Rs Syeda Shahrin Begum v Birmingham City Council
| Jurisdiction | England & Wales |
| Judge | Lord Justice Jackson,Lord Justice Bean,Lord Justice Sales |
| Judgment Date | 20 April 2015 |
| Neutral Citation | [2015] EWCA Civ 386 |
| Docket Number | Case No: A1/2014/0402 |
| Court | Court of Appeal (Civil Division) |
| Date | 20 April 2015 |
[2015] EWCA Civ 386
Lord Justice Jackson
Lord Justice Bean
and
Lord Justice Sales
Case No: A1/2014/0402
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE BIRMINGHAM COUNTY COURT,
TECHNOLOGY AND CONSTRUCTION COURT
HIS HONOUR JUDGE DAVID GRANT
2BM30054
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Stephen Cottle (instructed by Eric Bowes & Co) for the Appellant
Mr Jonathan Manning and Mr James Sandham (instructed by Birmingham City Council) for the Respondent
Hearing date: 5 th March 2015
This judgment is in three parts, namely:
| Part 1. Introduction | Paragraphs 2 to 7 |
| Part 2. The facts | Paragraphs 8 to 21 |
| Part 3. The appeal to the Court of Appeal | Paragraphs 22 to 34 |
This is an appeal by a claimant against a costs order, which effectively wipes out the damages that she has recovered in the litigation. The claimant has succeeded in her claim for breach of statutory duty, but failed in her claims for negligence and misrepresentation based upon substantially the same facts. The issue in the appeal is whether the judge was entitled to make such a swingeing costs order by reason of the claimant's failure correctly to characterise the legal cause of action to which her pleaded facts gave rise.
I shall refer to the Housing Act 1985 as "the 1985 Act". Part V of the 1985 Act, which is entitled "The Right to Buy", contains provisions which (in certain circumstances) enable secure tenants of dwelling houses owned by local authorities to purchase those properties. Section 125 of the 1985 Act provides:
" 125. Landlord's notice of purchase price and other matters
(1) Where a secure tenant has claimed to exercise the right to buy and that right has been established (whether by the landlord's admission or otherwise), the landlord shall—
(a) within eight weeks where the right is that mentioned in section 118(1)(a) (right to acquire freehold), and
(b) within twelve weeks where the right is that mentioned in section 118(1)(b) (right to acquire leasehold interest).
serve on the tenant a notice complying with this section.
…
(4A) The notice shall contain a description of any structural defect known to the landlord affecting the dwelling-house or the building in which it is situated or any other building over which the tenant will have rights under the conveyance or lease."
The local authority in this case discharged its duty under section 125(4A) by attaching to the notice a House Sale Inspection Report. The report has been generally referred to, in this case, as the "HSIR".
The claimant in this action was initially Mr Syed Majid, but subsequently has been his wife, Mrs Syeda Shahrin Begum. I will refer to them as "Mr Majid" and "Mrs Begum". The defendant in the action is Birmingham City Council, to which I shall refer as "the Council".
I shall refer to Eric Bowes & Co, the claimant's solicitors, as "EB". I shall refer to the Technology and Construction Court as "TCC".
After these introductory remarks, I must now turn to the facts.
In July 2001 Mr Majid and Mrs Begum became joint tenants of a terraced house owned by the Council at 95 Church Street, Lozells, Birmingham. In 2003–4 Mrs Begum purchased the house from the Council under the Right to Buy provisions of the 1985 Act. The HSIR dated 20 th October 2003 which the Council provided pursuant to section 125 (4A) of the 1985 Act drew attention to a number of defects, but it is fair to say, nothing unduly serious.
Subsequently cracking appeared in the rear extension of the house. The rear wall had pulled away from the wall of number 93, leaving a large gap. Mr Majid and Mrs Begum made a claim on their insurers. The insurers refused to pay on the ground that the damage was attributable to pre-existing defects.
Mr Majid and Mrs Begum then took legal advice. After much investigation they intimated a claim against the Council for the cost of the necessary remedial works. By a letter dated 20 th August 2009 their solicitors, EB, alleged that the Council ought to have drawn attention to the pre-existing structural defects, but had failed to do so. EB enclosed a copy of the HSIR dated 20 th October 2003 and commented that the Council was obliged to disclose "all structural defects which are known to it and which affect the property". This phrase was a reference to section 125 (4A) of the 1985 Act and would no doubt have been understood as such by the Council officials. The Council denied liability.
On 8 th April 2010 EB issued proceedings against the Council in the Birmingham County Court, naming Mr Majid as the claimant. Mr Majid remained as claimant in the action until September 2011, when Mrs Begum, who is and was the legal owner of the property, was substituted as claimant.
A more challenging issue for the claimant's legal team was to identify the relevant cause of action. They originally pleaded a claim for negligence and misrepresentation. It was not until 14 th May 2012 that they amended to plead the cause of action upon which the claimant ultimately succeeded, namely breach of statutory duty under section 125 (4A) of the 1985 Act.
The trial was originally listed to commence on 14 th May 2012 before His Honour Judge Oliver-Jones QC with an estimated length of two days. There were many reasons why the trial could not go ahead on that date. These included the need to translate documents from English into Bengali, a gross under-estimate of the likely length of trial, the Council's late disclosure and the claimant's late amendment to plead breach of statutory duty. His Honour Judge Oliver-Jones adjourned the trial and transferred the case to the Birmingham Technology and Construction Court.
Thereafter, His Honour Judge Grant, the Birmingham TCC judge, case managed the litigation through to trial in May 2013. The trial lasted five days. The judge handed down his reserved judgment on 4 th June. He held that there were two causes of the damage to the house, namely:
i) lack of wall ties between the right-hand corner of the rear wall of the back addition and the adjoining property, number 93; and
ii) inadequate foundations, which progressively caused damage in the form of cracking in and displacement of the associated drains.
I shall refer to these as "defect 1" and "defect 2".
The judge held that, having regard to the Council's maintenance records over the years, the Council was aware of defect 1 and ought to have disclosed it in the HSIR. The Council was in breach of its statutory duty under section 125 (4A) of the 1984 Act in that regard and liable to the claimant in damages. The Council was not aware of or liable for defect 2. The judge dismissed the claimant's claims for negligence and misrepresentation.
The judge was unable on the material before him to determine the relative causative potency of defect 1 and defect 2. At paragraph 94 of his judgment he said:
"Because the Particulars of Claim failed to state the Claimant's case with sufficient clarity on the issue of causation, i.e. to state precisely what defect caused what damage to the property, it is perhaps not surprising that neither structural engineer addressed this particular point in their reports or in their joint statement. In those circumstances, I shall direct that the structural engineers file a further joint statement on the basis of the findings of fact which I have made immediately above, for them to state in percentage terms what was the respective causal potency of the two causes of structural damage to the property."
The experts duly complied with that direction. There was a further hearing in November 2013 to deal with causation and quantum. On 18 th December 2013 the judge handed down his second judgment. He held that defect 1 (lack of wall ties) had caused 90% of the damage and defect 2 (inadequate foundations) caused 10% of the damage. He held that if the Council had disclosed defect 1 in the HSIR, the claimant would have insisted upon rectification before purchasing the property. The judge assessed remedial costs at £71,178 and general damages for inconvenience at £11,500. After...
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