"A CASE OF INCOMPREHENSIBLY, INCOMPETENT, WORKMANSHIP.""
The I-Design Construction Ltd litigation was a truly horrific saga that almost resulted in the collapse of a Property and the death of 2 pensioners. Nevertheless, the elderly homeowners were subjected to a year long campaign of harassment at the hands of the contractors whom took their life savings and abandoned site in winter leaving them in a home without central heating or hot water.
I-Design Construction Ltd, Mr Paul Archer (3), Mr James Hooker (4) & Mrs Clare Archer (5) - v - Mr David Renwick (Plymouth CC 4th July 2022) (unreported)
We acted for the successful Defendant/homeowner whom was awarded £95'635.04 Damages pursuant to a successful counterclaim. Further, the company's directors were made joint and severally liable for the costs of the litigation ordered at £176'638.92 pursuant a successful Non-Party Costs Order.
BACKGROUND
The 1st Claimant, I-Design Construction Ltd (now in liquidation) was an alleged construction company operating in south Devon. The company advertised itself as being trusted by homeowners for 25 years but only operated for 4 years from the date of incorporation to being put into liquidation. It was its Managing Director Mr Archer's 4th company in 10 years.
The 3rd & 4th Parties were the company's joint-owners and sole directors. The 5th Party took an active part in the running of the company but was neither a director nor owner.
The Defendant/Part 20 Claimant was an elderly homeowner whom employed the Claimant to undertake a simple loft conversion at his only home. He had lived in the Property with his family for over 35 years and had entered into a verbal contract with IDC.
THE FACTS
The works commenced in late March 2020 and were for 3 months work. There was no dispute between the parties that an initial delay caused by the outbreak of Covid-19 was unavoidable. The homeowner also readily accepted that supply lines at re-opening from lockdown would be affected and accordingly, granted 6 months' worth of extensions together with some considerable overrun.
However, in October 2020 an alleged 1 month away from practical completion, the homeowner noted that while he had seen his insulation and other materials removed, there was no evidence that they had been replaced.
"We've been rumbled!"
The homeowner requested an inspection of the works which was surprisingly refused. Instead, the site manager exited the Property and was overhead on his phone saying "... asking about the insulation ... We've been rumbled!" Mr Hooker then immediately attended the Property to give verbal assurances that he had personally installed all the insulation and so an inspection was unwarranted.
Regardless, the inspection was undertaken which confirmed the homeowner's suspicions that his insulation had been removed but nor replaced. Mr Hooker was unable to provide an explanation and simply walked off. Incredulously, the site manager was then again overhead on his phone advising Mr Archer "install, nah we should get away with it."
That weekend, the homeowner personally undertook a full inspection of the works and found the loft and other areas barren of any insulation. The next working day Mr Hooker returned and tried to convince him that the only empty area had been the patch they had previously inspected which IDC, but that was the fault of his apprentice. The homeowner then revealed what his weekend inspection had uncovered for which Mr Hooker was again, unable to offer any explanation.
As there was no written contract with a termination procedure, the homeowner stated that this was a clear attempt of fraud for which he was considering termination. It was relied upon at trial that this amounted to a verbal reservation of rights to accept a repudiatory breach, being said in such a way that there was little doubt among the parties it went to the root of the contract. Regretfully and despite IDC's assurances they would now repair and install, the subcontractors warned that IDC would simply abandon site rather than incur the cost of completion.
Catastrophic Roof Collapse
Following the final payment prior to retention, in mid-November 2020 and as forewarned, IDC abandoned site leaving the homeowner and his family in a house that had been stripped of effective insulation, had defective cladding, a broken central heating and hot water system, numerous holes and leakages throughout the floors, doors hanging off hinges and broken furniture. Subsequent investigations by the chartered surveyor found among other defects:
The front roof was at risk of catastrophic collapse having been detached from the Property. Within 1 year from abandonment of site the wood had already started to rot due to IDC's failure to install the contractual vapor barriers.
The loft floor was only supported by 7 wood screws and would have collapsed had the homeowner decided to make use of it. This would invariably have resulted in death and/or serious injury of the occupants.
Not a single Fire Door was compliant with building regulations and were dangerous to the occupants.
THE LITIGATION
Having abandoned site, IDC sent an unscheduled invoice (No: 1172) and then frantically began generating further invoices for alleged extra-work which had never been undertaken or attempted. This amounted to an additional £10'000 although the figure was subsequently increased several times. When the homeowner refused to pay these invoices and set out in writing that the contract had been terminated, he was bombarded with regular emails mocking his mental health together with threats of further litigation and criminal proceedings if he did not pay up. It was noted that the members and employees of IDC all cc'd each other into these communications and Mr Archer seemed to find his plight very entertaining, something he would later admit.
"A minor list of snagging."
