Dr.

RAM MANOHAR LOHIYA NATIONAL

LAW UNIVERSITY

Law of Torts

Project
On
Anns v. London Borough Merton and Incremental approach

Submitted to Submitted by

2017-2018
 Content

Serial No. Title

1. Introduction

2. Case brief

3. Anns Test

4. Why we need Anns Test

5. Just and Reasonable :Incremental

Approach

6. Conclusion
 Introduction

To constitute any case under the umbrella of ‘Law of torts’ foreseeability and
proximity plays a major role in solving of cases. Lord Atkin in the case of Donoghue
v. Stevenson1 said that “You must take reasonable care to avoid acts or omissions
which you can reasonably foresee would be likely to injury your neighbour. Who,
then in law is my neighbour? The answer seems to be, person who are so closely and
directly affected by my act that I ought reasonably to have them in contemplations as
being so affected when I am directing my mind to the acts or omissions which are
called in question.”2 This duty is not owned to everyone who is likely to be injured but
only to persons who are so closely affected by one’s act that it is reasonable for one to
have them in contemplation.

The Supreme Court attachment to the Anns test for determining questions of duty of
care in tort is amazing example of judicial loyalty. The court has maintained its belief
in Anns despite the test being not only superseded, but actually denounced, by the
court that originated it. Since it formally adopted the test in 1984 the court has applied
it, is a case of pure economic loss and was therefore later on was overruled, general
principle came to be stated in very wide term.

1
Donoghue v stevenson,SC (HL) 31,
2
Vancouver, [1980] 2 SCR 418
 Case brief of Anns v. London Borough of Merton 3

Facts

 Plaintiff – Anns’ house was breaking due to the poor foundation of building.
 Claimed off council, who had a lease on the building.

Issues

Does a local council owe a duty to check to inspect the building for the occupier of the
building.

Decision

Recovery was allowed by the respective court as there was material damage even
though there was no contractual relationship between them.

Reasoning giving by court:

A new test was developed in this case which is Anns test.

Anns test follows the two conditions to fulfil the test:

1. There must be a sufficient relationship of proximity and foreseeability. If so

then duty of care exists.
2. And have any consideration which could be negative or reduce the scope of
liability.

3
Anns v. London Borough of Merton ,2 All ER 492
 Anns Test

English law knows the Anns test in law of tort and it is originated in 1978 as a new
test develop by the court and to adapt negligence law to new type of defendant mostly
the public authority, new type of damage and duty to protect the interest of the
plaintiff. Even in the case of Anns v. Merton London Borough Council involves all
the main points cover to form the Anns test. The claim was for mainly economic loss
suffered by the owner of flats in a building. The foundation was negligently inspected,
or not inspected at all, by the local authority so that the flat suffered damage. The
question of duty of care was argued as a preliminary question. The House of Lords
held that local authority was under a duty of care. In the leading judgement of Lord
Wilberforce framed a general approach that England court should use in deciding duty
of question in new situation:

1. One has to ask whether as between the alleged wrong doer and the person who
has suffered damages there is sufficient relationship of proximity or
neighbourhood such that , in the reasonable contemplation of the former,
carelessness on his part may be likely to cause damage to the latter- in which
case a prima facie duty of care arises.
2. If the first question is answered affirmatively, it is necessary to consider
whether there any consideration which ought to be negative, or to reduce or
limit the scope of the duty or the class of person to whom it is owned or the
damages to which a breach of it may give rise. 4

In England, the Anns test had a short life, in 1990 after Anns had been subjected to
heavy criticism both in and outside the courts, the house of lords overruled Murphy V.
Brentwood District Council5. It too was a claim in negligence against a local authority
for the economic loss to a building owner caused by defective construction. The
House of Lords could have decided against that duty of care without also denouncing
the Wilberforce approach to novel duties of care generally. It is clear, however that the

4
Murphy V. Brentwood District Council, 2 All ER 908
5
Murphy V. Brentwood District Council, 2 All ER 908
judges in Murphy the wrong conclusion on the particular duty question as directly
attribution to a wrong approach, as reflected in the Wilberforce formula, to duties of
care in general.

