The High Court has granted leave for 832 apartment owners to issue proceedings against Spencer Dock Development Company Limited and Faxgore Limited, both in liquidation, over alleged defects at the Spencer Dock Development.
In a judgment delivered on 24 September 2021, Ms Justice Stack said the proposed claims could not be dealt with more conveniently through the companies’ liquidations. She rejected the liquidators’ objections and granted the relief sought in two applications under section 678 of the Companies Act 2014. The judgment did not determine whether the alleged defects exist or whether either company is liable.
The owners of 616 apartments are the intended plaintiffs; some apartments have joint owners. The proposed claims concern alleged design and construction defects, mainly involving windows, doors, vents and sealing. The draft summons seeks damages for claims including breach of contract and negligence, as well as orders requiring defects to be rectified.
The owners already have proceedings against contractors and professionals involved in the development, and the development’s management company has separate proceedings against SDDC and others. Justice Stack said the owners had reason to sue the companies to preserve their position, including against a possible defence under the Civil Liability Act 1961. She also found the claims were not clearly statute-barred at this stage. An email referring to remedial works in 18 apartments in 2008 did not establish that the claims concerning those or other apartments were clearly out of time. Limitation remains an issue for the proceedings.
The liquidators also argued that the claims should not be brought together. The judge held that the owners’ claims arose from the same development and shared common factual and legal issues, making joinder in one set of proceedings appropriate.
The insurer, Syndicate 4472 at Lloyd’s of London, is bringing the claims in the owners’ names under latent-defects policies. The judgment records a dispute about whether the insurer could control proceedings for all owners when cover had been confirmed for only six units. Justice Stack did not resolve that dispute on the leave applications. She said it could be addressed in the intended proceedings and that no damages could be paid to the insurer unless cover had been confirmed and the owners indemnified.
The court listed the matters for a further mention early in the new legal term to deal with costs. The leave ruling permits the proposed proceedings to be issued; it is not a finding on the merits of the claims.