Despite the state of the Property and the danger to its occupants, IDC issued proceedings for Invoice 1172 claiming that the works were "all but complete barring a minor list of snagging." The Pre-Action Protocol for Construction & Engineering Disputes was not followed and the Claimant rejected a stay in the proceedings, refused to make any interim-payments for the urgent remedial works and rejected adjudication together with the instruction of a joint-expert which would have resulted in significant savings for all parties, especially the Claimant and its directors.
The Defendant denied liability for any further payments relying upon the following:
Section106 Housing Grants & Construction Regeneration Act 1996 (the Act). A contractor is not entitled to staged payments with a residential occupier as set out in s.109 of the Act save where agreed by the parties. Accordingly, the Defendant relied upon the Payment Schedules agreed between the parties in writing. Further;
The Contract had been for a fixed-price which was clearly stated in the Claimant's own quote. Consequently, any further work that IDC needed to undertake to bring about Practical Completion must be at the contractors expense unless otherwise agreed. And;
Pursuant to Balfour Beatty Regional Construction Ltd -v- Grove Developments Ltd [2016] EWCA Civ 990 168 ConLR 1, there can be no implied term permitting additional payments where works are delayed and the parties have agreed a finite schedule of dates for interim payments.
The Defendant counterclaimed for the cost of the remedial works, Loss of Amenities and Exemplary Damages. It was the successful Defendant's case that the abandonment of site and the state of the works amounted to a repudiatory breach of contract.
THE PROCEEDINGS
The most surprising aspect of the litigation was having commenced the proceedings, the Claimant represented by its directors refused to comply with all subsequent court orders or serve any evidence at all in support of their case. This was despite advanced notice that the Defendant would seek to hold them personally liable for costs.
THE 7 DEADLY STORIES
Instead, between the issue of proceedings in January 2021 to the Damages Assessment Hearing in July 2022, the Claimant's story changed 7 times:
Pre-termination: The insulation had actually all been installed by Mr Hooker whom had forgotten he had taken it all out again because he was worried it would get wet. That story however, didn't explain where the insulation had gone or why nobody had ever seen it. So;
4th March 2021: In place of a Defence to the counterclaim, the Claimant served an unsigned counterschedule of loss arguing that the substantial defects identified by the Building Inspector which included the non-compliant fire doors were not part of the contract. That still didn't explain where the insulation recorded on the approved plans and the original insulation had gone. So;
14 March 2021: The Claimant wrote an open letter to the court now arguing that the works were no longer complete barring a minor list of snagging but instead the contract had been frustrated as they had been working under duress. This letter contained cropped photos of the Approved Plans with all reference to insulation removed and dishonestly stated that a Part 20 Defence had been served and acknowledged. The Defendant had retained copies of the Approved Plans and so was able to evidence this deceit while the Claimant was unable to produce its Part 20 Defence. Accordingly, Judgement was requested.
15 April 2021: The Claimant applied to rely upon their 1st Amended Particulars of Claim for a substantially increased claim. Surprisingly, s.109 of the Act was still relied upon but the works were no longer frustrated. Instead, the works were back to being complete barring a minor list of snagging and the Defendant had terminated the contract without notice. This still failed to address the issue of unscheduled Invoice 1172 and the imagined extras. So;
19 May 2021: The Claimant served its 2nd Amended Particulars of Claim which again relied upon s.109 of the Act which still had no application to a contract with a residential occupier. However, the defect of the unscheduled invoice 1172 was cured by pleading that invoice 1172 actually came before invoice 1159 which the Defendant had paid. To support this, a little arrow had been doodled on the payment scheduled (the Amended Payment Schedule) putting it before Invoice 1159 and an additional payment date scribbled on the bottom. Further, scribbled on the sides was a note saying when it had been emailed to the Defendant and agreed. Accordingly, the Defendant relied upon the digital original exchanged between the parties which didn't have the additional payment date and whose authenticity could be confirmed by the metadata. The Defendant then put the Claimant to proof as to their document's authenticity. Unfortunately, they couldn't comply with inspection as they had mysteriously lost the Amended Payment Schedule within 3 weeks of producing a copy and within 2 weeks of being put on notice that it was a forgery.
July 2021: The Claimant served 4 contradictory Replies and Part 20 Defences varying between 55 - 100 pages all of which pleaded slightly different stories. At this point it was revealed what they were lodging at court was different from what was being served on the Defendant. However, Invoice 1172 was back to coming after Invoice 1159. The Amended Payment Schedule the Claimant relied upon was admitted to not being the original but that this did not matter for a reason which was never particularised. All defects with the works were the result of the homeowner's instructions and the Defendant's solicitor-advocate was actually a criminal with a criminal record.
July 2022: The 7th Story advanced at the Damages Assessment Hearing was that neither the loft floor nor the front loft roof formed part of the contract for a loft conversion as they were not mentioned in the Claimant's quote. However, an examination of that same quote found that they both were.
From July 2021, the Claimant failed to comply with a single direction which included cost-budgeting, disclosure, inspection and service of their own expert reports. Accordingly, the Claimant's claim was struck-out in April 2022 and a subsequent application for relief from sanctions rejected. The matter was then listed for a Damages Assessment Hearing and the Defendant's application for a Non-Party Costs Order was granted.