The Wilberforce two-stage test therefore sank from view in England. The only general
structure the English court have since adopted to determine whether a duty of care
exists in a novel situation is to ask, not only wheather damage to the plaintiff was a
foreseeable result of the defendant’s negligence, but also whether it is fair, just and
reasonable to impose liability for that damage on the defendant.
 Why do we need Anns Test

The strength of Supreme Court in the Anns test, it is surprising how little the court has
said to examine the test. In Kamloops, which was the decisive first hold of Anns, the
court simply saw itself as “following the path charted by lord Wilberforce” 6 the
court‘s discussion of the merits of Anns is more negative than positive, it is basically
confined to refuting criticism of the Anns approach in the specific context of the
liability of bodies acting under statutory authority.7

It is striking that justice McLachlin chose “incremental approach” to describe the

principle based on Anns test when that was the very expression that the House of
Lords in Murphy had used to describe what Anns was not. What enabled her to do so
was the addition to the Anns approach of law or newly explicit threshold requirement.
The duty question must arise in the context of “new categories of claim”. This idea
had far-reaching implication because it is not only defined when Anns is to be used
but also implied an important qualification as to how it is to be used. Naturally in the
“new categories” criterion is the notion that whenever Anns is applied the newly
recognized or rejected duty must be implied in terms of a “category” of claims. It is
this that allowed Justice McLachlin to use the liable “incremental approach” to
describe what Anns is meant to do. On a proper view of Anns test, new categories of
duty would be added only when precedent allowed it, and incrementally each time for
a defined category of claim. in respect, justice McLachlin approach by justice La
Forest’s in Norsk. He dissented from her conclusion that the defendant tug owned a
duty of care to the plaintiff railway as the main user of the damaged bridge. He
referred to the five categories of cases that tort liability had so far been imposed for
pure economic loss. These were

1. The independent liability of statutory public authorities.

2. Negligent misrepresentation
3. Negligent performance of a service.

6
Kamloops (City of) v Nielsen,2 S.C.R. 2
7
anns v. london borough of merton,2 WLR 1024
 4. Negligent supply of shoddy goods or structures.
5. Relation economic loss. The claim in Norsk was of the fifth type. He
favoured a rile that no duty of care exists for such loss except for
“reasonably well defined and In the Bow Valley case five years later,
Justice McLachlin noted that, in Norsk.

After Norsk the court’s next reflection on the role of the Anns test was in the very
type of case in which the House of Lords had been moved to discard it. The claim was
for the economic loss associated with acquiring a building with a latent defect. In
Winnipeg condominium the court below had followed the English cases denying that
the owner of a building could claim for such loss against those who had negligently
constructed the building. In giving the judgement reversing the decision, Justice La
Foest , like the house of Lord in Murphy ,essentially identified the merits of the two-
part test with the merits of the liability rule .

The house of lords was wrong to reject liability for dangerous construction defects and
by the same token, it was wrong to reject the two-part test. The court’s most recent
discussion of why the Anns test is part of law came in Copper 8. The was whether a
provincial government owned a duty of care to investors who lost money because the
government negligently failed to use its regulatory powers to shut down an unsound
mortgage broker in a timely fashion. The court altered the Anns test in deciding that
no duty of care was owned. The main benefit promised by the Anns test is to steer
judges into making duty of care decisions according to a consistent framework rather
than just proceeding ad hoc. However, when one looks closely at the pattern of
decisions, the methodological consistency starts to look more like a uniform façade
stuck on a row of different buildings. The test actually operates very differently
depending on what the duty problem is.

What, then, is the difference between the two sets of policy considerations?
The answer was:
The Anns analysis is best understood as follows. At the first stage of the Anns test,
two questions arise:
8
. Flores v. Southern Peru Copper Corp., 253 F.Supp.2d 510, 525
Was the harm that occurred the reasonably foreseeable consequence of the
defendant’s act?
Are there reasons, notwithstanding the proximity between the parties established in
the first part of this test, that tort liability should not be recognized here? The
proximity analysis involved at the first stage of the Anns test focuses on factors
arising from the relationship between the plaintiff and the defendant. These factors
include questions of policy, in the broad sense of that word. If foreseeability and
proximity are established at the first stage, a prima facie duty of care arises. At the
second stage of the Anns test, the question still remains whether there are residual
policy considerations outside the relationship of the parties that may negative the
imposition of a duty of care.
 Just and Reasonable: Incremental Development

