Healys Secure Advantageous Settlement In Dispute Over Luxury Properties For Member Of The Sunday Times Rich List

18th September 2018 by

Jerome O’Sullivan, a Partner specialising in Construction Dispute Resolution, recently successfully concluded a high value and complex dispute in the Technology & Construction Court.

We acted on behalf of a corporate purchaser, whose ultimate controlling shareholder is mentioned in the Sunday Times Rich List, of two luxury detached properties located in the suburbs of Birmingham, which were purchased new for the sum of £2.5 million.

Shortly after taking possession, our clients discovered a number of serious defects throughout the properties, including flooding in the basement of one and defective roof construction on both.

The developers had constructed the properties based upon preliminary drawings prepared for planning approval purposes and had failed to commission detailed “as built” drawings in compliance with their obligations under the Construction, Design & Management Regulations 2015.

The developers had also failed to remedy a defect in the planning permission that they had obtained, despite a contractual undertaking that they would do so within 3 months of the date of completion.

The developers had taken out a 10-year NHBC building warranty policy with a sum insured of £1 million. However, the terms and conditions were such that they were of little or no benefit to our clients.

As the developers continued to obfusticate throughout the Pre-action Protocol period, proceedings were issued in the High Court in July 2016. The developers failed to file a compliant Defence. We therefore filed a successful application to the Court, who ordered them to file a compliant Defence.

It became clear during the proceedings that the developers had commissioned a number of expert reports, which they had not disclosed to our clients or the Court, suggesting that their experts’ opinion in relation to the defects concurred with our client’s position.

While the parties were engaging in the Court-ordered disclosure process, the parties attended a 1 day mediation in May 2017, during which the developers continued to take an unrealistic position. However, after intense negotiations during the weeks immediately after the mediation, Jerome secured a very advantageous settlement for our clients, including recovery of their legal and building professional’s fees, the terms of which included obtaining cleared funds in full from the developers the same day the compromise agreement was entered into.

This was another successful resolution for our clients by our experienced Construction Dispute Resolution department.