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Talk is cheap - not talking isn't

Disputes require good communication if additional costs are not to be incureed by unnecessary delays. Guy Cottam takes a look at an example of how not to do it

Every now and again when reading law reports you come across a saga which in itself does not provide any new basic legal principle, but nevertheless provides a number of lessons on the conduct of a dispute.

One such case, Terry and Suzanne Iggleden v Fairview New Homes, was heard earlier this year before Judge Peter Coulson, QC. The sum claimed was around £250,000.

The Iggledens bought a house built by Fairview in Shooters Hill, south London, in December 2001. The house contained a number of faults which were identified in 2002 and which were supposed to be rectified in January 2003. Nearly six years later, no remedial work of any kind has yet been carried out.

Before and during the hearing Fairview accepted liability for the vast majority of these defects. The debate before the court concerned the extent of the work necessary.

A snagging list was prepared in February 2002, and early in April that year Fairview agreed to carry out the work on the list. However, later that month Mr Iggleden wrote two different letters to two different directors of Fairview raising further complaints. Again, Fairview largely accepted these complaints and, on May 2, provided copies of its proposed remedial work. This included for the lowering of a drainpipe which ran at right angles across the entrance to the garage, which had been flooded.

On May 22 Mr Iggleden informed Fairview that he had appointed an independent surveyor, a Mr Smith, who had produced an independent schedule of the defects. An inspection was then carried out together by Mr Smith and Fairview’s surveyor, which resulted in a further report, dated July 12, by Fairview’s surveyor, accepting some of the complaints and rejecting others.

Around this time Mr Iggleden made a formal request to the NHBC resolution service. He continued to write separate letters to the two directors of Fairview and in one dated July 29 2002 raised some new complaints and included a document comparing the reports of Mr Smith and Fairview’s surveyor. This made clear that the disagreement was over the scope of the work needed.

On August 9 2002 Fairview suggested the two surveyors “should meet to discuss the -detail in their respective reports and your comparison document”, to agree a final list of works. Fairview said it would meet Mr Smith’s reasonable costs and further suggested the works should be inspected by “your professional surveyor” as they proceeded and Fairview would be responsible for payment of his reasonable fees.

On August 13 2002, Mr Iggleden rejected this suggestion. “Having been in contact with both our solicitor and our surveyor we would advise that a discussion meeting between the two professionally qualified surveyors would be fruitless,” wrote Mr Iggleden. “We are not prepared to compromise on the repairs document which, to date, Fairview have not yet agreed to carry out.”

On August 21 2002, the NHBC formally informed the Iggledens that the complaints would be subject to inspection and resolution by the NHBC. A report was produced on October 29 2002 which found all but four of the complaints were justified. This report was vague over the remedial actions necessary but did include an item not previously raised concerning the levels of the second floor shower room. Fairview undertook to carry out the works recommended in this report.

In November 2002, the Iggledens said they were concerned by the out-of-level of the floor in the master bedroom. In reply Fairview said it would be prudent for the levels to be investigated with the carpets partially removed. This would take five weeks and require the Iggledens to move out. Fairview sent a cheque for £2,150.27 to cover the inconvenience. It was also agreed that the costs of the work would be £4,000.

Just as these works were about to start the Iggledens sent a new report by a Mr Farrell (who it appears had replaced Mr Smith) which proposed different works at the garage to those agreed by Mr Smith. Mr Farrell insisted his proposal should be carried out. Fairview suggested this should be referred to the NHBC for resolution but this was refused.

At the end of January 2003, the Iggledens’ solicitor entered the fray and on February 25 2003 wrote enclosing a new report by Mr Farrell.

At the beginning of May it appears the Iggledens had engaged a Mr Griffith to act as their engineer, but did not inform Fairview. An inspection was carried out on June 4, 2003 at which Mr Griffith was not present, but which resulted in agreement that the second floors were indeed defective.

On June 5, Fairview’s surveyor produced a report consisting of two schedules – agreed and disputed works – and asked Mr Farrell to reply. He did not, in spite of reminders, until August 21, when he wrote: “There is no point in reaching agreement on the general defects in the house as these works cannot be carried out until all matters have been resolved.”

The inspection of the first and second floors did not take place until January 2004. The day before the inspection the Iggledens’ solicitors wrote saying that due to difficulties in storing the furniture only part of the floor on the first floor had been lifted. Insufficient flooring was therefore available for a meaningful investigation.

During the first five months of 2005, Fairview’s solicitors were chasing to progress the matter, but unknown to them the Iggledens’ solicitors were pursuing the Technology and Construction Court for a judge or arbitrator to be appointed. No further progress was made until the action was started in late summer 2006.

Almost all the remedial actions had been agreed from the start and the cost for other proposed works were agreed between the surveyors but without agreeing liability. This was left to the judge.
The judge found that the Iggledens’ team was responsible for three years of the delay for which they were not entitled to compensation. The outcome was that Fairview should pay £59,735.42 in compensation to the Iggledens, but the real question arising from this saga will concern who pays the costs, which will have undoubtedly exceeded this amount.

Unfortunately I have no knowledge of that outcome but I doubt if either party will have gained from this drama.