Persimmon Homes (South Coast) Ltd v Hall Aggregates (South Coast) Ltd. & Anor [2012] EWHC 2429 (TCC)

[2012] EWHC 2429 (TCC)Case No HT-07-260
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT
Venue Royal Courts of Justice, Strand, London, WC2A 2LLDate 28 August 2012
Before
THE HON MR JUSTICE RAMSEY
Between
PERSIMMON HOMES (SOUTH COAST) LIMITEDClaimantHALL AGGREGATES (SOUTH COAST) LIMITEDDefendantCEMEX UK PROPERTIES LIMITEDDefendant
Richard Wilmot-Smith QC and John Denis-Smith (instructed by Boodle Hatfield) for ClaimantThomas Keith (instructed by Eversheds LLP) for Defendants
Judgment No 3Mr Justice Ramsey:

Introduction

[1]In this judgment I deal with the claims made by the Claimant (“Persimmon”) for interest on sums that have been awarded against the Defendant (“RMC”) pursuant to two judgments.[2]In the first judgment dated 10 October 2008 (“the First Judgment”) Coulson J awarded Persimmon £46,920.10 in respect to works to Sandhills Lane. That sum was ordered to be paid by 24 October 2008. Interest was ordered to be paid at a rate to be agreed by the parties or to be assessed by the Court. Payment was only made by RMC on 8 April 2010.[3]RMC accepts that interest is payable under s.17 of the Judgments Act 1838 at 8% on the sum awarded from 24 October 2008 to 8 April 2010. It also accepts that interest is payable up to October 2008 but it contends that it should be at a rate of 1% over base rate and that an abatement should be allowed for the delay between the date on which the works were paid for, in January to October 2003, and the first intimation of a claim against RMC in a letter from Persimmons’ Solicitors to RMC’s Solicitors dated 3 April 2007, a period of some 3½ to 4 years.[4]Persimmon claims interest at 2% over base from the date when the sums were paid until October 2008 and does not accept that there should be any period of abatement.[5]In the second judgment dated 11 January 2012 (“the Second Judgment”) I awarded Persimmon damages in the sum of £1,146,257.70 for works which RMC failed to carry out.[6]RMC contends that Persimmon’s entitlement to interest on such sums should, again, be limited to 1% over base rate and that there should be abatement for periods of unreasonable delay. The first period being the period referred to above of 3½ to 4 years between 2003 and 2007 and the second period of delay being from 10 October 2008 until 14 October 2010 during which Persimmon failed to seek directions for the trial of quantum following the hearing on liability.[7]Persimmon claims that in the period up to 10 October 2008, the date of the First Judgment, it should be entitled to interest at 2% above base and that there should be no abatement for the period 2003 to 2007. In addition Persimmon submits that in the period from 10 October 2008 to payment it should be entitled to interest at 8%. It relies on section 17 of the Judgments Act 1838 and contends that the Court should Order interest to begin from 10 October 2008 rather than 11 January 2012 under the discretion given to the Court under CPR 40.8(2). Persimmon says that, as originally directed, liability and quantum were both to be dealt with in October 2008 but that Coulson J deferred the assessment of damages for reasons for which RMC was responsible. Persimmon therefore contends that it should be entitled to interest from the date when it obtained judgment for damages to be assessed rather than the date on which the damages were actually assessed. Alternatively, Persimmon submits that, on the basis of those circumstances, the equivalent interest should be awarded under section 35A of the Senior Courts Act 1981.[8]Persimmon also says there should be no period of abatement for the period 2003 to 2007 or from October 2008 to 2010. In relation to the earlier period, whilst it accepts that there was delay in bringing the claim, it submits that this should not lead to abetment of interest in the particular circumstances of the case. In relation to the period between 2008 and 2010 Persimmon say that, after the First Judgment, given that there was to be an appeal it acted reasonably in agreeing with RMC that it should not proceed with the assessment of damages pending the resolution of that appeal. Following the judgment of the Court of Appeal on 22 October 2009 Persimmon says that it appropriately sought to resolve matters by without prejudice negotiations between January 2010 and July 2010, prior to seeking directions in October 2010 leading to the hearing and Second Judgment.