (because I have rejected the allegation made against the Claimants in relation to the performance of the management company) have caused a further 20% loss in value.
286. However, although I regard much of this additional diminution in value as being attributable to Barr's poor workmanship, it is reasonably obvious to me that it cannot all be attributable to those elements of the workmanship which have given rise to liability under section 1 of the Act. Some of it must be attributable to the fact that the apartments were not constructed to the specification against which they were marketed. In addition, some of it will be attributable to visible defects for which I have found that Barr is not liable to the Claimants, such as the poor state of the render, which detract from the overall appearance of the buildings and thereby affect the value of the apartments.
287. Doing the best I can I consider that if the defects for which Barr is liable under the Act did not exist, the element of diminution in value attributable to the other matters would probably have been about 10% - in other words 50% of the overall additional diminution in value beyond that attributable to the fall in the market.
288. So, in theory, if the defects for which I find Barr is liable were to be repaired, the apartments concerned would regain only 10% of their current loss in value. However, both experts initially agreed, in my view correctly, that there would be some significant residual blight in spite of the completion of remedial works. I do not accept Mr. Collinson's revised view that, in the absence of any appropriate warranties, there would only be limited blight for no more than six months.
289. It is difficult to derive much further assistance from the evidence of the expert valuers because their views were made on the basis of various assumptions as to the nature and extent of the remedial works required which, through no fault of theirs, do not correspond with the findings that I have made. I must therefore do my best to follow the approach indicated by their evidence.
290. I consider that it is unlikely that satisfactory warranties will be forthcoming following completion of the remedial work, save in respect of the roof. This is because much of the work will consist, in effect, of patchwork repairs for which contractors may be less willing to give guarantees. But even if guarantees could be obtained, I consider that they would probably make little difference given that there would still be numerous unrectified defects (which I find is likely to be the case given the financial circumstances of many of the leaseholders) and, in any event, if there had been an original guarantee in respect of the common parts it would be due to expire in 2016.
291. In the circumstances I find that there will be some blight on the value of those apartments where remedial works are undertaken. For the reasons I have already given, I consider that the proportion of such blight that is attributable to the matters for which Barr is liable under the Act is about 10% of Mr. Richardson's equalised value for January 2006 (taken from the spreadsheet attached to his final report). I do not think that such blight will be transient: in the light of the views expressed by the experts in their joint statement, I consider that it is likely to last for four to five years following completion of the remedial works.
292. It follows that I regard Mr. Richardson's estimate of 35% as being too high. Although my figure of 10% is in line with one of the figures put forward by Mr. Collinson, I hope that I have made it clear that I have arrived at it by a completely different route and for different reasons. In addition, I reject his evidence that this blight would only be short lived.
293. It is, I think, obvious that blight will gradually diminish with time. I understood from Mr. Richardson's first report that his 35% was, in effect, an average figure over the blight period. In other words, the extent of the blight would be much greater initially and would then diminish during the blight period. My figure of 10% is also an average and so, adopting a straight line approach, it would represent the level of blight at the midpoint of the blight period.
294. A further point raised by Barr is that the Claimants can only recover damages for blight if they can prove that they will sell their apartment within the blight period. In my view, there are two difficulties facing this argument. First, this is a matter which, in practical terms, is almost incapable of proof. A claimant may wish to sell his apartment in principle but only at a reasonable price. The latter will in large measure be dictated by future movements in the market which, of course, cannot be either proved or predicted. Second, even if a claimant were to say "Yes, of course I will sell my apartment at the earliest opportunity", knowing that this might attract an additional component to the damages, this evidence would be open to challenge on the basis that it is bound to be tainted by the exigencies of the litigation so that it is inherently unreliable. I consider that neither of these difficulties can be dismissed as fanciful.
295. It was clear from the evidence that many of the claimant leaseholders would be only too glad to sell their apartment if they could: the Claimants' closing submissions give several examples of this (see paragraph 1035). It is in my view not correct of Barr to say that a leaseholder who retains his property through the blight would suffer no loss. His or her loss is the inability to realise the stigma-free value of the apartment during the blight period should he or she need to do so. That is an actual, not a contingent loss.
296. I see no way in which this can be treated as a loss of a chance because it cannot be assessed arithmetically. If an owner's decision to sell his apartment is dependent on factors such as the current state of the market, his own financial position at the time and so on, there is no way in which one can begin to assess the probability that the relevant circumstances will arise during a particular period (unless, of course, those circumstances have already arisen). The closest analogy of which I am aware is what is known in personal injury cases as a Smith v Manchester award, that is a sum by way of general damages that may be awarded to a claimant who has not lost his employment as a result of the injury (or has acquired some other employment) but whose condition is such that, should he lose his job through redundancy or some other reason not related to his injury, he will be under a handicap on the open labour market as a result of his injury. This is not a type of loss that can be evaluated as a loss of a chance because it cannot be assessed arithmetically.
297. It seems to me that a similar approach would be appropriate here. The starting point is to take the 10% diminution in value attributable to blight which I have already concluded is appropriate, and to discount that by a modest proportion to reflect the fact of accelerated receipt (because the Claimant is receiving compensation now and not at the midpoint of the blight period). A further deduction must then be made to reflect the possibility that the particular Claimant will need to put his apartment on the market during the blight period. This is necessarily a rough and ready exercise and I consider that the justice of the case would be met by reducing my 10% starting point by just over half to reflect these two factors.
298. I can take Ms. Lingwood's case as an example. In the case of her apartment the equalised price at January 2006 (taken from the spreadsheet attached to Mr. Richardson's report of 12 December 2013) is £97,600. So in her case I would award general damages for blight in the sum of £4,500. It does not matter that in fact she purchased her apartment for much less than the equalised price, because the price she paid reflected not only the fact that it was a repossession but also the fact that the market had dropped considerably by July 2009. The object of Mr. Richardson's exercise in equalising the prices was to eliminate the factors that were not connected with the market value of the apartment, such as a sale in unusual circumstances or the buyer being in a position to negotiate a special discount. I therefore consider that his equalised value is the correct starting point irrespective of the actual purchase price.
299. Adopting a similar approach in relation to the other owners who gave evidence at the trial, I make the following awards in respect of blight (the sum being per apartment, not per person):

