Dispute Resolution analysis: The Court of Appeal has upheld a decision to grant summary judgment dismissing a claim by a tenant against a property management company for losses caused by the allegedly negligent acts of the porter of a residential block of flats. The property management company owed no duty of care to the tenant in respect of the acts of the porters they had engaged.
Shamsan v 44-49 Lowndes Square Management Company Limited [2024] EWCA Civ 436
What are the practical implications of this case?
This case suggests that only in relatively narrow circumstances will a property management company of a residential block, tasked with contracting private companies to perform services for the residents, be held to owe a duty of care to residents in respect of the services actually provided. The case itself focused in some detail on the applicable contractual documents. This may limit the extent to which the conclusions reached will be of wider application in this field of dispute. Nevertheless, the Court of Appeal identified that in those circumstances, none of the many categories of case in which a duty of care is founded on an assumption of responsibility applied. In the absence of any specific act or representation by which a property management company can be said to have assumed responsibility, the Court will look to the underlying contractual documentation to see the extent to which (if at all) the property management company was assuming responsibility in respect of the quality of the services it was contracting to be provided. The Court recognised and was willing to uphold the fact that the property management company was not contracting on the basis of any liability as to the quality of the services provided. Those looking to draft leases, sub-leases and other contracts setting out the obligations of property management companies may be guided by this judgment in seeking to ensure the companies do not assume responsibility and find themselves potentially liable in negligence.
What was the background?
The Claimant was the occupier and tenant of a flat in a block in Belgravia, London. The Defendant was a management company which exists to procure services on the part of the tenants of the block. The Defendant became the lessor of the Claimant's flat, having acquired a long lease from the freeholder of the block. A burglary took place at which the Claimant lost jewellery worth approximately £7m when (on her case) porters negligently gave keys to her flat to criminals. The porterage (including key holding) services were provided by companies in the Farebrother group. The Defendant engaged Farebrother to perform the porterage services. The Claimant issued proceedings against the Defendant property management company alleging that it owed the occupants, including the Claimant, a duty of care. The scope of the duty was said to be to take reasonable care in: (1) the provision of such staff as were necessary to keep the Claimant's flat secure; (2) the selection of staff; and (3) the supervision of staff who were reasonably competent to undertake that task. The Defendant sought and was granted summary judgment on the basis that the Defendant did not owed the Claimant such a duty. The claim was dismissed. The Claimant appealed.
What did the court decide?
The appeal was dismissed. The Court of Appeal identified that the liability claimed was a novel one. The liability of the independent contractor, Farebrother was not. However, this was a circumstance in which the property management company had done nothing other than to discharge its contractual duty to appoint the contractor to provide services as its agent. This was not a case of negligent misstatement or any of the many categories of case in which an assumption of responsibility has resulted in the creation of a duty of care. The Court of Appeal did not accept all the reasoning of the Court below, however, felt that the Judge had ultimately come to the correct conclusion in granting summary judgment. The contractual documentation relevant to this claim suggested that the Defendant had been careful not to assume any responsibility for the adequacy of the porterage services. Those contracts alone could be the source of any assumption of responsibility given the lack of any pleaded or evidenced act or representation by the Defendant upon which an assumption of responsibility could be based. The Defendant did not owe the pleaded duty of care to the Claimant.
Case details
- Court: Court of Appeal, Civil Division
- Judges: Lord Justice Underhill, Lord Justice Nugee and Lord Justice Edis
- Date of judgment: 9 May 2024
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