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Last edited 08 Sep 2014
Hunt and others v Optima (Cambridge) Limited and Strutt & Parker
This decision was overturned on appeal in 2014 - see Hunt v Optima (Court of Appeal)
This case concerns claimants who brought proceedings against the developer/landlord of a new build residential development for various defects. The claimants also joined the architect into the proceedings claiming negligence in carrying out its inspections and issuing certificates.
The 8 claimants purchased flats in Peterborough, Cambridgeshire and were long leaseholders. Shortly after purchase, various defects appeared including flooding, noise problems and floor deflections culminating in the current proceedings where 19 defects were identified to individual flats as well as to the common parts of the development.
The first defendant, Optima (Cambridge) Ltd, was the developer and landlord of the flats and they in turn engaged the second defendants, architect Stephen Egford of Strutt & Parker, to periodically inspect the progress of the works at various stages and issue architect’s certificates stating that the works had been properly constructed and in accordance with Building Regulations. Optima had undertaken the design of the development and appointed a number of contractors for the various elements.
The specific breaches claimed against Optima were breaches of clause 3.1 of the sale agreement and clause 4.6.1 of the claimants’ leases. Clause 3.1 required the flats to be completed in a good and workmanlike manner, with suitable materials, that the flats be fit for occupation and that the building complies with Building Regulations. Clause 4.6.1 constituted Optima’s repairing covenant and required it to maintain, repair and renew the main structure of the building.
The judge, Mr Justice Akenhead, found on the facts that Optima was in breach of both the sale agreement and terms of clause 4.6.1 due to the substandard workmanship and not maintaining and keeping the building in good repair. Optima was criticised for its poor management of the project and lack of proper co-ordination and supervision of the work which led to corners being cut resulting in extensive faulty workmanship.
The claims against Strutt & Parker were that they breached their duty of care in tort to the claimants in their inspection services and subsequent certificates. The judge found there were clear breaches of duty by Strutt & Parker in not detecting obvious defects in the works, by failing to re-inspect identified defects and by making assumptions and over relying on others to confirm that defective works had been remedied without actually carrying out confirmatory checks before issuing certificates. Referring to Mr Egford, the judge said: “He does not seem to have differentiated between what S&P had quoted to do for Optima and what he was certifying to potential purchasers.”
Mr Justice Akenhead also found that Strutt & Parker’s certificates amounted to contractual warranties based on the nature and wording of the certificates suggesting contractual intention, the acknowledgement of reliance, period of liability and that the architect was certifying inspections had been carried out.
Limitation defences were raised by both defendants in an attempt to defeat claims but section 14A of the Limitation Act 1980 came to the rescue permitting negligence claims to be brought within 3 years of the date of knowledge of the damage. The Act provides a long-stop period of 15 years from the date of breach to bring such claims. The risk in finding both contractual and tortious liability against Strutt & Parker extended the time limit for bringing tortious claims.
This case is significant for architects in terms of the nature of their appointments and the particular services they have agreed to undertake for their employer. Assessing whether the required services can be undertaken for the agreed fee is important. It will also have significance for architects’ professional indemnity insurers and the RIBA in terms of issuing guidance on the nature and wording of certificates issued, including Council of Mortgage Lenders’ certificates and the potential risks in issuing certificates without due care. Where there is doubt whether defective works have been remedied the option of withholding or qualifying certificates and limiting the number of recipients should be carefully considered rather than issuing unqualified certificates as here.
 Related articles on Designing Buildings Wiki
- Certificate of making good defects.
- Collateral warranties.
- Final certificate.
- Hunt v Optima (Court of Appeal).
- Practical completion.
- Third party rights.
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