Claimant	Appt No	Damages
Lingwood	12	£4,500
Goulding	14	£4,500
Waller/Taylor	23	£5,750
Sutton	26	£6,250
Priceman	35	£6,250
Wood (Michael)	48	£4,350
Wood (Michael)	64	£4,350
Whaley (Mr. & Mrs)	65	£6,250
Booth (Mr. & Mrs)	66	£5,200
Whaley (Mr. & Mrs)	69	£6,250
Haslehurst (Mr. & Mrs)	72	£6,000
Goulding	78	£4,500
Munoz Lopez	80	£4,500
Priestley	122	£4,350
Watson	127	£6,250
Wood (Barry) (Mr. & Mrs)	133	£4,650
Ridgway	149	£5,750
Watson	163	£6,250

300. I see no reason why a similar approach should not be adopted in respect of all the other apartment owners who did not give evidence. However, it may be that in one or two cases there are circumstances which would call for some adjustment to the general approach that I have outlined above, although I have some difficulty in envisaging what those circumstances may be - unless the apartment in question is currently on the market. I would hope that awards for those Claimants could now be agreed in the light of the principles that I have discussed and applied above. If not, they will have to be determined by the court.

Damages for distress and inconvenience

301. The Claimants who occupy or have occupied their apartments claim damages for distress and inconvenience. Those in this category who gave evidence are as follows: Ms. Lingwood, Mr. Sutton, Mr. Booth (whose wife is also a Claimant), Mr. Munoz Lopez, Mr. Priceman and Miss Priestley.
302. The summary of the evidence of each of these Claimants in Appendix A identifies the problems that each had with his or her apartment. For the most part, that evidence was not challenged and the court was able to form a reasonably clear picture of the distress and inconvenience that those who gave evidence had suffered. It is apparent from Appendix A that not all claimants suffered from all the defects for which I have found Barr to be liable under the Act, or for the same periods. It seems to me self-evident that any award of general damages for distress and inconvenience must reflect the period over which it was suffered. By contrast, I consider that it would be both difficult and invidious to make individual assessments of the level of distress caused by, say, a leaking shower tray according to whether a particular individual was particularly robust or unduly sensitive. I propose therefore to award damages on the basis that each claimant is a reasonably robust individual: indeed, from what I saw of the witnesses that was in fact my general impression. So to that extent, a fairly broad brush approach is called for.
303. The Claimants submit that an appropriate sum under this head would be £2,500 per annum, increasing to £3,000 per annum during the course of any actual remedial works. The appropriate sums for each claimant assessed on this basis are set out in a table in the Claimant's closing submissions (paragraph 1046). Barr did not dispute the entitlement to general damages as a matter of principle, but submitted that the amount should be very modest. The amount suggested was £200 per annum on the basis of a decision of Ramsey J in Eiles v The London Borough of Southwark [2006] EWHC 1411 (TCC), at [152] - [157], and of the Court of Appeal in Berent v Family Mosaic Housing [2012] EWCA Civ 961, at [39] - [40]. Both cases concerned cracking caused by tree roots and so the inconvenience and discomfort, except during the period when repairs were carried out, was pretty minimal. This was made clear by Ramsey J. The decision of the Court of Appeal in Berent is in my view of limited assistance because the court concluded that there was no reason to make an award that was higher than the claimed figure of £200 per annum. By contrast, in this case the inconvenience caused by the malfunctioning intercom was clearly fairly serious and the inconvenience, discomfort and distress caused by the damp and mould, in particular from the leaking shower trays, was in my judgment very significant.