THE HARRASSEMENT OF THE HOMEOWNER / CONDUCT ISSUES
The most distasteful aspect of the litigation was the Claimant's (particularly Mr Archer's) continued harassment of his elderly victims which persisted until Devon & Cornwall police intervened.
For the first 3 months of the litigation and despite being legally represented, Mr Archer refused to cease direct contact with the homeowner and proceeded to repeatedly threaten him with criminal proceedings and further litigation if he did not simply pay up. The language of every communication consisted of little more than highly personalised abuse aimed at the homeowner's age, mental health and wider family.
Thereafter, the homeowner and his wife were subjected to late-night cold calling, threatened and then subjected to random drive-bys, had photographs taken of their home which served no evidential purpose before finally receiving open letters threatening to attend the Property under the disguise of a unilateral inspection. Despite the address for service being updated, the Claimant continued to send documents directly to their home and so there was no escape from the litigation.
To prevent further direct contact, we referred the matter to the courts and it was ordered that this behavior was to cease. However, now unable to gain access to his victims while they were legally represented, Mr Archer redirected the threats to the Defendant's solicitor-advocate demanding that we come off record. We received late night and weekend emails written in red making various threats of reputational damage unless we came of record for our client, which we resolutely refused.
Mr Archer then proceeded with a series of false allegations made to various police forces that we were threatening his family which were promptly rejected as we have only ever corresponded with the Claimant company at their given e-mail account recorded on the court forms. On numerous occasions we had to ask the Claimant to comply with basic data protection as in response to every piece of correspondence, the previously cocky Claimants would cry their families were now being threatened whom should not have been aware of the litigation at all.
When that didn't work, witnesses statements from Mr Archer were produced and sent to court falsely stating that we were threatening his family which were all rejected by the court. He then brought separate proceedings for a Non-Molestation Order which we defeated with costs being awarded in the family court.
Finally, in November 2021, having failed to remove us from the court record, the Claimant's attention returned again to the homeowners . After 3 requests to stay away from the homeowners, we referred Mr Archer to the police whom was issued him with strong words of advice to decease all direct contact as anything further would amount to criminal harassment. The homeowner and his wife were then referred to victim support and supplied with security cameras to keep them safe.
THE JUDGEMENT
The Damages Assessment Hearing took place 4th July 2022 before His Honor Judge Mitchell.
The homeowner relied upon his own evidence, the Chartered Surveyor's expert reports, the witness evidence of the contractors who had undertaken the urgent remedial works, the building inspectors written findings and all the original payment schedules and quotes. IDC had failed to serve any witness or expert evidence relating to liability or quantum but had the right to cross-examine the defendant's witnesses. Regretfully, this was made all the more difficult for them as the Claimants all attended court without their papers and instead tried to advance the case that neither the defects in the loft floor or the loft roof formed part of the contract.
"A Case of Incomprehensibly, Incompetent Workmanship."
Having considered both parties cases the court ordered damages to be assessed as follows:
The Remedial Works: This was not a hypothetical figure and had been the result of a competitive tender. Without these the Property would have collapsed and so the cost of the Remedial Works were allowed in full: £84'396.00
The Interim Repairs: These consisted or urgent works to repair the holes in the floors, damaged furniture, leaks and the fact that an elderly couple had been left in freezing conditions. The cost of the Interim Repairs were allowed in full: £1'820.84
Loss of Amenities: IDC's victims had been forced to live through 2 winters in freezing conditions with their only home in a state of constant disrepair and construction. It would be reasonable to allow general damages for this. However, this figure could not include the discomfort and pain suffered by Mrs Renwick whom was not party to the proceedings. General Damages for Loss of Amenities were assessed at £3'575.
Exemplary Damages: The claim for Exemplary Damages was rejected. The Defendant relied upon the conduct issues and argued that as not a single piece of 'work' undertaken by IDC could be retained the sum of £65'000 that had been paid should be recovered by way of Exemplary Damages. This would not be double-recovery as the cost of the Remedial Works was to prevent the collapse of the Property and not optional. However, his Honor rejected the submission finding it to be a case of "incomprehensibly, incompetent workmanship" which put it beyond the remit of Exemplary Damages.
Interest & Total: Interest was naturally allowed on the above figures that brought the total figure to £95'635.04.
Costs on Account: These were ordered at £60'000 and the matter listed for a Non-Party Cost Hearing which was successful in making the 3rd & 4th Parties joint and severally liable for the costs of the litigation that their company had commenced.
COMMENT
We are extremely proud of the results of this litigation which brought an end to the harassment of 2 pensioners, prevented further extortion and most importantly, the collapse of a Property which could have resulted in the death and/or serious injury of its occupants. The case also demonstrates the danger to civil practitioners when dealing with dangerous and dishonest individuals together with the importance of adhering to established good guidance.
While we did act for a family member in this matter, we would never have come off record for any client left in this diabolical situation and our commitment to you is that we never will.
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