Hodge & Anor v Newport Borough Council

A statutory duty to provide information does not automatically support a private claim by every person who suffers loss from its breach. The intended beneficiaries must be identified by construing the statutory scheme. Under Part XVI of the Housing Act 1985, the duty to inform concerned persons eligible, or likely to be eligible, for assistance so that they could claim it within the prescribed period. It was not intended to protect later purchasers of defective dwellings who were themselves outside the statutory eligibility scheme. The court left open whether “becomes apparent” in section 562(3) required a subjective or objective approach.

The appellants bought a defective dwelling from a former council tenant after the statutory cut-off date. They claimed damages from the respondent local housing authority for breach of its duty under section 562(3) of the Housing Act 1985 to inform a person likely to be eligible for assistance.

The county court dismissed the claim, holding both that the appellants were outside the class protected by the statutory duty and that the authority had not breached the duty in any event. The appeal concerned the construction of section 562(3), including whether the duty extended to subsequent purchasers who could not themselves obtain assistance.

1. Appeal dismissed. The appellants were not within the class of persons to whom the duty in section 562(3) was owed.
2. Per Roch LJ, with Brooke LJ agreeing, the existence of a private law remedy for breach of statutory duty depended on construction of the statute. The issue was not whether the authority could have foreseen that the appellants would suffer loss, because the claim was not founded on a common-law duty of care.
3. The notification and information duties in Part XVI were designed to enable persons eligible, or likely to be eligible, for assistance to apply for it within the ten-year period. They were not designed to prevent defective dwellings being resold without disclosure to later purchasers.
4. The statutory scheme treated eligibility as ending, or being excluded, following relevant disposals after the cut-off date. A later purchaser of a dwelling already in private ownership therefore fell outside the protected class. If the dwelling remained authority-owned, the relevant duties were those under section 563.
5. Ferris J emphasised that the detailed eligibility provisions necessarily identified both those entitled to assistance and those excluded from it. Extending section 562(3) to later purchasers would indirectly compensate persons whom Parliament had excluded from assistance, including companies or trustees for companies.
6. The court declined to decide whether “becomes apparent” required a subjective or objective construction. Roch LJ considered it arguable that an authority could not rely on its careless failure to see an obvious fact; Ferris J noted that an objective construction might also raise difficulties where the authority honestly misunderstood facts relevant to eligibility.

Appeal dismissed with costs.

• Court of Appeal (Civil Division): dismissed the appeal from the judgment of HHJ Mosely dated 9 July 1999.
• Newport County Court: dismissed the appellants’ claim for damages for breach of statutory duty.