[9]On that basis there are essentially three issues which have to be determined in this case:(1) Whether for the period prior to 10 October 2008 the appropriate rate of interest is 2% over base, as Persimmon contend or 1% over base as RMC contends.(2) Whether, in relation to the damages assessed in the Second Judgment, Persimmon is entitled to interest at 8%, as Persimmon contends or 1% over base rate, as RMC contends.(3) Whether any interest should be abated for the delay in commencing proceedings between 2003 and 2007 and the delay in Persimmon seeking the assessment of damages between 2008 and 2010. The principles upon which interest is awarded[10]The first issue concerns the rate of interest to be awarded under section 35A of the Senior Courts Act 1981, absent Persimmon’s contention that judgment rate interest at 8% is the appropriate rate. The starting point in this respect is the well known passage in the judgment of Forbes J in Tate and Lyle Food and Distribution Limited v Greater London Council [1982] 1 WLR 149 at 154 to 155 where, in summary, he held that the appropriate rate had to reflect the rate at which a claimant would have to borrow money to provide the money which was withheld. He held that the rate was not one which took into account the special position of a claimant but rather it was the rate at which claimants like the particular claimant could, in general, borrow money, taking into account the general attributes of the class of claimants to which the claimant belonged.[11]In coming to the conclusion that in that case the attributes of the claimant meant that the appropriate rate was 1% over the base rate (at that time the rate being the minimum lending rate) Forbes J said as follows:
“There is evidence here that large public companies of the size and prestige of these plaintiffs could expect to borrow at 1 per cent over the minimum lending rate, while for smaller and less prestigious concerns the rate might be as high as 3 per cent. over the minimum lending rate. I think it would always be right to look at the rate at which plaintiffs with the general attributes of the actual plaintiff in the case (though not, of course with any special or peculiar attribute) could borrow money as a guide to the appropriate interest rate.”
[12]In Claymore and Nautilus Properties Limited [2007] BLR 452 Jackson J (as he then was) reviewed the relevant authorities on the rate of interest at [70] to [74]. In those decisions the court had generally awarded 1% over base rate. However Jackson J held that the claimant in the case he was dealing with would have had to pay more than 1% over base rate in order to borrow the relevant sums at the relevant time. He concluded that the appropriate rate was 2% over base rate. In Fitzroy Robinson Limited v Mentmore Towers Limited (No. 3) [2009] EWHC 2265 (TCC) Coulson J referred to the decision of Jackson J in Claymore and at [59] said that:
“It is common, but not inevitable, that interest under the 1981 Act to be a rate of 2% over base.”
[13]In Lindsay v O’Loughnane [2010] EWHC 529 (QB) Flaux J dealt with a claim by a professional investment advisor for damages arising from fraudulent misrepresentation. After accepting the submission that 1% over base was only a presumption which could be displaced in an appropriate case, he said this at [143]:
“Although there is no specific evidence as to the rate of interest which the claimant would have had to pay to borrow the money (and indeed was no such evidence in Claymore) I accept the general proposition that the rate at which individuals can borrow money has been rather higher than base plus 1% in the last few years. In the absence of specific evidence I am not prepared to go as high as 4% over base which was Mr Maclean's upper limit, being the rate imposed by FX on its customers for late payment under clause 5.8 of the Terms and Conditions. However, I will award interest at 2% over base rate.”
[14]That reflects the guidance given in the Admiralty and Commercial Courts Guide in relation to interest where it says:
“J14.1 Historically the Commercial Court has generally awarded interest at base rate plus one percent unless that was shown to be unfair to one party or the other to be otherwise inappropriate. In the light of recent interest rate developments there is no presumption that base rate plus one percent is the appropriate measure of a commercial rate of interest.”
