Community Gateway Association Ltd v Beha Williams Norman Ltd

A lead consultant advising on a housing stock transfer must exercise reasonable care and skill to ascertain whether the business plan and proposed gap funding cover works promised to tenants or otherwise intended to be carried out. A consultant cannot be criticised for failing to identify additional building works beyond the stock condition survey unless those works were sufficiently apparent as commitments requiring investigation. A draft wish-list does not establish promises merely because it contains more detailed aspirations than the formal offer. A breach causing no proved financial loss does not found a damages claim. A contractual budget limiting liability for disabled adaptations to £250,000 per year, subject to uplift, was decisive where no evidence established a greater obligation or loss.

The claimant housing association sought damages from its former lead consultant for allegedly negligent advice given during the proposed transfer of Preston City Council’s housing stock. It alleged that the consultant failed to identify that the business plan and gap funding application omitted the cost of detailed works contained in a document called Draft 1, and also underprovided for disabled adaptations.

The defendant accepted that duties arose in contract and tort, shaped by the relevant retainers. The central issues were whether the alleged works had been promised or otherwise intended to be carried out, whether the consultant had breached its duties, and whether any breach caused loss.

1. Duty and breach. The consultant’s duties required reasonable care and skill in ascertaining whether sufficient provision had been made in the business plan and gap funding application for works promised to tenants or otherwise intended to be done. The consultant breached that duty in July to October 2004 by confirming that the budget covered the Preston Homes Standard without investigating what that standard meant or whether it corresponded with the stock condition surveys.
2. Status of Draft 1. Draft 1 was an unfinished, provisional wish-list. It was not shown to have been circulated, adopted, or intended to record promises to tenants. The formal Offer was intended to stand alone and contained the relevant commitments. The detailed works now relied upon were not established as promises or agreed obligations.
3. Causation. Even if the consultant had asked the appropriate questions, it was not proved on the balance of probabilities that Draft 1 would have emerged, that its contents would have been accepted as commitments, or that further gap funding would have been sought or obtained. The established breach therefore caused no loss. The tort claim also failed because damage was not proved.
4. Disabled adaptations. The Offer provided for an annual budget of £250,000. The transfer arrangements expressly limited the association’s liability to that sum, subject to inflationary uplift, while the Council retained responsibility for Disabled Facilities Grant applications. No evidence established a greater liability, a budgetary problem, or loss caused by any failure to advise.
5. The claim substantively failed, primarily on causation and, in relation to disabled adaptations, also on liability. The question of nominal damages and costs was reserved for later argument.