Anns v Merton London Borough Council (1977)

After Donoghue v Stevenson the question was how far the "neighbour" idea could reach into new situations. Anns gave the answer in a formula that every torts student must know: the two-stage test for a duty of care. First ask whether there is enough proximity for a prima facie duty; then ask whether anything ought to negative or limit it.

Lord Wilberforce said plainly that a claimant no longer needs to find an earlier case on all fours: it "is not necessary to bring the facts of that situation within those of previous situations in which a duty of care has been held to exist." That is what made Anns the high-water mark of an expanding law of negligence.

The case is also a leading authority on the negligence of public authorities — the distinction between the "policy" area and the "operational" area of a statutory power.

The plaintiffs were lessees under long leases of seven flats or maisonettes in a two-storey block at 91 Devonshire Road, Wimbledon. The owners and builders of the block were Walcroft Property Co Ltd. The block was completed in 1962.

The local authority at the time, Mitcham Borough Council, passed the building plans on 9 February 1962. It was later superseded by the London Borough of Merton, which took over its duties and liabilities.

In February 1970 structural movements began — cracks in the walls, sloping floors. The plaintiffs said the foundations were only 2 ft 6 in deep instead of 3 ft or deeper as shown on the deposited plans. They sued the council, alleging that its inspection of the foundations was negligent, or alternatively that failing to inspect was itself negligent. The writs were issued on 21 February 1972.

The trial judge, on a preliminary issue, held the claims statute-barred, treating time as running from the first conveyance of each property. The Court of Appeal reversed him. The council appealed to the House of Lords, and also obtained leave to argue that it owed no duty of care at all. Because both points were preliminary points of law, the House decided them on the assumption that the facts pleaded were true.

1. Is a local authority under a duty of care to owners or occupiers of houses as regards inspection of foundations during building — both a duty to inspect, and a duty to take care if it does inspect?
2. If so, when does the cause of action arise for the purposes of the Limitation Act 1939?

The council's appeal was dismissed, with costs. Lord Diplock, Lord Simon and Lord Russell agreed with Lord Wilberforce; Lord Salmon gave a concurring speech.

The two-stage test

Lord Wilberforce, reading together Donoghue v Stevenson, Hedley Byrne v Heller and Dorset Yacht Co v Home Office, said the duty question "has to be approached in two stages."

• Stage one: "First one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the latter—in which case a prima facie duty of care arises."
• Stage two: if so, "it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed or the damages to which a breach of it may give rise".

He gave Hedley Byrne as an example, where the class of potential plaintiffs was reduced to those who had relied on the statements, and the "economic loss" cases, where the recoverable damages were limited.

Policy and operational areas

Statutes relating to public bodies "contain in them a large area of policy", which the courts call discretion — a decision for the authority, not the courts. Beside it there is "an operational area". The distinction is one of degree, but "the more " operational " a power or duty may be, the easier it is to superimpose upon it a common law duty of care."

It is irrelevant whether the statute creates a duty or a power: "the duty of care may exist in cither case". With a power, liability can exist only if the act complained of lies outside the ambit of the power.

Duty in inspecting

Once an inspection is made there must be a duty to exercise reasonable care. But the claimant carries the burden: he "must prove, the burden being on him, that action taken was not within the limits of a discretion bona fide exercised, before he can begin to rely upon a common law duty of care."

The duty is owed to owners or occupiers — "not of course to a negligent building owner, the source of his own loss." A right of action can only be conferred on an owner or occupier who is such when the damage occurs, which answers the objection of an indeterminate class of plaintiffs.

Damage and limitation

The recoverable damage includes damage to the house itself. Lord Wilberforce classified it as "material, physical damage", the recoverable sum being the cost of restoring the dwelling so that it is no longer a danger to health or safety.

The cause of action does not arise on conveyance of the defective house. It "can only arise when the state of the building is such that there is present or imminent danger to the health or safety of persons occupying it." Since defects first appeared in 1970 and the writs were issued in 1972, none of the actions was barred.

Lord Wilberforce also held that Dutton v Bognor Regis UDC "was in the result rightly decided", but on the legal basis laid down in Anns; he thought Lord Denning MR in Dutton had put the duty too high.

Lord Salmon

Lord Salmon reached the same result. He held the council was under no obligation to exercise its power to inspect, but that if it did inspect before the building was constructed, "it was under a legal duty to the plaintiffs to use reasonable care and skill in making the inspection."

A duty of care in a new situation is found in two stages: (1) a sufficient relationship of proximity, in which carelessness by the defendant is reasonably likely to damage the plaintiff, raises a prima facie duty; (2) that duty may then be negatived, or limited in scope, class of claimant or damages, by other considerations. Applied to a local authority: it is not liable for not inspecting unless it failed properly to exercise its discretion about inspecting; but if its inspector, acting otherwise than in the bona fide exercise of a statutory discretion, inspects without reasonable care to ensure the byelaws are complied with, the authority is liable to owners and occupiers. The cause of action arises when there is present or imminent danger to health or safety.

• Direct question: Trace the development of the duty of care from Donoghue v Stevenson. Place Anns after Donoghue, Hedley Byrne and Dorset Yacht, and set out the two stages in Lord Wilberforce's words.
• Public authority question: When is a public body liable in negligence for the exercise of a statutory power? Use the policy / operational distinction and the burden on the claimant to show action outside a bona fide discretion.
• Limitation point: the cause of action for a defective building arises at present or imminent danger to health or safety, not on conveyance.
• Remember the court: this is a House of Lords decision, persuasive only in India. Do not add later English developments to your answer unless your syllabus material covers them.