[15]The references above to the rate at which individuals can borrow money being higher than base plus 1% in the last few years and to there not being a presumption that such a rate is the appropriate measure of commercial interest are clearly references to the fact that between July 2007 and March 2009 the Bank of England Base Rate dropped from 5.75% to 0.5% where it has now remained for over 3 years.[16]In the present case, as was the position in both Claymore and Lindsay, there is no specific evidence as to the rate of interest which companies in the position of Persimmon would now have to pay to borrow money. However, as recent decisions and the reference to the Admiralty and Commercial Courts Guide show, there is no longer a presumption that 1% over base rate still reflects a commercial rate of interest when the base rate has dropped to low levels. However, that is only the position in more recent past and I consider that the presumption remains good historically.[17]In the circumstances of this case I consider that I should apply the presumption of 1% over base up until 5 February 2009 when the base rate dropped from 1.5% to 1.0%. I consider that from that date the rate of interest should remain at 2.5% which would currently amount to a rate of 2% over base. It follows that, subject to the other issues which I have to decide, where the commercial rate of interest is to be applied under section 35A of the Senior Courts Act 1981, those are the rates which I should use. The use of the rate under the Judgments Act 1838[18]Section 17 of the Judgments Act 1838, as amended, provides as follows:
“(1) Every judgment debt shall carry interest at the rate of 8pounds per centum per annum from such time as shall be prescribed by rules of courtuntil the same shall be satisfied, and such interest may be levied under a writ of execution on such judgment. (2) Rules of court may provide for the court to disallow all or part of any interest otherwise payable under subsection (1).”
[19]The 1838 Act was amended with effect from 26 April 1999 when CPR 40.8 was introduced. That is the relevant rule of court dealing with Judgments Act interest and it provides as follows:
“(1) Where interest is payable on a judgment pursuant to section 17 of the Judgments Act 1838..., the interest shall begin to run from the date that judgment is given unless – (a) a rule in another Part or a practice direction makes different provision; or (b). the court orders otherwise. (2) The court may order that interest shall begin to run from a date before the date that judgment is given.”
[20]Prior to the introduction of the CPR there were three reported case in which Judgments Act interest had been awarded. The first was Pinnock v Wilkins and Sons (The Times, 29 January 1990) where a claimant recovered damages against solicitors for negligence in mishandling personal injuries litigation and the trial judge awarded interest at the Judgments Act rate on the basis that, but for the solicitors’ negligence, the claimant would have obtained a judgment carrying interest at the rate from an earlier date.[21]On appeal, Fox and Nicholls LJJ decided, Ralph Gibson LJ dissenting, that the appropriate rate was the rate over the relevant period from time to time on judgment debts, being 12% for two years and 15% for the remaining period of nearly four years. At the relevant time the special account (formerly the short term investment account) rate had varied from 9.5% up to 14.25% over the relevant period.[22]The second case was the decision of the Court of Appeal in Watts v Morrow [1991] 1 WLR 1421. That was a case in which there was a claim in negligence for a building surveyor’s report which failed properly to identify the scope and extent of defects. The judge awarded interest at the Judgments Act rate of 15%. The Court of Appeal rejected an argument that the rate should have been the short term investment account rate and referred to the judgment of Nicholls LJ in Pinnock v Wilkins as supporting the basis on which the judge exercised his discretion and therefore the Court of Appeal decided that they should not disturb the rate chosen by the judge in the exercise of his discretion. However at page 1446 Bingham, LJ said this:
“Since the award of interest on damages is intended to compensate aplaintiff for being kept out of money lawfully due to him, there is muchto be said for applying a rate of interest which reflects the cost or valueof money over the relevant period rather than a flat rate under theJudgments Act 1838 which has remained fixed over a number of yearsdespite fluctuations in interest rates during that time.”
[23]In the third case, 2 ESS Steam and Shower Company Limited v PC Henderson (unreported, 18 January 1993), the Court of Appeal considered the rate of interest in a case where a manufacturer of shower and steam cabinets sought damages from a party who made components for those cabinets. The judge applied the Judgments Act rate and the Court of Appeal held that the judge was entitled in the exercise of his discretion to use that rate. Dillon LJ referred to the judgment of Nicholls LJ in Pinnock v Wilkins and said as follows:
“Lord Justice Nicholls makes it clear at 41A in the transcript that there is nothing abnormal or special about the use of that rate of interest, namely, the rate which over the relevant time was payable from time to time on judgment debts in respect of periods prior to judgment. Therefore, the use of that rate did not require special factors to justify it. Apart from that, in so far as in the present case Mr Farrer submits that the judgment rate of interest is a penal rate, it appears from the judgment of Lord Justice Nicholls that, so far from it having been a penal rate, the reason why the judgment rate had traditionally not been used as the rate of interest applicable before judgment was that the judgment rate was fixed from 1838 to 1971 at a mere four percent, which was a ridiculously low and unrealistic rate for the financial conditions applicable from, say, 1950 onwards.”
