20/12/2020

The things you never told me….

TJ v London & Quadrant Housing Trust, County Court at Central London, 18 November 2020, HHJ Saggerson. (Unreported, but I’ve seen the judgment.)

This was a claim in negligent misstatement brought by Ms J. (For transparency, my Anthony Gold colleague Debra Wilson acted for Ms J). It is, I think, an unprecedented case, and one with ramifications.

The brief facts – in 2014 Ms J was looking into a mutual exchange with the tenant of a ground floor flat in Finsbury Park. This was one of two flats in a Victorian terrace, both tenanted and for which L&Q were the landlord. An  L&Q housing officer, Ms James took on providing assistance for the exchange, including preparation of legal documents.

The claimant’s case and evidence, accepted by the Court, was that before entering into the exchange, she had had the following conversations with Ms James:

On 14 July 2014, in a telephone call discussing the proposed property exchange, the Claimant asked Ms James to provide her with some background on the property and asked: “…if there were any complaints or Anti-Social Behaviour on the system? Ms. James said: “Let me have a look…” and further: “There is nothing that I can see on the system.”
On 16 July 2014, the Claimant attended a meeting at the Defendant’s offices to execute the necessary Deed of Assignment (prepared by the Defendant). The Claimant asked Ms. James: “So regarding our conversation on the phone…so there are no complaints or ASB on the system?” Ms. James replied: “No. There’s no complaints, or ASB.” Ms. James, I accept, also shook her head.

However, Ms J, who is black, faced racist abuse and threats from the upstairs neighbours from the start of the tenancy, as well as substantial noise nuisance, culminating in events in April 2015 that caused her to leave the flat on the advice of the police. The upstairs neighbours, a Mr Baluch and Ms Deewahi, were convicted of a public order offence and two racially aggravated offences respectively, but remain in occupation of the upper flat. Ms J has been living with her mother in Nottingham since 2015, but maintaining the rent on the tenancy. L&Q threatened possession proceedings but only gave Ms J priority on a transfer, which may have taken years to come about.

It transpired that L&Q did indeed have information about ASB relating to the flat on their system. A previous tenant of the flat (not the one exchanging), a black man with learning difficulties, had also suffered racist abuse and threatening behaviour from Mr Baluch in 2013. Ms James had not accessed the relevant parts/tabs of L&Q’s system where these were recorded.

Ms J claimed on the basis that Ms James’ statements were negligent misstatement, without which Ms J would not have entered the tenancy, and that in giving the answers, Ms James (and L&Q) had assumed a position of trust and responsibility, such that a duty to exercise reasonable care was created.

L&Q defended. Liability was denied, the claimant’s recollection was challenged. A duty of care was denied, as was breach, causation, and actual and reasonable reliance. Ms J’s losses were also disputed.

Following a three day trial, HHJ Saggerson found that Ms James had made the statements to Ms J, and found as fact the anti social behaviour and racist abuse and threats suffered by and directed at Ms J. From at least January 2015, Ms J was deliberately targeted by Mr Baluch and Ms Deewahi, with threatening and racist overtones. Ms J had no reasonable alternative but to “make herself scarce” after 15 April 2015.

L&Q’s suggestion that Ms J could remain at the flat pending the availability of an alternative demonstrated “a high level of insensitivity”:

In my judgment the Defendant has become entirely defensive with regard to the Claimant’s problems at 32a and has closed its collective eyes to alternative housing resolutions. It has become mired in process and concentrated on the interests of the Baluch family and the housing problems that arise due to the Baluch children and the intractable problem of seeking possession against Baluch and rehousing his difficult family. In other words, at the critical point (April 2015) the emphasis was on the perpetrators (the criminals) not the victim.

However, this by itself did not justify an award of damages.

The Court noted that the “Tackling Racial Harassment: code of practice for social landlords” stated variously:
“Social landlords should always take any history of racial harassment into account when letting properties to black and minority ethnic applicants or offering transfer. Applicants should also be informed of any previous harassment in the area and be offered a package of support if the offer is accepted.” “Social landlords should arrange safe, good quality temporary housing for victims where they fear for their immediate safety, and a permanent transfer if there is no prospect of a safe return….”

Subject to this, Ms James’ function was limited  – it was the administrative process of implementing the exchange. However, the Code was engaged, but was not addressed in the process.

On Ms J’s questions to Ms James, these were straightforward and clear requests. There was no need for clarification about what was meant by ‘ASB’ or L&Q’s ‘system’.

The fact of the matter is that Ms. James’s interrogation of the Arena system was perfunctory and inadequate given that she had clearly agreed to take a look at it in response to the Claimant’s enquiry.

