Anonymized Summary of the Opinion

Factual and Procedural Background

This appeal arises from an order dated 30 May 2025 in which a judge struck out the Plaintiffs' Schedule of Loss. The Plaintiffs (two individual leaseholders among 41 leaseholders at the development) seek to appeal that strike-out. Before the trial judge the Plaintiffs were self-represented; before this court they were represented by Attorney Butler and Attorney Rowan. The Defendant is the party in whom the developer's rights and liabilities have vested and remains represented by Attorney Singer and Attorney Ward. Company A is the management company for the development and is the 42nd claimant in the consolidated proceedings.

The underlying dispute concerns the discovery of fire-safety and other defects at a residential development (the Building) constructed between 2004 and 2007 in The City. The consolidated claims include breach of contract (alleged implied terms in leases) and/or breach of the duty under Section 1 of the Defective Premises Act 1972 (the DPA).

The defendant and Company A have agreed a works licence and a contract has been concluded that permits the defendant to carry out a comprehensive programme of remedial works. As a result, there is no claim in the proceedings for the cost of those remedial works. The Re-Re-Re-Amended Particulars of Claim (RRRAPOC) were prepared by Attorney Sawtell on behalf of the claimants and set out, at paragraph 25, the heads of loss which the claimants generally advanced; the schedule of loss for each claimant was expected to conform to that framework.

The Plaintiffs served their own Schedule of Loss, drafted personally by them (one of them being a solicitor). The judge found that their Schedule of Loss deviated significantly from the framework in paragraph 25 of the RRRAPOC, was over-complicated and unclear, and that seven of nine heads of loss in their Schedule (save for the service-charge and interest items) should be struck out. The Plaintiffs appealed that strike-out; this opinion explains why the appeal was dismissed.

Legal Issues Presented

1. Whether the judge was right to strike out seven heads of loss in the Plaintiffs' Schedule of Loss as being speculative, insufficiently pleaded, outside the pleaded case in the RRRAPOC, or otherwise unarguable under the principles governing strike-out (CPR r.3.4 and Practice Direction 3A).
2. Whether, as a matter of case management and procedural fairness, the judge ought to have granted the Plaintiffs an opportunity to amend the Schedule of Loss (or the RRRAPOC) before striking out the contested heads of loss, applying the approach in Kim v Park and related authorities.
3. Whether certain specific heads of loss (notably claims described as diminution in value across historic dates, investment loss, re-investment loss, rental income loss, secured borrowing loss, indemnity, and taxation/IHT consequences) are recoverable in principle in the circumstances of this case and, if so, whether they were properly pleaded.

Arguments of the Parties

Appellant's Arguments (Plaintiffs / Attorney Butler)

• The Plaintiffs contended that some of the struck out heads of loss (in particular the largest item described as Total Capital Losses) could be recoverable even if the Flats were retained rather than sold, relying on principle that diminution in value can accrue whether or not the asset was sold (examples were discussed in argument).
• Attorney Butler submitted that certain heads (notably rental income loss) were pleaded in the RRRAPOC and therefore the Schedule of Loss should not have been struck out without an opportunity to amend and particularise; he relied on the proposition that defects in pleading should normally be cured by allowing amendment where there is reason to believe the party can put the pleading right (citing Kim v Park).
• In oral argument the Plaintiffs advanced, as an alternative or refined case, that they had gifted the Flats to their daughters in November 2024 and that loss may have crystallised in connection with that event (a point relied upon to re-characterise the Total Capital Losses claim).
• There was also a general submission that some heads could be viewed as facets of a diminution in value claim and, if so, should not have been struck out at this stage without trial.

Respondent's Arguments (Defendant)

• The Defendant argued that the contested heads were either clearly unrecoverable, purely speculative or imaginary, outside the pleaded framework in the RRRAPOC, or advanced so vaguely and unclearly that they could not support an amendment.
• In the case of the largest head of claim (Total Capital Losses), the Defendant characterised it as spurious because it calculated alleged diminutions at specific past dates when the Plaintiffs retained the Flats thereafter and did not suffer crystallised losses on those dates.
• The Defendant emphasised case-management considerations and prejudice, asserting that unpleaded, vague and speculative claims should be struck out rather than allowed to burden the timetable for trial.

Table of Precedents Cited

Court's Reasoning and Analysis

The court approached the appeal by applying principles applicable to strike-out applications (CPR r.3.4 and Practice Direction 3A) and summary disposal where appropriate. The judge's summary of summary-judgment principles was accepted as a useful distillation: a claim or issue should be struck out only where it has no real prospect of success (not merely arguable), and the court must critically examine the pleaded facts and available material without conducting a mini-trial. Where defects in pleading might be curable by amendment, the court has discretion to permit amendment, but that discretion presupposes that a proposed amendment is available or there is reason to believe the party can put the defect right (Kim v Park).