[24]Whilst those cases indicate that, in exercising the discretion under section 35A of the Senior Courts Act 1981, the court may, in its discretion, choose the Judgments Act rate of interest, interest under section 35A is intended to compensate a claimant for being kept out of money lawfully due to that claimant. During the relevant period from 1983 to 1991 which was the period considered by those cases, the rate of interest under the Judgments Act was higher than the short term investment rate but generally the difference was small by comparison to the overall rate. Further the Judgments Act rate has remained fixed despite fluctuations in interest rates.[25]Therefore the use of the Judgments Act rate in those cases does not support the use of that rate in the current climate of lower interest rates and this is reflected in two more recent cases. First, in Reed Executive plc v Reed Business Information Ltd [2004] EWCA Civ 887, Jacobs LJ, with whom Auld and Rix LJJ agreed, said:
“I think the appropriate rate is the commercial rate. The judgment rate is purely artificial. I can see no reason for an artificial rate being imposed by the court save in those cases where it must, i.e. where there has been judgment for a sum. Besides, a judgment debtor can avoid paying any interest by paying the debt so it is in a sense, a voluntary rate of interest.”
[26]Secondly in Claymore at [68] when rejecting the use of the Judgments Act rate, Jackson J said:
“The Judgments Act rate does not reflect the loss to the claimant from being kept out of its money. The rate stipulated in section 17 of the Judgements Act can only be changed by Parliament, through the mechanism of a Statutory Instrument. That is not a speedy process. Indeed, the Judgments Act rate has only been changed once in the last 20 years. During that period there have been substantial changes in the rate of inflation and in the cost of borrowing. The Judgments Act rate is fixed for the benefit of unpaid judgment creditors. It is not normally an appropriate rate of interest to award in the context of a dispute between two businesses.”
[27]Persimmon also refers to the Northern Ireland decision in Peoples (Richard) v Jason Kyle (trading a Kyle Construction) [2010] NIQB 36 where McCloskey J considered the appropriate rate of interest to be awarded to a house owner against a builder for failing to construct a house extension adequately. The judge reviewed the rate of interest applicable to personal injury claims, saying that a “6% rate might be more difficult to justify today than previously, given the significant fall in the value of money during recent years.” He referred to the fact that in Northern Ireland the rate of interest on judgments was 8% and had remained unchanged since 1993. The Judge, in the exercise of his discretion, said that it would be fair and reasonable to award interest at 6%.[28]RMC relies on two Court of Appeal decisions which it submits provide a better indication of the approach of the court to the award of interest. In the first decision in Jackson v Royal Bank of Scotland [2000] CLC 1457 the Court of Appeal considered a dispute between a business and a bank concerning the disclosure of confidential information to a customer causing it to cease trading with the claimant business. In determining what rate of interest should be applied the judge had considered the evidence of what the claimant had actually paid, being 6% above base. The Court of Appeal rejected that approach stating that there was no general evidence before the judge as to borrowing rates available to small businessmen over the period so as to justify and exceptional uplift of 6%. Instead, taking account of a concession made before the judge, the Court of Appeal awarded interest at a rate of 3% over base rate In the subsequent decision on appeal to the House of Lords [2005] 1WLR 377 at [44], it was left to the parties to agree the rate of interest to be applied in the light of the findings of the Court of Appeal.[29]The second case was the decision of the Court of Appeal in Jaura v Ahmed [2002] EWCA Civ 210 in which Rix LJ dealt with the question of interest. He rejected a contention that the interest charged to Mr Jaura on a particular loan was typical of interest payable by small businessmen in his position but awarded interest of 3% over base.[30]Persimmon also relies on CPR 40.8 which allows the court to award interest under the Judgments Act to begin to run from a date before the date on which judgment is given. It submits that it is appropriate to do so in this case from 10 October 2008, the date of the First Judgment, when judgment was given for damages to be assessed.[31]In Thomas v Bunn [1991] 1 AC 362 the House of Lords held that where there was a judgment for damages to be assessed in a personal injury action then interest under the Judgments Act ran from the date of the judgment assessing or recording the damages payable and could not be varied by the courts. Since that decision section 17 of the Judgments Act has been amended and CPR 40.8 has been introduced so that the court may award interest Judgments Act interest from an earlier date.[32]The provision in CPR 40.8 was considered in Fattal v Walbrook Trustees (Jersey) Limited [2008] EWHC 1674 (Ch) where there was an appeal from the decision of a costs judge who had decided that the court should not exercise its discretion to order interest to run on a costs award from a date before judgement, except in exceptional circumstances. In rejecting that conclusion Christopher Clarke J. said this:
“[25] The combined effect of the Act and the Rules is that save where a rule or Practice Direction otherwise provides, interest will run from the date the judgment is given unless the court orders otherwise. There is nothing in the statute as amended or in the Rules, which indicates that a different order is only to be made in exceptional circumstances. No doubt there must be a good reason to make such an order, but the court must not, in my judgment, need to be able to label the circumstances as exceptional. The Rules expressly indicate that the court may order interest to begin from the date before judgment and the circumstances in which it is likely to do so include cases where substantial sums have been paid in costs before the judgment is given – a not exceptional occurrence. [26] The most important criterion is that any order should reflect what justice requires. The primary purpose of an award of interest on a debt, damages or costs is to compensate the recipient for the fact that he has been precluded from obtaining a return on the money which he has had to expend on costs and has thus been out of pocket - London Chatham & Dover Railway Co v South Eastern Railways Co [1893] AC 429 at 437; Earl of Malmsbury v Strutt & Parker [2008] EWHC 616 (QB) paras 5 and 6. [27] The ability of the High Court to depart from the incipitur rule was conferred in order that the court could take account of the fact that money would often beexpended before any judgment. Conversely, where money has not been expended, for example where the bulk of the costs have been paid at a date long after the relevant judgment, justice requires that the date for the commencement of the interest is postponed beyond the date of that judgment.”
[33]In Morton v Portal [2010] EWHC 1804 (QB) Walker J dealt with a personal injury case in which liability had been determined in November 2007 and damages were to be assessed in November 2009 but the parties reached substantial agreement leaving over certain matters which were determined in 2010. Walker J ordered interest to run from an earlier date in 2010 by taking a broad brush approach on the basis that this would achieve fairness to both sides.[34]The Court of Appeal considered the provisions of CPR 40.8 in Simcoe v Jacuzzi UK Group Plc [2012] EWCA Civ 137. In that case the Court of Appeal dealt with an appeal from a District Judge who had held that interest on an award of costs should only run from the date of assessment of those costs. Whilst the decision of the Court of Appeal depended on the rules that applied in the County Court, they considered CPR 40.8(1)(b) and whether the court should order interest to run from a date other than the date judgment was given. In that case there was a conditional fee agreement and the defendant contended that the conclusion of Lord Ackner in Hunt v RM Douglas (Roofing) Limited [1990] 1 AC 398 at 415 to 416 that the balance of justice favoured the incipitur rule, so that interest should run from the date of the costs order, should not apply in the case of a CFA.[35]Lord Neuberger MR, giving a judgment with which the other members of the Court of Appeal agreed, said he agreed with the observation of Christopher Clarke J in Fattal but added two precautionary comments. He said he would discourage too detailed an approach into the facts of the particular case for the purpose of determining the date from which interest should run. He said the court should take a broad view of the position avoiding prolonged argument or detailed evidence on the issue. Secondly he expressed the view that it would not be inappropriate to award interest on costs where the case was being funded by a third party.[36]It is submitted on behalf of Persimmon that the court should award interest under the Judgments Act in this case because originally the trial in July 2008 was intended to address both liability and quantum but on the first day of that trial the court decided to proceed only on liability, with quantum to be dealt with at a later date. Persimmon submits that the decision was only made because RMC served a further statement from Mr Barrett dated 1 July 2008, shortly before the hearing was due to commence on 14 July 2008. Persimmon submits that in those circumstances it would be just for interest to be awarded from the date of the First Judgment in October 2008 rather than the Second Judgment in January 2012. It submits that, had the trial taken place in 2008, then judgment interest would have been payable on sums awarded at that time. Persimmon submits that there is no unfairness to RMC because it was not ready for the trial in 2008 and was responsible for delaying judgment on quantum both by not being in a position to deal with it at that trial and also by pursuing the appeal.