304. In the recent decision of the Court of Appeal in West v Ian Finlay & Associates [2014] BLR 324, the court said that awards of this type should be modest and subject to a maximum of about £3,000 per annum (at current prices). That case involved the failure of damp proofing work and whilst the remedial work was carried out the claimants lived in a nearby rented house. The court considered that £2,000 per annum would have been an appropriate rate for Mrs. West and £1,500 per annum an appropriate rate for Mr. West. The stress and anxiety suffered by Mrs. West was described by the court as "undoubtedly significant", but not at the top of the scale.
305. I consider that the defects that have caused the most distress and inconvenience in this case are the problems with the shower trays (and consequent mould and damp), the presence of mould and damp from other causes and the problems with the intercom system. However, it has to be borne in mind that there are a number of defects for which Barr is not liable under the Act (for example, the cracking of the render) and these have to some extent added to the overall stress suffered by the occupiers. For this reason, I do not consider that an award at the top of the range would be appropriate for any of the Claimants in this case, even though it is clear that many of them have suffered a great deal of stress and anxiety to an extent that would otherwise call for an award at or close to the top of the range.
306. I consider that the distress and inconvenience caused by the damp and mould was very significant and, of course, in some cases and for some periods occupiers had to put up not only with that but also with the inconvenience caused by the malfunctioning intercom. Where that occurred, I consider that the degree of distress and inconvenience was greater than that suffered by Mr. and Mrs. West (even after making due allowance for the matters I have mentioned above).
307. Doing the best I can with all these considerations in mind, I consider that the appropriate levels of award are as follows. For periods when the only real sources of inconvenience or annoyance were the non or malfunctioning intercom and the hazardous walkways, I consider that the appropriate level of award is £750 per annum. Where, at the same time, an occupier also suffered from damp and mould, I consider that the appropriate figure is £2,250 per annum. Whilst I have found that Barr is liable for the problems with the internal doors, this is principally on the ground that it increased the risk in the event of fire rather than because of the degree of inconvenience to the occupiers. I have therefore not increased the awards to reflect this aspect. In the case of Mr. and Mrs. Booth and Mr. Priceman, they had a child or children in the apartment for some of the period, and I have increased the award slightly to reflect this on the ground that a parent with a child is likely to be much more anxious in circumstances such as these than an adult with no children.
308. Accordingly, my assessment of the entitlement of each of the Claimants named above is as follows:

Claimant	Period	Rate	Amount	Total
Lingwood	7.09 - 10.15	£2,250	£14,060	£14,060
Sutton	9.05 - 10.15	£750	£7,560	£7,560
Booth (Adam)	7.06 - 1.10 2.10 - 10.11	£750 £2,250	£2,625 £3,735	£6,360
Booth (Sofia)	7.06 - 1.10 2.10 - 10.11	£750 £2,500	£2,625 £4,150	£6,775
Munoz Lopez	2.07 - 8.08 9.08 - 10.15	£750 £2,250	£1,125 £15,750	£16,875
Priceman	1.10 - 10.15	£2,500	£12,940	£14,375
Priestley	1.07 - 1.09 2.09 - 8.11	£750 £2,250	£1,500 £5,625	£7,125

309. Where the Claimant still occupies his or her apartment, I have taken the endpoint of the period as October 2015 on the fairly arbitrary assumption that the relevant work will have been carried out by then. In the circumstances of this case, and having regard to the amounts that I have awarded, I do not consider that any further increase in the award is justified to reflect the period when remedial works are actually carried out. This is one of two reasons: either the occupier will be in alternative accommodation (the reasonable cost of which will form a separate and recoverable expense) and not putting up with the defects, or he or she will be putting up with the work but doing so in the comfort of knowing that things are about to improve. In any event, I do not know how long the remedial works will take in the case of any particular apartment.

