Our building was constructed three years ago by a local builder who contracted pilers to do the foundations. Now cracks have appeared, and tests have proved that the piling is to blame. Our solicitor has advised us that the chance of the building being rebuilt at the cost of the piler's insurer is very probable. However, the consequential losses we will incur by moving to temporary premises, disruption and stress are not redeemable. Why not?
The losses you may recover as a consequence of the insufficient piling will turn on the terms of your contract and the losses you seek to recover.
Subject to the particular terms of your contract, in cases where defects are so serious that there is no option but to rebuild, the usual remedy will be the cost of its replacement.
The courts have held that damages for distress, inconvenience and discomfort are generally not recoverable by a commercial enterprise, although they may be by a homeowner.
As for your ability to recover the costs of relocating while rebuilding is carried out, this may well be recoverable as a separate head of loss arising out of the need to rebuild your premises, as it is for all losses that are natural consequences of a breach of contract. However, again, whether this is applicable to you will depend on the terms of your contract. If, for example, you are suing the piling subcontractor under a collateral warranty, and the warranty limits your damages to the cost of remedying defects, these losses will be irrecoverable.
More generally, if the reasons for your solicitors' advice are unclear we would suggest you ask them to explain.
Cracking answer
We are involved in a housing scheme where we foresee a dispute. While construction work was in progress, a housebuilder on a neighbouring site began sheet-piling works. We were not notified of its intention to do so, and as a consequence, walls we constructed near the boundary were damaged. We are seeking to obtain an extension of time from our client but do not believe this incident would be covered by the "relevant event" or "specified peril" provisions in the JCT contract. Please advise whether we have any legal standing in this matter, for example under case law.
All of the principal JCT forms include a list of events that would entitle you to an extension of time. However, as you say, none seem to cover damage caused to your walls by a contractor on a neighbouring site that is not related to your project and not employed by your employer. Neither force majeure nor loss of damage caused by specified perils would cover this situation and there does not appear to be any relevant case law that would help you either.
However, even though you cannot claim an extension of time from your client, you may be able to recover the losses that you suffer as a result from the all-risk insurance that either you or your employer should have taken out. The all-risk insurance envisaged under the JCT forms should provide cover against physical loss or damage to work executed and against the reasonable cost of any shoring and propping of the works. However, it is unlikely that this would cover any other losses that you suffer (for example liquidated and ascertained damages levied by the employer).
You may also wish to pursue a claim in tort against the housebuilder on the neighbouring site. Depending on whether its sheet piling works actually did cause damage to your new walls, you may have an action under the tort of private nuisance. The housebuilder would almost certainly owe you a duty of care not to cause nuisance and if you could show that the housebuilder did not take reasonable and proper care and skill in his works then it may have breached his duty of care to you, entitling you to damages.
Where’s my money?
I completed a paving job at the end of May 2002 and I am still without a practical completion certificate from the housebuilders. They deducted retention and will not reply to my correspondence. What can I do to get my money back?I am assuming that you are employed under a written subcontract for the paving. I also assume that this contract gives the housebuilder the right to deduct retention from payments, on the basis that they are repaid in two instalments at the date of practical completion and the end of the defects liability period. Taking into account the nature of your trade and the fact that you finished nearly a year ago, it seems likely that the housebuilders’ contract has at least reached practical completion. This suspicion is reinforced by the fact it has not replied to your letters. As a first step, I would advise you to call the architect to check what stage the project is at. If possible obtain photocopies of the relevant certificates. If the project has reached practical completion, write to the housebuilder again, setting out the retentions withheld and referring to the date of practical completion (or issue of defects liability certificate) and your claim to repayment of the relevant sum. You should give a reasonable period for the housebuilder to pay the outstanding money (say 14 days) but point out if payment is not received you will go to adjudication. And if it does not pay, do just that …
Postscript
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If you have a query for Berwin Leighton Paisner's team, click on to the Legal Aid page at www.building.co.uk
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