Anns case before it was finally overruled came up for consideration before the House
of Lords and the Privy Council in later cases which have explained the two stage test
laid down by Lord Wilberforce and pointed out its limitation. In governors of the
Peabody Donation Fund v. Sir Lindsay Parkinson & Co. Ldt 9, it was observed that the
temptation to treat the aforementioned passage from the speech of Lord Wilberforce
as being itself of a definite character should be resisted. it was further laid down that
“in determining whether or not a duty of care of particular scope was incumbent on a
defendant it is material to take into consideration whether it is just and reasonable that
it should be so.”10 In that case the plaintiff were building owner. The approved plan
relating to drainage system was not adhered to during the building operation. The
local authority became aware of the building owner non-compliance with the
approved plan but took no action.

Anns case was again distinguish by the House of Lords in Curran v. Northern Ireland
co ownership housing Association Ltd11 , In this case the plaintiff’s predecessor in title
built an extension to a house with the aid of an improvement grant made by the
Northern Ireland Housing Executive. The housing order 1976 required the
improvement work to be ‘exected to the satisfaction of the executive. The plaintiff
after purchase of the house, discovered that the extension had been so defectively
constructed that it needed to be rebuilt a considerable cost. In an action or damages
against,inter alia, the housing executive, the plaintiff alleges that the executive had
been negligent in causing or permitting the extension to be built defectively. The
House of Lords accepted the explanation of Anns case as given in Peabody Donation
Fund’s case and held that the housing executive owned no duty of care to the
recipients of improvement grants or their successors essentially for the reason that the
executive had no power of control over building operations once approval for grant
was given and so it would be not fair and reasonable to impose a duty of a care on the

9
Fund v. Sir Lindsay Parkinson & Co. Ldt,(198) 3 All ER529
10
Fund v. Sir Lindsay Parkinson & Co. Ldt,1985 A 210
11
Curran v. Northern Ireland coownership housing Association Ltd,1987 AC 718 HL
executive . the passage by Lord Wilberforce speech in Anns 12 was further explained
by the Privy Council in Yuen Kum-Yen v. Attorney General of Hongkong13. It was
further observed that the second stage of Lord Wilberforce’s test which implies policy
considerations is one which will rarely have to be applied. 14 In this case it was held by
the Privy Council that commissioner of deposit taking companies having regulatory
power under a Hong Kong Oridance in regard to reusing or revoking registration did
not owe any duty of care to the depositors who lost their deposits as the company was
run fraudulently and speculatively. This was reached on the ground that there was
absence o close and direct relationship of proximity between the commissioner and
the prospective depositors, although it was reasonably foreseeable that if an uncredit
worthy company were to be placed on or allowed be at risk of losing their money. It
may here be mentioned that the companies and the ordinance had not institutd a far
reaching and stringent supervision system to reasonably warrant an assumption by the
depositors that all registered companies were sound and creditworthy.

In Caparo Industries plc v. Dickman15, the house of Lords noticed that cases
subsequent to Anns have emphasised the inability of any single general principle to
provide a practical test which can be applied to every situation to determine whether a
duty of care is owned and if so,what is its scope. 16After referring to the proximity
principle which involves fairness, Lord Bridge observed “ the concept of proximity
and fairness are not susceptible of any such precise definition as would be necessary
to give to them utility as practical tests,but amount in effect to little more than
convenient labels to attach to the features of different specific situation which, on a
detailed examination of all the circumstances, the law recognising of pragmatically as
giving rise to a duty of care of a given scope. Whilst recognising of course , the
importance of the underlying general prciple comman to the whole field of
negligence, I think the law has now moved in the direction of attaching greater
significance to the more traditional categorisation of distinct and recognisable
12
anns v. london borough of merton,2 WLR 1024
13
Yuen Kum-Yen v. Attorney General of Hongkong, 988 AC 175

