Defendant local authority providing service to claimant — Local authority deliberately concealing intention to charge for service — Whether local authority entitled to restitution — Claim allowed
The defendant local authority provided sewerage services to tenants in council-owned accommodation, the cost being notionally included in their council rents. Where a tenant exercised his statutory right to buy that accommodation, the council included a covenant in the conveyance to cover the payment of charges for the continuing provision of those services. They also entered into various contracts for the provision of such services with the owners of privately owned properties. However, they entered into no such contract with the claimant or his predecessor in title. The claimant paid council and water rates, and had no knowledge that, in obtaining sewerage services, he incurred any liability to the defendants.
Between 1982 and 1995, due to an administrative oversight, the council failed either to claim payment for these services or to inform a number of householders, including the claimant, that any charges would be levied. Between 1995 and 2001, this failure to inform continued as the result of a deliberate policy adopted following legal advice. However, in 2001, householders were informed of the charges that would be levied in respect of the previous six years.
The issue before the court was whether the defendants could recover payment for those services under the principles of restitution, given that they had never informed the claimant that a charge would be made, and that the claimant had genuinely believed that he had incurred no liability in respect of these services.
Held: The claim was allowed.
Where a supplier supplied services to another and no contractual relationship existed, the law might afford the supplier a restitutionary remedy. The four elements to be established were whether: (i) a benefit had been gained by the defendants; (ii) that benefit had been obtained at the claimant’s expense; (iii) it was legally unjust for the defendants to retain the benefit; and (iv) a defence was available to the defendants. On the facts of the case, the only question to be decided was whether it was legally unjust for the defendants to retain the benefit.
In general terms, a householder who had received and used services from a supplier would reasonably expect to pay for those services; the fact that the householder was unaware of the identity of the supplier did not remove his liability. However, in the present case, the defendants had deliberately created and perpetuated the belief in the minds of their consumers that no payment was due.
The defendants had no legal right to the arrears that they claimed. They had been the authors of their own discomfort. They had been under a duty, in dealing with users of their services, to be transparent and to disclose from the beginning what might be in store, rather than springing a surprise and later claiming payment of arrears. Accordingly, the council had forfeited the right to charge the claimant for their services.
Murray Hunt (instructed by Leigh Day & Co) appeared for the claimant; Richard Harwood (instructed by the solicitor to Vale of White Horse District Council) appeared for the defendants.
Vivienne Lane, barrister