[37]RMC submits that Persimmon were wrong in contending that RMC caused the determination of quantum to be delayed, either by the split trial ordered in July 2008 or by pursuing an appeal. RMC submits that Coulson J had ordered the adjournment of quantum on the basis that neither party was to blame. Further it says that in July 2008 Persimmon had only claimed damages on the basis of what the remedial and haulage works had cost Persimmon and not on the basis of what the works would have cost RMC, which was the basis which Coulson J found to be appropriate in the First Judgment.[38]In relation to the appeal RMC refers to the draft orders put before Coulson J in October 2008 and submits that it was RMC who had proposed that directions for the trial of quantum should be given and that it was Persimmon who resisted that order and, instead, proposed a further CMC. RMC says that this led to paragraph 8 of the order of 10 October 2008 by which the parties were to seek to agree the position and provide the court, no later than 14 November 2008, with directions necessary to resolve the quantification of damages. RMC says that no steps had been taken by Persimmon to propose or agree any directions. In addition, it says that even after the appeals by both parties had been dismissed by the Court of Appeal in October 2009 it was RMC who pressed for directions to be agreed or ordered rather than Persimmon.[39]I do not consider that the Judgments Act rate of interest of 8% is an appropriate rate to apply in the present case as a matter of discretion either under section 35A of the Senior Courts Act 1981 or under CPR 40.8. First, the cases in which the court has applied the Judgments Act rate, as a matter of discretion, related to periods when there was not so much difference between the Judgments Act rate and other appropriate interest rates as there is currently. Secondly, the Judgements Act rate changes infrequently and therefore does not reflect the change in the base rate to which most rates of interest are tied. Thirdly, the Judgments Act rate of interest is one which is generally applied where a party has failed to pay a sum in accordance with a judgment. It therefore applies to a period when a party fails to pay a sum under an enforceable money judgment.[40]Fourthly, I do not consider that there is anything on the facts of this case which makes it appropriate for a Judgements Act rate to be applied merely because there was a period between the first judgment on liability and the second judgment on quantum. The court decided to adjourn the hearing of quantum in July 2008 and, whilst the late witness statement of Mr Barrett may have led the court to review whether quantum could be dealt with, it seems clear that, in any event, quantum issues could not have been properly dealt with at that stage.[41]So far as the pursuit of the appeal by RMC is concerned, it was open to Persimmon, if it had wished, to seek a trial of quantum whilst issues of liability on the First Judgment went on appeal, but it chose not to do so. I do not consider that RMC can be said to be responsible for damages not being assessed in that period. In summary, I do not consider that there are any grounds in terms of conduct which would make it appropriate to apply the Judgments Act rate, where otherwise it would not be appropriate.[42]Fifthly, whilst the court has a discretion under CPR 40.8(1)(b) and (2) to order interest to begin to run from a date before judgment is given, I do not consider that the fact there has been judgment for liability and a subsequent assessment of damages makes it appropriate for the court to impose Judgments Act interest where, as in this case, that rate would not otherwise be appropriate under section 35A of the Senior Courts Act 1981. This was a commercial dispute between two large companies and I see no reason why I should impose the Judgments Act rate to any of the period between the First and Second Judgments. Abatement of Interest[43]RMC submits that Persimmon was guilty of delay in making or pursuing its claim for damages which would justify a disallowance of interest. It refers to the judgment of Jackson J in Claymore at [55] where, after reviewing the relevant authorities, he derived the following three propositions in relation to disallowing interest for periods of delay:
“(1) Where a claimant has delayed unreasonably in commencing or prosecuting proceedings, the court may exercise its discretion either to disallow interest for a period or to reduce the rate of interest. (2) In exercising that discretion the court must take a realistic view of delay. In the case of business disputes, litigation is for all parties an unwelcome distraction from their proper business. It is not reasonable to expect any party to take every litigious step at the first possible moment, or to concentrate on litigation to the exclusion of all else. Delay should only be characterised as unreasonable for present purposes when, after making due allowance for the circumstances, it can be seen that the claimant has neglected or declined to pursue his claim for a significant period. (3) When determining what disallowance or reduction of interest should be made to mark a period of unreasonable delay, the court should bear in mind that the defendant has had the use of the money during that period of delay.”
