Reports From The Courts - November 2020

• Published date: 11 November 2020
• Subject Matter: Real Estate and Construction, Construction & Planning, Landlord & Tenant - Leases
• Law Firm: Beale & Co
• Author: Andrew Croft and Ben Spannuth

Our regular review of the court designs of most relevance to construction comes from Andrew Croft and Ben Spannuth, focusing on a case which serves as a reminder of the courts' approach to strike-out and summary judgment applications; and another that highlights the courts' robust support of the 'pay now, argue later' principle of the Construction Act.

Sportcity 4 Management Limited and Others v Countryside Properties (UK) Limited

[2020] EWHC 1591 (TCC); HHJ Eyre QC

Sportcity 4 Management Limited (Sportcity) are the management companies of the blocks forming the Sportcity Living complex development in Manchester (the Development). Countryside Properties (UK) Limited (Countryside), a property developer, built the Development, which was completed in 2010 at the latest.

AMEC Developments Ltd (AMEC), the leaseholder of the land, subdemised the individual apartments by a series of underleases (the Leases) to which Sportcity and Countryside were parties in addition to the proposed sub-lessees of the apartment in question. Clause 6 of the Leases began with the words 'Covenants by the Landlord with the Management Company and the Tenant'. AMEC subsequently also assigned its headlease to Sportcity.

In late-2013, Sportcity asserted that there were cladding problems at the Development. Whilst Countryside did not accept that there were problems, it was accepted that Countryside attended the Development in 2014 to undertake some works and also in 2017 (although the purpose of that attendance was disputed).

Sportcity issued proceedings in May 2019 asserting three separate causes of action in respect of 'life-threatening defects in the design and/or construction of the cavity barriers and fire-stopping measures in the properties', namely: (i) a claim under the Leases on the basis that Countryside was the landlord and as such owed certain obligations to Sportcity or was otherwise responsible for ensuring compliance with such obligations; (ii) a claim under the Defective Premises Act 1972 (the Act) in respect of allegedly defective works undertaken in 2014 and 2017; and (iii) a claim that there was a breach of a duty of care in tort owed to Sportcity. Sportcity sought damages of c.'16m in total for recladding works and cavity barrier and firestopping works.

Countryside denied any breach of the Act and asserted that any claim became statute-barred before the commencement of proceedings. Countryside further denied that it was the landlord for the purpose of the Leases or...