Background

This case considered an application for summary judgment and/or strike out of the whole or part of a claim by NHBC and looked into whether the property owner could recover the cost of remedial works.

The claimant's bungalow was constructed by a contractor with the benefit of NHBC Buildmark cover. When defects became apparent, the claimant gained a partial award via arbitration against the contractor which he failed to pay.

The claimant later began a second arbitration against the contractor which deemed to be rather problematic as the latter was in the process of liquidation. It became apparent that the NHBC policy would be the claimant's main source of compensation and as such the claimant and NHBC entered into a settlement agreement whereby the second arbitration was discontinued and NHBC agreed to consider any claims that had not been addressed in the first arbitration to the extent that they fell within the scope of the NHBC policy.

However, NHBC subsequently rejected all the claims arguing that these had been addressed in the first arbitration. The claimant began court proceedings for all of the sums she had claimed, whilst NHBC applied to strike out the claim.

Court Judgment

The court granted the application in part and considered:

  • Applicable tests - Although a claimant had to have a case that was more than merely arguable, the bar on either summary judgment (i.e. early judgment) or strike out (of a claim) was not to be set too high and there should be no need for a mini-trial of the issues.
  • Recoverable loss - Refused to accept NHBC's argument that the claimant had suffered no recoverable loss because he had sold the property without making any repairs. This question was unsuitable for resolution on a summary basis and the Court could not conclude at this stage that the claimant had no real prospect of succeeding.
  • Abuse of process - Considered that, even if she was incorrect about the settlement agreement, the claimant's claims for items that had been subject to a previous arbitration against a different party could amount to an abuse of process. The public interest in not having the same issues repeatedly litigated was as valid as that in not vexing the same party twice.

Conclusion:

This case highlights the detailed investigation required to decide on applications for striking out claims and for summary judgment commenting that such applications are not always a "quick fix".

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