ANNS v. MERTON LONDON BOROUGH COUNCIL



Author: Sheetal Varma, Thakur Ramnarayan College of Law

To the point


Anns v. Merton London Borough Council which was decided on 12 May 1977 was the decision of the House of Lords that established a broad test for determining the existence of duty of care in the tort of negligence which was called as Anns test or also referred to as a two-stage test for third party negligence. This case was overruled by Murphy v. Brentwood DC [1991].


Abstract


Anns v. Merton London Borough Council redefined the general duty of care in negligence for the first time since Donoghue v. Stevenson [1932]. It represents a decision in evolution of the negligence law wherein the House of Lords articulated an expansive duty of care framework applicable to public authorities exercising statutory powers. The claimants, lessees of structurally defective flats, sought redress against the local authority, alleging negligent oversight in building inspections, thus precipitating latent structural deficiencies.
The Court established the two-stage test for determining the existence of a duty of care, predicated upon (1) sufficient proximity between the parties such that harm was reasonably foreseeable, and (2) public policy considerations justifying limitations on liability. The ruling unequivocally affirmed that statutory bodies, notwithstanding their regulatory functions, could incur private law liability for failure to exercise reasonable care in executing discretionary inspections.


However, Murphy v Brentwood DC [1991] subsequently dismantled the Anns doctrine, reinstating a more restrictive approach, thereby circumscribing public authority liability within narrower confines.


Use of Legal Jargon


The landmark decision in Anns v Merton London Borough Council significantly influenced the scope of duty of care owed by public authorities, particularly in relation to negligent inspection within the construction sector. The House of Lords articulated a two-stage test, first examining proximity between parties to determine reasonable foreseeability and subsequently considering policy implications that might circumscribe liability. The crux of the claim rested on allegations of statutory negligence, wherein the local authority failed to exercise reasonable care in enforcing building by-laws, resulting in latent defects manifesting as structural deficiencies. The Court affirmed that governmental bodies, while operating under statutory discretion, could still be held accountable in private law if their regulatory oversight was exercised negligently. The authority’s failure to adhere to standard inspection protocols amounted to a breach of duty, giving rise to tortious liability, notwithstanding the absence of explicit statutory obligations. The judgment reinforced that the existence of a statutory power does not negate potential civil liability, provided actions taken exceed the ambit of bona fide discretion. The Court’s reasoning underscored the justiciability of public authority decisions, demonstrating that judicial scrutiny could extend to municipal regulatory functions if harm resulted from administrative failures. The ruling significantly expanded constructive liability, prompting subsequent jurisprudential shifts, culminating in the restrictive approach later adopted in Murphy v Brentwood DC [1991]. Notably, this decision shaped precedential interpretations of public body liability, offering an extensive foundation for evaluating statute-barred claims and establishing causation thresholds in tort law.

Despite its eventual overruling by Caparo Industries Plc v Dickman, Anns v Merton remains instrumental in defining the nexus between statutory authority and private law duties, influencing contemporary discussions on public law obligations, judicial intervention, and negligence standards applicable to governmental oversight.


The Proof


The actions began on 21st February 1972, the plaintiffs were lessees under long lease of seven flats or maisonettes in a two storey block at 91, Devonshire Road, Wimbledon. The owners were also the first defendants, Walcroft Property Company Ltd, after its completion they were granted long lease of the maisonettes.
The local authority at that time was the Mitcham Borough Council. On 9 February 1962 they passed building plans, which were deposited under byelaw. Later this Council was superseded by London Borough Council Merton.


In February 1970 structural irregularities occurred like cracks in the walls, sloping of floors etc. The plaintiffs argued that the issue stemmed from the block’s construction which had inadequate foundations of 2’6 ft instead of required 3’0 ft. Writs were issued against the defendants on Feb 21, 1972. For the first defendants (the builders) the claims were damages for breach of contract and breach of implied undertaking under Section 6 of the Housing Act 1957. As against the Council the claims were for the damages of negligence by their servants or agents in approving the foundations upon which the block was erected. The first defendants did not put any defence and took the responsibility to carry out specific work. On 16th October 1975 an order was made whether plaintiffs claim were statute barred. The issue was tried by Judge Edgar Fay and decided that the claims were statute barred. The case initiated by the plaintiffs appeal ultimately reached the House of Lords from the Court of Appeal. They decided on various questions: i.) Whether the defendant council was under- a duty of care to carry out inspection and secondly if they did whether reasonable care was taken into consideration as held in Button’s case. Thirdly, any other duty to ensure that the blocks were constructed in accordance with the plans or not. ii.) If the defendant council was under a duty as alleged and committed a breach of it resulting in damage.