Ms James had alternative courses of action when Ms J asked her questions:

  • Declining to answer whether on data protection grounds or on the grounds that she was not sufficiently proficient to interrogate the system or had no authorisation to do so or did not have the time to embark on such an important search.
  • Referring the Claimant to someone else with more experience on Arena and (as Ms. James would have thought) relevant authorisation to access the ASB module.
  • Answering as she did but with the qualification that her access to the “system” was limited (by time, experience, choice or lack of authorisation) and the “search” had been only for flags.
  • Answering as she did but with the qualification that there appeared to be no “live” or unresolved complaints or ASB but that said nothing about any history involving the property.
  • She reasonably might have simply said the what might come up on the system was not reliable or could not be relied upon or her search was very limited.
  • James also had the option to reconsider her position at the time the question was posed a second time at the face-to-face meeting on 16 July 2014.

Ms James may have intended to be helpful, but she should have expected Ms J to rely on her answers. Had the previous incidents been revealed, Ms J would not have proceeded with the exchange. Had Ms J received a refusal to answer, or more qualified answers, she would have paused the process to make further enquiries, given that she clearly though the issue of ASB to be of importance. Ms J was therefore exposed to the foreseeable risk that she would receive threatening racial abuse from the upstairs neighbours.

On a duty of care, there was an assumption of responsibility and the principles in Hedley Byrne v Heller (1964) A.C. 465 applied.

The duty required Ms. James, in the event that she condescended to answer the Claimant’s questions, to exercise such care as was reasonable in all the circumstances to provide information to the Claimant that was substantially accurate about what was recorded on the Defendant’s Arena system.

In the present case, on the basis of my findings, Ms. James was operating in a sphere such that the Claimant could reasonably rely on the information she provided. Ms. James voluntarily presumed to involve herself in the Claimant’s affairs by choosing to speak. Ms. James chose to speak in unqualified terms after virtually no enquiry of the “system” at all. The Claimant could reasonably rely on Ms. James’s ability (in the sense of facility) to make a reasonable and careful interrogation of the Arena computer system and Ms. James took it upon herself to impart inaccurate information. Had she said that she had only had a “quick glance” at the Arena system or that she did not have access to the whole “file” or all the records or qualified her otherwise unequivocal answer in some way, the position may well have been different.

While some 30 other cases had been cited, it really was “as simple as that”. There was no basis for qualifying or limiting the duty of care in the present case. There were no floodgates. The Defendant always had the option of saying nothing.

The Defendant and its employees have a simple option. Say nothing. It would be perfectly acceptable for them to say to someone such as the Claimant: this is a voluntary swap; you must make your own enquiries.

Any ‘creep’ in the extension of duty was justified on Caparo Industries Plc. v. Dickman (1990) 2 A.C. 605 principles, but the Court didn’t see any ‘creep’.

The scope of the duty was to take reasonable care to answer Ms J’s questions with reasonable accuracy. Ms James had not warranted that the flat was free of ASB issues, nor was L&Q vicariously liable for the criminal behaviour of Mr Baluch and his family. There were, in addition, no data protection issues. The answer could have been yes or no.

It was reasonable for Ms J to rely on the answers given by Ms James. She was in far the weaker position, and could not be expected to appreciate the subjective limitations of Ms James’ understanding, or the limitations of what she had done by a very limited look at the system.

On causation, in relying on Ms James’ statements, Ms J had gone ahead with the exchange with no further enquires.

Accordingly, as a result of Ms. James’s carelessly inaccurate answer, when the exchanges are looked at as a whole, the Claimant was exposed to the foreseeable risk of being subjected to racially aggravated threatening behaviour at the hands of her upstairs neighbours. I do not see that this exposure to foreseeable risk is any different from exposure to other risks. As a direct result of Ms. James’s answers the Defendant put the Claimant in harm’s way. The Defendant is liable for the fact that the Claimant could no longer occupy 32a and was rendered effectively homeless on the advice of the police.

The Defendant has not caused the Baluch family’s racially aggravated threatening behaviour or ASB, only the family is responsible for that. However, the Defendant is responsible for exposing the Claimant to the foreseeable risk of ASB at the hands of the Baluch family rendering her homeless. The fact that in other circumstances the Claimant may have found herself the victim of threatening racial abuse at another property is nothing to the point.

L&Q were therefore liable for the negligent misstatement.

On damages:

Ms J had been effectively homeless since April 2015, and faced anxiety and stress as a result. She was entitled to be put in a position, so far as possible, as if the tort had not occurred,

Ms J could have been more proactive in seeking a transfer. Overall, if she had stated to bid, it would have taken her 2 years to find something suitable, after an initial 6 months as she came to terms with her predicament. The measure of loss for that 2 years and 6 months was the difference in rent between the flat and the open market rent for a reasonably suitable alternative. Based on joint expert valuation, this was £120 per week, totalling £15,600.