Additional heads of loss

Expenses already incurred in the rectification of defects for which Barr is liable

310. I have already mentioned that where a Claimant has already spent money in rectifying, or attempting to rectify, a defect for which Barr is liable under the Act, that Claimant is entitled to recover that sum. To take Ms. Lingwood's case again, it was her evidence that she spent £1,600 in rebuilding her shower. In my view she is entitled to recover that sum. In addition, I consider that she is entitled to recover the sum which she had to pay as her proportion of the cost of the temporary repairs to the penthouse balconies (I understand that figure to be £89.47) and the installation of the temporary intercom system.
311. It was submitted on the Claimants' behalf that they have all spent time and effort in dealing with the defects and that all of them have probably spent small sums here and there of which they have kept no account and that they should be compensated for these losses by a payment of £500 to each Claimant. Whilst I can see the force of this in terms of rough justice, it is in my view too well settled that special damages of this type must be proved.
312. Whilst Barr's description of this proposed payment as a "gratuity" is in my view unnecessarily dismissive, I agree with Barr that I should not award such a sum. However, where a Claimant has identified in his or her witness statement particular expenditure incurred in the rectification of a defect for which I have found Barr to be liable, since I find that each of the Claimants who gave evidence was a truthful witness I consider that he or she is entitled to recover that sum. If, for whatever reason, an item of expenditure of this type is not mentioned in a Claimant's witness statement, but is recorded in tab 3 of the relevant E bundle, then I consider that that also should be treated as having been proved (unless specifically challenged in cross examination).
313. Such items of expenditure are not substantial and I therefore expect the parties to agree a schedule showing the relevant amount of expenditure for each Claimant. If any such items cannot be agreed, then the matter will have to be resolved by the court at a further hearing.

Legal, Planning and Building Regulation fees

314. I see no reason why such fees should not be recoverable in principle if it can be demonstrated that they will be incurred. This is not a matter that I can resolve at this stage and is one which, if it cannot be agreed, will have to be referred to the court for determination at a future hearing.

Other matters raised by the Claimants

315. The Claimants also make claims under further heads of loss. For example, loss of rent whilst remedial works are being carried out, the cost of alternative accommodation and removal and storage costs.
316. I consider that these are in principle recoverable heads of loss, but until the precise extent of the work required to each apartment or to the common parts (such as the roof) has been assessed in the light of this judgment, it is not possible to say which owners or occupiers might have to move out or for how long. For example, I can see that it is very likely that the occupiers of the penthouse apartments will have to move out whilst the roof on their block is replaced, but at this stage I am not in a position to say whether this will or will not be the case.
317. Unfortunately, I see no alternative but to leave these issues to be addressed at a further hearing when the relevant material can be put before the court and the matters can be determined.

Concluding observations

318. I hope that in this judgment and the appendices I have addressed all of the points that call for determination at this stage. However, in case I have not this judgment will not be handed down in final form until any outstanding matters that should have been included have been dealt with.
319. I have, unfortunately, had to leave a number of matters unresolved, but I have attempted in this judgment to provide guidance which ought to enable the parties to resolve those matters by agreement. One important issue is the question of whether each of the other non-lead apartments in which similar external/internal defects have been recorded were unfit for habitation on completion in the light of them. I suspect that the answer in almost every case will be yes, but as I have already explained I do not feel able to make a determination to this effect without considering the evidence (whether written or oral) of the owner or occupier as to the impact of the defects.
320. It may be necessary to have a further hearing to determine the outstanding issues, unless it is agreed that this (or some of them) can be done on paper.
321. Finally, I am grateful to counsel and solicitors on all sides for their assistance. I offer my apologies to the parties for the length of time that it has taken me to finalise this judgment: I have done it as quickly as I could, having regard to the complexity of the issues raised and the relentless demands of other work.

Note 1    For the purposes of this discussion, I am leaving out of consideration buildings such as schools or hostels which may have dormitory accommodation.    [Back]

Note 2    The Claimants reserved their right to challenge this in a higher court.    [Back]

Note 3    This must not be confused with the date on which the cause of action accrues, which may be when the relevant work is actually carried out rather than the date of completion: see Thompson v Clive Alexander & Partners (1992) 59 BLR 77.    [Back]

Note 4    No.  75 is not owned by a claimant, but the tenant of that apartment, Mr. Haim, gave evidence.    [Back]

Note 5    This would be necessary only if Barr were to appeal my conclusion that the top floor apartments are unfit for habitation because of the existence of a risk to the structural integrity of the roof over the longer term.    [Back]