[44]RMC submits that there was a delay of 3½ to 4 years between January to October 2003 when Persimmon paid for the remedial and haulage works to be carried out and the first intimation of any complaint or claim against RMC in April 2007 and that this delay came within those principles. RMC submits that no explanation had been given for that delay and it should not be required to pay interest for this period of delay.[45]RMC submits that the second period of delay was from 10 October 2008, when directions for the assessment of damages were resisted by Persimmon until 14 October 2010, when directions were given by Coulson J. RMC submits that this period of some two years was a period in which it was incumbent on Persimmon to pursue its claim and RMC, rather than Persimmon, sought the assessment of damages but this was resisted by Persimmon.[46]Persimmon submits that, as stated by Robert Goff, J in BP Exploration (Libya) Limited v Hunt (No 2) [1979] 1 WLR 783 at 847 the basic principle is that interest will be awarded from the date of loss. This was applied recently by Wilson LJ in Aerospace Publishing Limited v Thames Water Utilities Limited [2007] EWCA Civ 3 at [93]. Persimmon also refers to the finding of Coulson J at [299] of the first judgment that Mr Barrett of RMC was well aware that RMC should have carried out the appropriate work under the sale agreement but did not point out the apparent error when Persimmon were doing it themselves. Coulson J added “I was left with the impression that he hoped, by staying silent, to avoid this potentially onerous obligation altogether.” Persimmon therefore says that it would be wrong for interest to be refused in circumstances where RMC knew that the work should have been done by RMC and chose not to raise this with Persimmon.[47]In relation to the second period of delay relied on by RMC, Persimmon submits that it was RMC who appealed against the judgment on liability and that this delayed any realistic possibility of a trial on quantum until after 22 October 2008 when judgment was handed down. Persimmon submits that, in such circumstances, it was reasonable not to hold a separate hearing on quantum pending that appeal. In addition Persimmon submits that the parties agreed a stay of the quantum hearing and there was a period after the Court of Appeal judgment when the parties were engaged in without prejudice negotiations.[48]In this case I do not consider that there should be any disallowance of interest on the basis of unreasonable delay in commencing or prosecuting proceedings. This is a case where RMC was obliged to carry out the relevant work and pay for it but, instead, Persimmon carried it out and RMC has benefited from having the use of money which it should have at the time spent to carry out the work. Whilst there was a period between carrying out the work and intimating a claim which is not explained, it is evident that Persimmon had other priorities and I do not consider they can be criticised for delay in formulating and making the claim against RMC.[49]In relation to the delay in seeking the assessment of damages, I do not consider that Persimmon can be criticised for delaying the assessment of damages until after the Court of Appeal had determined the appeal on liability. Whilst it is open to a claimant to pursue the assessment of damages based upon the first instance decision, there are evidently cost risks in doing so and I do not consider that a claimant who awaits the decision of the Court of Appeal can be criticised for delay. In this case once the judgment of the Court of Appeal was handed down there were some discussions between the parties and I do not consider that there was unreasonable delay in bringing the matter back before the court for the determination of quantum. Overall summary[50]It follows that, in summary, I consider that Persimmon is entitled to interest at 1% over base rate up to 5 February 2009 and thereafter at 2.5%. I do not consider that they are entitled to Judgments Act interest at 8% for any period prior to judgment, nor do I consider that there is a period of delay in which Persimmon unreasonably delayed either in commencing or prosecuting proceedings. Once judgment was given for RMC to pay a sum then Persimmon is entitled to Judgments Act interest from the date of those judgments.[51]On the basis of those findings I would ask the parties to agree the relevant figure for interest both in relation to the Sandhills Lane claim of £46,920.10 and the damages claim of £1,146,257.70.

Cited in 6 later judgments