On the intangible loss of an assured tenancy:

She was an assured tenant at the time she took the assignment of 32a. It would not have been possible for her to achieve an assured tenancy on the open market. Reasserting her position in the social housing market would also have proved difficult but it would not have been reasonable for her to hold out for an assured tenancy in the social housing market indefinitely. It is necessary to compensate the Claimant for these intangible losses. It can only be in round figures doing the best I can. I assess these elements at £4,400.00 to bring the total to £20,000.00.

In addition, there where the non-pecuniary losses for stress and anxiety for having to move, for being exposed to the conduct of the neighbours and for periods of sofa surfing and staying with her mother. This does not include any compensation for the neighbour’s behaviour in itself, for which L&Q was not responsible. Damages of £7,500 – enhanced by 10% under Simmons v Castle to £8,250.

Special damages for travel costs and hotel expenses assessed at £2,500. Additional special damages for council tax, food costs and contents insurance not awarded as these would have been incurred somewhere in any event.

Total damages of £30,750, exclusive of interest. Interest of 2% for 5 years awarded on special damages only – £250 – for a total of £31,000.

Costs to Ms J on the standard basis. Ms J’s argument for indemnity costs rejected. L&Q’s argument for a percentage costs award rejected.

L&Q were refused permission to appeal.

Comment

Well now…

It is clear from the judgment that L&Q had options to avoid liability (and to avoid making the negligent misstatements).

One option is simply not to answer and to make clear it is upon the prospective tenant to make their own enquiries.

That, from an institutional position, is probably the most attractive – do and say nothing, and no responsibility follows. However, it is also clear that this is the least attractive option if one considers that a housing association (or council) landlord has any social responsibility whatsoever. As the Code of practice states:

“Social landlords should always take any history of racial harassment into account when letting properties to black and minority ethnic applicants or offering transfer. Applicants should also be informed of any previous harassment in the area and be offered a package of support if the offer is accepted.”

This has to also apply to mutual exchanges.

This means that saying nothing amounts to social landlords letting properties to tenants where the landlord has good reason to believe that the tenant may face racial harassment or abuse, but not saying anything to the incoming tenants simply to avoid any prospective liability for negligent misstatement. This is, to put it mildly, not an attractive position.

The answer, surely, has to be to implement the code of guidance properly, and to inform prospective tenants – including training staff to make sure that this is done.

 

 

 

Giles Peaker is a solicitor and partner in the Housing and Public Law team at Anthony Gold Solicitors in South London. You can find him on Linkedin and on Twitter. Known as NL round these parts.

7 Comments

  1. Scott Greenwood

    very interesting I thought that code of practice was archived some time ago can find no reference to it online where can it be found ?

    Reply
    • Giles Peaker

      So it would seem. It is referenced in various council’s ASB/harassment policies, but I can’t find a live copy either.

      Reply
  2. Ian Narbeth

    I fear that this case will lead to social landlords telling their staff either to say nothing or (perhaps worse) to give a seemingly positive answer “but with the qualification that there appeared to be no “live” or unresolved complaints or ASB but that [saying] nothing about any history involving the property.” Social housing tenants cannot be expected to understand the nuances of carefully prepared evasive language. Moreover, many of the conversations will not be in writing and social landlords will doubtless be better at keeping contemporaneous file notes of the words used so that the tenant will have an uphill task to get a case for negligent mis-statement off the ground.

    A code of guidance will only work if social landlords accept that they may have to pay out. L&Q can afford £31,000 plus costs. Many landlords cannot and unless a code has some teeth, they and their lawyers will consider that covering their rear ends is the safest option.

    Reply
    • Giles Peaker

      I think a partial answer, or a qualified one, would also be quite risky. I suspect saying nothing is more likely.

      By the way, if this was a private landlord making statements about their own property, rather than a social landlord on a mutual exchange of tenancies, I would expect misrepresentation to be more clearly made out. In those circumstances, I’m not sure that saying nothing would be an option.

      Reply
  3. Ian Narbeth

    I fear you may be right about them saying nothing. HHJ Saggerson may inadvertently have given the excuse of “on data protection grounds”but that hardly complies with the letter of the Code. “Applicants should also be informed of any previous harassment in the area”, let alone its spirit or best practice.

    Reply
  4. William Flack

    Is there any chance of the rest of us getting to see a copy of the judgment? It sounds very interesting.

    Reply

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