Is it reasonable to demolish and rebuild a defective building rather than repairing the individual defects? This was the basis of the recent case of McGlinn v Waltham Contractors Ltd & Others [2007] EWHC 149 (TCC). Outlined below are details of this recent case.

A luxury mansion called ‘Maison d’Or’ was built for the claimant in Jersey. No formal written instructions were agreed with either the architect or the quantity surveyor. Whilst a building contract was considered it was never completed between the employer and the Contractor.

Background

The building was completed but remained empty for the following three years as the claimant was not happy with the standard of construction. Defects had been identified by a number of the professionals involved on the project. The employer, Mr McGlinn, was not happy and in an attempt to conclude the review of the condition of the property he instructed a second firm of architects to carry out a further detailed investigation into the works to identify the defects. In 2005, on the advice of the investigating architects, the house was demolished. It was never rebuilt.

The employer brought a claim against the architect, quantity surveyor, contractor and the engineers for damages for breach of contract and a claim in negligence. The primary claim was based on the cost of the demolition works and the estimated cost of rebuilding the house in the sum of £3,649,481. An alternative claim was also pleaded based on the cost of repairing the individual defects in the sum of £2,487,246.29.

Decision

The claim against the Quantity Surveyor was dismissed but the claims against the other parties were upheld. This then left the question of how the damages should be assessed. The Employer was hoping that the judge would find in favour of his primary claim relying on the case of The Board of Governors of the Hospitals for Sick Children and Another v McLaughlin & Harvey plc and others [1987] 19 Con LR 25 (the Great Ormond Street Case) which established the principle that if it is reasonable for a claimant to take expert advice on rectification works required to a defective building, it is likely that he will be able to recover the costs of the works carried out on the recommendation of the expert.

However, the judge decided that this case was different from the Great Ormond Street case in a number of ways. Firstly, the defects were mainly aesthetic and not major structural defects as they had been in the Great Ormond Street case. Secondly, in this particular case there were a number of defendants and different claims. Finally, the property had not been re built.

The judge decided that whilst reliance on an expert would be a consideration in deciding whether a claimant had acted reasonably, it did not automatically mean that they had acted reasonably in all the circumstances. In this case it would be extremely difficult to split the costs of the demolition and rebuild between the defendants who had individually been responsible for a number of the defects. Some had only been responsible for a small number of the defects. The costs of rectifying the defects had been agreed between the parties whereas the costs of the rebuild were only based on estimates. The judge therefore decided that each of the defendants should be responsible for paying for the costs of repairing the defects for which they were individually liable.

Top tips

This case illustrated a number of important points:

1. When faced with a defective building, an employer should take expert advice on the best way to rectify the defects but must still consider whether it would be reasonable to follow this advice in their particular circumstances.

2. Demolition of a building should always be a last resort.

3. Damages will be awarded on what is reasonable based on the individual circumstances of each particular case.

4. The importance of having a written contract in place between the employer and all professionals employed on a project before any building works are commenced to ensure that all parties involved on the project are aware of the full extent of their obligations and liabilities.

If you have any concerns regarding claims for defects the warranties, please contact Jennifer Kirkhope or Catherine Kay on 0161 234 8861.

Disclaimer

The content of this article does not constitute legal advice. You should always consult a suitably qualified lawyer for professional advice about any specific legal matter of concern to you. George Davies Solicitors, its partners and staff do not assume any responsibility for information contained within this article and disclaim all liability relating to such information.

About George Davies Solicitors

George Davies was highly rated, in the North West, in nine different categories of the 2005 Legal 500 review and in Chambers and Partners UK Directory. They specialise in all aspects of commercial law and boast a substantial Property Department within which sits a niche Construction team with experience in a full spectrum of construction law services. The firm was commended in the Legal 500 for their strong movements forward in a variety of property and construction deals and Chambers specifically mention its achievements in Construction. The Head of Construction, Catherine Kay can be contacted on 0161 234 8861 or emailed at catherinekay@georgedavies.co.uk

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