William Webb (instructed by Birketts LLP ) for the claimants; Seb Oram (instructed by Howard Kennedy Fsi LLP ) for the first defendant; Katie Powell (instructed by Simmons & Simmons LLP ) for the second to fourth defendants.
The first defendant developed a block of flats and sold long leases on a number of the flats to the claimants. The first defendant retained the second defendant to carry out periodic inspections with a view to producing certificates to or for the benefit of potential purchasers, which certified that the work had been constructed to a satisfactory standard and in compliance with building regulations. A number of serious defects arose within the flats and in the common parts. The claimants brought claims against the first defendant for breach of its agreement with four of the claimants and breach of its repairing covenant with all claimants. The claim against the second defendant was for negligence by way either of negligent misstatement or of a warranty or of some overarching tortious duty in failing to identify the defects. The defendants raised limitation of the claims as a defence.
Applying established legal principles, the repairing covenants imposed wide obligations on the first defendant to repair, renew or vary parts of the building. There was no doubt that an actionable duty of care was owed to the claimants by the second defendant both in relation to the issuing of the certificates as well as the execution of the inspection services referred to on the certificates. That duty stemmed from a special relationship and was one which was at least akin to contract. The certificates issued by the second defendant could only be enforceable as warranties if they had been supported by consideration. There were enforceable contractual warranties from the second defendants to the first to sixth claimants. The claims were not barred by limitation. In dealing with the individual defects, the judge identified what the reasonable cost of reinstatement or repair should be.