Facts:
Lowndes is the management company that held a head lease on the block of flats and provided landlord services. The individual flats were all let on long sub-leases. The appellant was the tenant of Flat 9, 48 Lowndes Square under an assured short hold tenancy agreement granted by Senora Holdings Limited in September of 2018.
Lowndes covenanted to provide landlord services and the leaseholders agreed to pay for them through the service charge. The sub-leases contained a disclaimer on the part of the company of liability, whether in negligence or bailment, for the negligent acts of the porters and a provision which deemed the porters to be the servants of the tenants rather than the company when furnishing attendance on tenants.
Lowndes was not party to the lease and had had no prior dealings with the appellant. Having been asked to leave a key to her flat with the porters, it is alleged that the porters handed over the keys to her flats to a complete stranger who gave a copy to the burglars who then stole jewellery and other property valued at £7m.
The appellant issued proceedings in the High Court claiming £7m in damages from Lowndes on the grounds that it was liable in negligence and for breach of bailee’s duties, yet the claim was dismissed.
Decision:
The Court of Appeal agreed with the conclusion of the High Court Judge, although the logic underpinning their conclusion differed slightly. Indeed, Edis LJ noted that he agreed that a summary judgement should have been granted in favour of Lowndes, but was not persuaded by the Judge’s reasoning.
The appellant was seeking to impose a duty of care on a landlord for the negligent acts of an independent contractor. This situation was not recognised in the case law quite the contrary. In Barclays Bank plc v. Various Claimants [2020], the Supreme Court made it clear that a party was not liable for the negligence of his or her independent contractor(s). If a duty was to be recognised in this case, the appellant would need to succeed by “incremental analogy with established duty situations”. However, none of the cases the appellant relied on were analogous to the situation.
The Court was not ready to impose a vicarious liability as the policy reason behind it was to “ensure in so far as it is fair, just and reasonable, that liability for tortious wrong is borne by a defendant with the means to compensate the victim” as explained in Various Claimants v. Catholic Child Welfare Society. Edis LJ noted that it was not ‘fair, just and reasonable’ to impose vicarious liability on the company for the porters’ actions. In fact, even with a modern approach to the ‘fair, just and reasonable’ test, “it would be a novelty to find a liability being imposed on an innocent party when it was not fair just and reasonable that it should be.”
Moreover, the terms of the lease did not establish an assumption of responsibility quite the contrary. The High Court Judge was right to hold that no duty of care was owed by Lowndes. The appeal was dismissed.
With regard to the appellant’s negligence claim, they would not have been prepared to dismiss such a claim at a summary stage as it would offend the Henderson principle.
Implications:
This decision makes it clear that courts are not prepared to impose a duty on an innocent party when it would not be ‘fair, just and reasonable’ to do so. Courts are not prepared to deviate from existing case law. While the Court would have taken a different approach, the outcome would have been the same.
Although clarification on the extent to which the Henderson principle should be applied in the landlord and tenant context would have been welcomed, the Court was not prepared to go on this discussion.