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Anns v Merton London Borough Council
Factual and Procedural Background
The Respondents are long-leaseholders of seven flats within a two-storey block situated in The City. The building was erected in 1962 by Company A, which also owned the land. In February 1970 the occupants noticed structural movement, including wall cracks and sloping floors. They allege that inadequate foundations—2 ft 6 in deep rather than the 3 ft shown on the deposited plans—caused the damage.
On 21 February 1972 separate writs were issued against Company A for contractual breaches and against the local authority (now the Appellant) for negligent plan approval and/or negligent or absent inspection of the foundations under building byelaws made pursuant to the Public Health Act 1936. The actions were later consolidated.
The Appellant pleaded limitation. On 24 October 1975 Judge Fay Q.C. held the claims time-barred, counting time from the date each flat was first conveyed (latest: 5 November 1965). While the matter was pending in the Court of Appeal, that court decided Sparham-Souter, holding that a building-defect cause of action accrues upon discovery of damage. Relying on that authority, the Court of Appeal reversed Judge Fay and granted leave for a further appeal.
Before the appeal to the House of Lords was heard, the Appellant obtained permission to challenge whether it owed any duty of care at all. The House therefore addressed both the existence of a duty and the applicable limitation period on the assumption that the pleaded facts are correct.
Legal Issues Presented
- Whether a local authority owes owners or occupiers a common-law duty of care
- (a) to inspect foundations;
- (b) if it elects to inspect, to perform that inspection with reasonable care; and/or
- (c) to ensure compliance with approved plans and byelaws.
- When, for the purposes of the Limitation Act 1939, the cause of action in negligence accrues in cases of latent building defects.
Arguments of the Parties
Appellant’s Arguments
- No common-law duty exists because the Public Health Act confers powers, not duties, to inspect; absence of a duty to inspect negates any duty to inspect carefully.
- Any liability would conflict with the discretionary allocation of resources entrusted to elected bodies.
- Even if a duty exists, the claims are statute-barred because the damage occurred, or was at least actionable, on the date of first conveyance.
Respondents’ Arguments
- The statutory scheme establishes proximity; once the Appellant inspects (or should inspect) it must exercise reasonable care.
- Failure to exercise that care caused hidden defects that were undiscoverable until 1970; limitation should therefore run from the manifestation of damage.
- It would be inequitable if the Appellant escaped liability while Company A (the builder) could be liable for the same negligence.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Donoghue v. Stevenson [1932] A.C. 562 | Neighbour-principle foundation for duty of care. | Used to frame a two-stage proximity/ policy test for deciding whether a duty arises. |
| Hedley Byrne v. Heller [1964] A.C. 465 | Duty may be limited by reliance or class of plaintiffs. | Cited to illustrate circumstances where the scope of duty/damages can be restricted. |
| Dorset Yacht v. Home Office [1970] A.C. 1004 | Public-authority liability for negligence in operational acts. | Supported the view that statutory powers do not preclude concurrent common-law duties. |
| Button v. Bognor Regis U.D.C. [1972] 1 Q.B. 373 | Earlier authority imposing duty on councils for negligent inspection; contained an obiter view on limitation. | Approved in result but its reasoning refined; its limitation dictum rejected. |
| Sparham-Souter v. Town & Country Developments [1976] 1 Q.B. 858 | Cause of action accrues when damage is or ought to be discovered. | Followed to hold the present claims within time. |
| East Suffolk Rivers Catchment Board v. Kent [1941] A.C. 74 | Scope of liability where a public body performs discretionary works badly. | Distinguished; court held it does not create an absolute immunity. |
| Kent v. East Suffolk Rivers Catchment Board [1940] 1 K.B. 319 | Balance between efficiency and thrift in public bodies. | Quoted to explain discretionary resource allocation but not to defeat duty. |
| Geddis v. Proprietors of Bann Reservoir (1878) 3 App.Cas. 430 | Authorised acts done negligently remain actionable. | Relied on to show that statutory authorisation does not excuse negligence. |
| Sheppard v. Glossop Corporation [1921] 3 K.B. 132 | Distinction between deciding whether to act and acting negligently. | Cited to support liability once action is undertaken. |
| Indian Towing Co. v. United States 350 U.S. 61 | U.S. analogy: duty to maintain lighthouse once provided. | Used illustratively for operational-level duties. |
| Gallagher v. N. McDowell Ltd. (1961) N.I. 26 | Builder’s liability in negligence for construction defects. | Referenced to show builder’s duty, avoiding inequitable sole liability on council. |
| Clay v. A.J. Crump [1964] 1 Q.B. 533 | Architect/ builder negligence for unsafe structures. | Illustrative of modern acceptance of liability for building professionals. |
| Bottomley v. Bannister [1932] 1 K.B. 458 | Historic immunity of landlord-builders. | Court indicated it should no longer bar claims for negligent construction. |
| Great Central Ry. v. Hewlett [1916] 2 A.C. 511 | Statutory powers must be exercised with reasonable care. | Quoted to affirm liability for careless statutory inspections. |
| Bagot v. Stevens Scanlan [1966] 1 Q.B. 197 | Earlier view that limitation runs from construction. | Overruled on this point. |
| Higgins v. Arfon Borough Council [1975] 1 W.L.R. 524 | Adopted the now-disapproved construction-date limitation start. | Implicitly overturned. |
| Cartledge v. Jopling [1963] A.C. 758 | Limitation may run before injury is discoverable (personal injury context). | Discussed to highlight legislative response; contrasted with property damage. |
| Davie v. New Merton Board Mills [1959] A.C. 604 | Liability where identity of future plaintiff unknown at time of negligence. | Used to support duty owed to future owners. |
Court's Reasoning and Analysis
Judge Wilberforce, delivering the principal speech, adopted a two-stage test: (1) whether proximity exists between the public body and the claimant; (2) whether policy considerations limit or negate the duty. He found proximity because the statutory scheme is aimed at protecting health and safety of current and future occupiers and the council knows hidden defects will be undetectable once foundations are covered.
The court distinguished between policy (allocation of resources) and operational acts (actual inspection). While the council retains discretion whether to inspect, if it chooses to do so or fails to exercise that discretion responsibly, it must use reasonable care in inspection. The absence of an absolute statutory duty to inspect therefore does not preclude liability for negligent inspection or a negligent decision not to inspect.
Pre-existing authorities denying liability were either distinguished (as dealing with broader policy acts) or limited in light of modern negligence principles following Donoghue v. Stevenson and Dorset Yacht. The House clarified that immunity for public bodies applies only while they act within bona fide discretion; once outside it, common-law negligence principles govern.
On limitation, the House endorsed Sparham-Souter: a cause of action for latent building defects arises when physical damage manifests or is discoverable, not at completion or first conveyance. Because visible damage appeared in 1970 and writs were issued in 1972, none of the claims are time-barred on the pleaded facts.
Holding and Implications
Appeal DISMISSED.
The House of Lords confirmed that a local authority may owe a common-law duty of care to owners and occupiers when exercising (or negligently failing to exercise) its statutory powers of inspection. It also held that in latent-defect cases time under the Limitation Act 1939 runs from the appearance of damage. The decision preserves potential council liability alongside builder liability and refines the boundary between public-law discretion and private-law negligence, but does not purport to create new categories of economic-loss recovery.
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