Applying those principles, the court analysed each of the seven disputed heads of loss set out in the Plaintiffs' Schedule of Loss. The recurring themes in the court's reasoning were:

• The Schedule of Loss departed materially from the framework set out in the RRRAPOC (paragraph 25). Many of the contested heads were not pleaded in the parent pleading and therefore were unpleaded claims raised for the first time in the Schedule of Loss.
• The Schedule of Loss was, in the court's view, over-complicated and lacked necessary particulars: figures were stated without breakdown or explanation; many heads were unquantified; and key factual triggers for loss (e.g. attempts to borrow, dates when losses crystallised) were absent.
• In the absence of any proposed amendments being served either before the trial judge or this court, the court could not conclude there was reason to believe the Plaintiffs could remedy the defects; Kim v Park therefore did not require the judge to allow amendment.
• Case management considerations were central: the trial timetable was imminent, and allowing unpleaded or speculative heads to remain would cause prejudice and unnecessary delay. The judge's choice to strike out obviously deficient heads rather than keep them alive on the hope of future amendment was a permissible exercise of case management discretion.
• The court applied established legal principles on the measure of damages for defective works: diminution in value is a recognised head of loss and is often measured by the reasonable cost of reinstatement, but where remedial works are to be carried out by the defendant under an agreed contract, owners will not ordinarily be able to recover the cost of those remedial works as damages. Residual diminution (blight) is a proper head of loss, but that was not what the Plaintiffs' largest claim (Total Capital Losses) was pleaded to be.

Specific analysis of each disputed head:

• Total Capital Losses: The Schedule defined a composite of alleged losses at three historic dates (2016, 2019, 2024) but provided no breakdown or evidence; the judge judged this claim to be "spurious" because the Plaintiffs retained the Flats on those dates and there was no crystallised loss then. The Plaintiffs' alternative oral case (that they gifted the Flats in November 2024 and suffered loss then) was not pleaded and would, if pursued, amount to a fundamentally different and novel claim requiring deletion of the existing pleading and detailed consideration. No proposed amendment was shown, and the court saw no authority for a developer being liable both to carry out remedial works free of charge and also to compensate the previous owner for conventional diminution in value on the basis that the remedial works had not and would not be carried out. The judge was therefore right to strike out the head.
• Investment Loss and Re-Investment Loss: These heads sought to recover hypothetical returns had the Plaintiffs invested elsewhere or in a different market (e.g. Greater London). The judge held such claims were wrong in principle: a claimant is entitled to damages reflecting the consequences of defects (typically diminution in value and possibly loss of use), but not to hypothetical returns from a "road not taken." They were also duplicative or speculative and, as pleaded, outside the RRRAPOC.
• Rental Income Loss: This head was pleaded in the RRRAPOC framework but the Schedule of Loss failed to quantify or particularise it. The judge accepted that loss of actual rental income is a recoverable head in principle but required factual particularisation (actual lower rent received or inability to let). The judge exercised case management discretion to strike out the deficient pleading rather than defer to amendment, a decision this court upheld as within permissible case-management options.
• Secured Borrowing Loss: This head purported to claim loss from inability to raise secured borrowing on the Flats. The judge gave multiple reasons for striking it out: it was not pleaded, lacked supporting averments in the RRRAPOC or Schedule of Loss (no attempt to raise finance was pleaded), was inconsistent with other averments, opportunistic and obviously too remote. The court upheld these reasons.
• Indemnity: This head was abandoned at the appeal hearing in light of a recent Divisional Court decision concerning the Renting Homes (Wales) Act 2016 and so required no further consideration on appeal.
• Taxation / IHT: The Schedule included a brief, unparticularised assertion that earlier sale/gifting could have reduced inheritance-tax risk and that insurance costs might be recoverable, but no quantification, and the pleading did not clearly state the causal facts relied on. The judge found the head unpleaded, too remote, and incoherent; the court agreed that as pleaded it was unarguable.

Holding and Implications

Holding: The court dismissed the appeal and agreed with the trial judge's decision to strike out the seven contested heads of loss in the Plaintiffs' Schedule of Loss.

DISPOSITION: Appeal dismissed.

Implications:

• The strike-out eliminates seven heads of loss (Total Capital Losses; Investment Loss; Re-Investment Loss; Rental Income Loss (as pleaded in the deficient Schedule); Secured Borrowing Loss; Indemnity (abandoned after a subsequent authority); and Taxation/IHT) as advanced in the Plaintiffs' Schedule of Loss in their current form.
• Two items in the Plaintiffs' Schedule (service charge loss and interest loss) were not the subject of the strike-out application and are accepted in principle by the Defendant.
• The court emphasised that the Plaintiffs were not prevented from advancing properly pleaded residual diminution (blight) claims or properly particularised rental claims where those claims are within the pleaded framework and supported by proposed amendments and evidence; however, no proposed amendments were before the court and the trial timetable was imminent, so the judge's case-management decision to strike out the deficient heads was upheld.
• No novel legal principle or binding change to existing law was created by this decision; the court applied established principles on strike-out, case management and measures of damage for defective works, and confirmed that routine permission to amend is not required where no credible or particularised amendment is advanced.

Note on anonymization: All personal names and specific corporate names in the original opinion have been replaced with neutral placeholders (e.g., "Plaintiff", "Defendant", "Company A", "Attorney [Last Name]", "Judge [Last Name]") to comply with the instruction to remove personally identifiable information. The summary otherwise relies exclusively on the content of the provided opinion and does not add or infer facts beyond that text.