Persimmon Homes (South Coast Ltd) v Hall Aggregates South Coast Ltd & Anr

[2012] EWHC 2429 (TCC)

In the case of Claymore v Nautilus (see Issue 84), the court had said that where a claimant has unreasonably delayed commencing proceedings, it may exercise its discretion either to disallow interest for a period or to reduce the rate of interest. However it stressed that in exercising that discretion the court must take a realistic view of delay. Here, the Claimant (known as RMC) argued that Persimmon was guilty of delay in making or pursuing its claim. Specifically, RMC said that there was a delay of 3½ to 4 years between the time when Persimmon paid for remedial works to be carried out and the first intimation of any complaint or claim against RMC. There had been no explanation for that delay and it should not be required to pay interest for this period. There was a further delay of two years between the date when directions for the assessment of damages were resisted by Persimmon and when those directions were given by the TCC. During this period, it was incumbent on Persimmon to pursue its claim but RMC, rather than Persimmon, had sought the assessment of damages.

Persimmon said that the basic principle is that interest will be awarded from the date of loss. The TCC had also pointed out that RMC was aware that it should have carried out the remedial work but did not point this out when Persimmon were doing the work themselves. In relation to the second period of delay, Persimmon said that there was an appeal to the CA. It was entirely reasonable not to hold a separate quantum hearing pending an appeal.

Mr Justice Ramsey did not consider that there should be any disallowance of interest on the basis of unreasonable delay. This was a case where RMC was obliged to carry out the remedial work and pay for it but, instead, Persimmon had carried it out. RMC had benefited from having the use of money which it should, at the time, have spent on carrying out the work. There was an unexplained period, but it was evident that Persimmon had other priorities and they could not be criticised for delay in bringing the claim. Further, a party that awaits the decision of the CA cannot be criticised. Finally, the Judge noted that following CA judgment, there had been settlement discussions between the parties. There could be no criticism for waiting to see if these were successful.