14
Pramod Malhotra v. Union of India, 2004 3 SCC 4415
15
Caparo Industries plc v. Dickman, 2 AC 605
16
Caparo Industries plc v. Dickman, 1990 1 ER 568
situation as guides to the existence , the scope and the limits of the varied duties of
care which the law imposes. I think recognising the words of Brennan J in the high
court of Australia in Sutherland Shire council v. Heyman17,he said “ it is preferable in
my view, that the law should developed novel categories of negligence incrementally
and by analogy with established categories rather than by a massive extension of the
prima facie duty of care restrained only by indefinable consideration which ought to
negative or to reduce or limit the scope of the duty or the class of person to whom it is
owned”18.Finally the House off Lords in Murphy v. Brentwood District council 19
confirmed the critism in later decisions of the generalised principal stated by Lord
Wilberforce in Anns case and overruled that case as being one purely in the domain of
economic loss which aspect is considered later. The decision in Murphy reaffirmed
that the correct principle is stated by Brenan J in his judgement. 20The tort of
negligence as developed after Anns was open to abuse as described by Lord
Templeman in C.B.S Songs Ltd v. Amstrad Consumer Electronic plc21.

The incremental approach of development to cover new situation as laid down by

Brenan j of Australia and as now approved in Caparo 22 and Murphy will to a large
extent prevent the exploitation of the tort.

17
Sutherland Shire council v Heyman 85 60 alr 1 3-44
18
Caparo Industries plc v. Dickman,1990 1 ALL ER 568
19
Murphy v. Brentwood District council 1990 2 All ER 908
20
1985 60 ALR 1 43-4
21
C.B.S.Songs Ltd v Amstrad Consumer Electronic plc,1998 2 All ER 484 (hL)
22
Caparo Industries plc v. Dickman,1990 1 ALL ER 568
 Conclusion

The advantages of the Anns test as a means of approaching duty of care questions are
hard to force. In response it can be said that it has no particular disadvantages. There
is no doubt that policy has to be integrated into the analysis of duty questions, and the
case can be made that the Anns test has been as good a means as any for doing that. It
is true that, looking at the Supreme Court’s decisions, the actual results are by and
large supportable. I would argue, however, that the test does have two disadvantages
in the way it is currently applied.
First, as discussed above, it treats duty questions that are very different public
authority liability, negligent misstatement as if they were basically alike. The concept
of novel categories works quite differently between these types of duty issues, and the
proximity analysis plays a different role in each. To omit these differences by using a
supposedly universal analytical guide can only create confusion not debilitating, but
not insignificant either.23
Second, even where it works best, in deciding whether to extend liability to new types
of harm or new types of duties of affirmative action, it can distract courts by inviting
them to set off down the Anns road when a more direct route would be better. A good
example is Martel Building, in which the Supreme Court held that the federal Crown,
as tenant of the plaintiff’s building, could not be liable in tort for negligence in its
conduct of the ultimately fruitless negotiations to renew the lease. The Court deployed
Anns and held that, although there was a prima facie duty of care owed by the Crown
as tenant to the landlord, a slew of second-stage policy reasons oppose against the
recognition of the duty. I would argue that the recourse to Anns was unnecessary
because there was a short answer to the plaintiff’s claim. Since, as a matter of contract
law the tenant was under no obligation to negotiate for a renewal at all, it logically
could not be liable in negligence for negotiating unsuccessfully. Three decades of the
Supreme Court’s repeated approval of the Anns test, even if it has revised the meaning
of the test during that time, make it unlikely that the test will be retired anytime soon.
I would suggest that, at least, it should be applied with a greater recognition of its

23
Ratanlal & Dhirajlal, The law of torts( 27ed., Justice G P singh)
limitations particularly because it operates differently in public authority, private
actor, and negligent misstatement cases. I think it would also be worth considering
whether it should be used only in the private actor duty cases. Public authority duty
cases could then be dealt with fairly on the basis of the relevant policies, which are
linked to constitutional and administrative law, without the distraction of the two-
stage test.
The main benefit promised by the Anns test is to steer judges into making duty of care
decisions according to a consistent framework rather than just proceeding ad hoc.
However, when one looks closely at the pattern of decisions, the methodological
consistency starts to look more like a uniform façade stuck on a row of different
buildings. The test actually operates very differently depending on what the duty
problem is. So, I firmly believe that Anns test can be useful for judges to determine
case easily.