The House of lords decided that such actions were not barred by limitation. Lord Wilberforce by referring the neighbour principle which was established in Donoghue v. Stevenson, reached that to establish a duty of care, it is not necessary to bring the facts within those situation but it is to establish whether the wrongdoer and the person suffered had a sufficient relation of proximity or neighbourhood such that because of any carelessness he is likely to cause damage to the latter. And if it is affirmative, it is considered whether there is any consideration. The Part II of the Act headed as Sanitation and Buildings is in interest of the safety and health of the occupiers. It also mentions that the authorities should only pass the deposited plan if it complies with the laws and if it contradicts, they should reject it.

The plans here showed that the foundations should be 3’0 or deeper but it was constructed to only 2’6 ft. The builder was under the statutory duty to notify the local authority and the local authority had right to inspect the same. But both the builder and the local authority failed to comply which gave rise to the defect. The local authorities are public bodies with responsibilities and if they do not exercise their discretion they can be challenged in the courts. They are under a duty to fulfil the responsibilities. The duty is to take reasonable care to secure that the builder does not cover the foundations which do not comply with the requirement.


The damages recoverable include all those that is foreseeable arise from the breach of duty of care and it is in the form of material, physical and it is recoverable to restore the dwelling and expenses for necessary displacement.


The Council is liable as it was under a duty to the plaintiffs to carry out the inspection with reasonable care and skill. A surveyor’s report on page 106 of the Record stated that the 3 ft is the minimum depth and if the foundation was done to 3 feet the damages would have been avoided. The Council is given statutory power to inspect such foundation and public funds to enable the powers to be used to protect the prospective purchaser. The exercise of such power without any responsibility is not encouraged. It ordered the Council to pay the costs.


The Anns test was established which required a sufficient relationship of proximity and then consideration of reasons. The following years, the court backed away from the Anns approach and went for a more category based reasoning as the test was finally put to rest in Murphy v. Brentwood District Council. Despite being overruled it remains in Canadian law and has been used in 31 Supreme Court cases.


Case Laws


Murphy v Brentwood District Council [1991]
This case involved Mr. Murphy who purchased a house that had been constructed on a defective foundation. The Brentwood District Council, acting under its statutory powers, had approved the building plans despite errors in the foundation’s design. Over time, the house developed structural defects, including cracks and leaks. Unable to afford repairs, Murphy was forced to sell the property at a financial loss and subsequently sued the Council for negligence in approving the flawed plans.


The central issue was whether a local authority owed a duty of care to homeowners for economic losses arising from negligent approval of building plans. The case questioned whether pure economic loss (loss of property value) was recoverable under negligence law.


Judgment


The House of Lords ruled in favour of Brentwood District Council, holding that pure economic loss caused by defective property was not recoverable in negligence. The Court overruled Anns v Merton London Borough Council [1978], rejecting the two-stage test for duty of care and limiting public authority liability.


The Court distinguished between physical harm and economic loss, stating that negligence law primarily compensates physical damage rather than financial losses. This case significantly narrowed the scope of negligence liability for public authorities, emphasizing that economic loss is generally not compensable unless tied to physical harm.


Conclusion


The case significantly broadened the scope of negligence law and underscored the importance of proper inspections in regulatory functions and affirmed that failure to ensure compliance with building by-laws could result in civil liability. However, its expansive approach to duty of care was later overruled in Murphy v Brentwood DC [1991] and Caparo Industries Plc v Dickman [1990], which reinstated a more restrictive framework limiting public authority liability. Despite its reversal, Anns v Merton remains a milestone case that shaped the development of tort law, emphasizing the balance between statutory discretion and private law responsibilities in negligence claims.


FAQS


1: Do we really need the Anns test?
Answer: We do need a reasonably articulate method for determining whether a duty of care exists. The main benefit of Anns test is to steer judges into making a duty of care decisions according to a consistent framework rather than proceeding ad hoc. The test operated differently depending on what the duty problem is. Generally, where the public officials are dealing with the plaintiffs interest directly, proximity can be found. Where they are regulating a branch of activity, proximity is not usually found. To a lesser extent these cases depend on second stage, whether the public authority liability will be too open-ended or whether attaching liability in negligence to a particular decision would assert too much judicial control over executive arm of the government.


2: What were the material facts of the case?
The plaintiffs leased flats built with insufficient foundation depth (2 feet 6 inches instead of 3 feet). Over time, structural defects emerged, including cracked walls and sloping floors, prompting a negligence claim against the builders and local authority.


3: Was the claim statute-barred?
The Court rejected the statute-barred argument, ruling that the cause of action arose when defects posed an imminent danger, not when foundations were first approved.


4: What did Murphy v Brentwood change?
Murphy rejected claims for pure economic loss, distinguishing between physical damage and financial harm, thus limiting negligence liability.

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