LEARNING IN LAW

Learning in Law

Learning in Law

Part 1:

Hedley Byrne v. Heller

Hedley Byrne v. Heller [1963] 2 All E.R. 575 is the House of Lords case that recognized the existence of liability for pure economic loss, absent a contractual relationship, arising from a negligent statement. The court, backing away from the traditional view, developed a test for reasonable forseeability of harm.

The bankers for Hedley Byrne (an advertising partnership) telephoned the bank of Heller & Partners Ltd. inquiring about the financial state and credit record of one of Heller's client companies, Easipower Ltd. Hedley Byrne was about to undertake some significant advertising contracts for them, and wanted to be sure of their financial security. Heller vouched for their client's record but qualified it by waiving responsibility, stating that the information was: "for your private use and without responsibility on the part of the bank and its officials." Hedley Byrne relied on this information and entered into a contract with Easipower which went bankrupt soon afterwards. Unable to obtian their debt from the bankrupt, Hedley Bryne sued Heller for negligence, claiming that the information was given negligently and was misleading.

The court found that the relationship between the parties was "sufficiently proximate" as to create a duty of care. It was reasonable for them to have known that the information that they had given would likely have been relied upon for entering into a contract of some sort. This would give rise, the court said, to a "special relationship", in which the defendant would have to take sufficient care in giving advice to avoid negligence liability. However, on the facts, the disclaimer was found to be sufficient enough to discharge any duty created by Heller's actions.

Ghaidan v Godin-Mendoza [2004] UKHL 30

Mr. Ghaidan lived in a homosexual relationship with another man who was the tenant of a flat in London. When his partner died the landlord sought possession of the premises. Applying established case law, the county court held that Mr. Ghaidan did not succeed to the tenancy of the flat as a surviving spouse under the Rent Act 1977 Sch.1 para.2(2) but that he was only entitled to an assured tenancy by succession as a member of the original tenant's family under Sch.1 para.3(1). The landlord subsequently appealed against the decision of the Court of Appeal that Mr. Ghaidan was entitled to succeed to the tenancy of the flat as a statutory tenant under the Rent Act and the latter appealed.

The House of Lords held that Sch.1 para. 2 was a provision that fell within the ambit of Mr. Ghaidans Article 8 right to respect for his home and therefore also engaged his Article 14 right against discrimination. The interpretation established in previous cases of Sch.1 para.2 which excluded survivors in a stable homosexual relationship from the term spouse but not survivors in a stable heterosexual relationship fell foul of Article 8 read in conjunction with Article 14. According to the House of Lords, it was possible under section 3 of the Human Rights Act ...