Beacon Cymru Group Ltd & Anor v Dawn Mitchell & Anor [2025] EWHC 2477 (Ch)

Case Nos: PT-2024-CDF-000024 and PT-2024-CDF-000026 k[2025] EWHC 2477 (Ch)IN THE HIGH COURT OF JUSTICECHANCERY DIVISONDIVISIONAL COURTVenue Cardiff Civil and Family Justice Centre, 2 Park St, Cardiff, CF10 1ETDate 2 October 2025B E F O R E:THE HONOURABLE MR JUSTICE GRIFFITHSHIS HONOUR JUDGE JARMAN KC (sitting as a Judge of the High Court)
PT-2024-CDF-000024B E T W E E N:(1) BEACON CYMRU GROUP LIMITED(formerly Coastal Housing Group Limited)(2) TAI CALON COMMUNITY HOUSING LIMITEDCLAIMANTS/ PART 20 DEFENDANTS- and -(1) MRS DAWN MITCHELL(2) MS HELEN LOUISE JONESDEFENDANTS / PART 20 CLAIMANTSPT-2024-CDF-000026B E T W E E N:
Between
BRON AFON COMMUNITY HOUSING LIMITEDClaimantMR WILLIAM JOHN WADLEYIntervenerDEFENDANT / PART 20 CLAIMANTIntervenerA N D:IntervenerTHE WELSH MINISTERSIntervener
Justin Bates KC, Sarah Salmon, Jack Barber and Camille Richards(instructed by Devonshires Solicitors LLP) for Claimants / Part 20 DefendantsRanjit Bhose KC, Tara O’Leary and Hannah Taylor(instructed by Winckworth Sherwood LLP) for Defendants / Part 20 ClaimantsEmyr Jones and Jack Stanley(instructed by Legal Services, Welsh Government) for IntervenerHearing Hearing dates: 29, 30 and 31 July 2025
Approved Judgment
[1]In Coastal Housing Group Ltd and Others v Mitchell and Others [2024] EWHC 2831 (Ch) (“the First Judgment”) we decided issues between the parties arising from the relatively recent coming into force of the Renting Homes (Wales) Act 2016 (“the Act”). This judgment follows on from that decision and decides the counterclaims. Coastal Housing Group Ltd has now changed its name to Beacon Cymru Group Ltd and other parties have dropped out for various reasons. But, that said, the parties are essentially the same as before.[2]The claimants are social housing landlords with many properties and these cases have been selected and brought by them as test cases. The defendants are their contract-holders (the equivalent, in Welsh housing law, of tenants, in English housing law).[3]The following findings in the First Judgment are relevant to the counterclaims.[4]The claimants were under an obligation to give electrical condition reports (“ECRs”) to the defendants following the coming into force of the Act. Unfortunately, although they commissioned and obtained these reports, they failed physically to provide them by the due dates. By the time this oversight was spotted, they were several months overdue.[5]Consequently, the claimant landlords failed to provide the defendants with the ECRs required by regulation 6(3) of the Renting Homes (Fitness for Human Habitation) (Wales) Regulations 2022 (“the Fitness Regulations”). Therefore, the landlords were “not in compliance with a requirement imposed by this regulation”, i.e. regulation 6, within the meaning of regulation 6(6). Therefore, by the operation of regulation 6(6), the defendants’ dwellings were “to be treated as unfit for human habitation” at the material times. They were so treated for the purposes of regulation 11 of the Renting Homes (Supplementary Provisions) (Wales) Regulations 2022 (“the Supplementary Regulations”). This meant that the defendants were “not required to pay rent” because the dwellings were “unfit for human habitation” within the meaning of regulation 11 as a result of the operation of regulation 6(6). The same applied to the contract provisions which were included in the contracts between the claimants and the defendants in compliance with the legislation. The contracts all provided, in terms, and in accordance with the legislation, that the defendants were not required to pay rent when their dwellings were unfit for human habitation. Regulation 6(6) applied to their cases and to their contracts, with the result that their dwellings were “to be treated as unfit for human habitation” in accordance with regulation 6(6). (These points are in para 121 of the First Judgment.)[6]In short, the defendants were not required to pay rent until they were provided, belatedly, with the ECRs to which they were entitled.[7]However, they did pay rent. The only exception is the defendant Mr William Wadley who, like the other defendants, did pay rent throughout the period when the lack of an ECR entitled him not to but who, unlike the other defendants, at a subsequent date withheld rent for a token period of one month. He did this by way of set-off against his counterclaim for repayment of the rent paid earlier, and has thereby created a subsidiary issue, which is whether set-off is available to him in the event that the underlying counterclaim succeeds.[8]By their counterclaims, the defendants claim repayment of the rent they paid when they were not required to pay rent.[9]They do this on the basis that the rent was paid because of a mistake of law. The mistake (as clarified by Leading Counsel in argument) was that none of the defendants knew that, because they had not received an ECR for their homes by the due date (which was, in each case, 15 December 2023), their properties were deemed unfit for human habitation (although they were not, in fact, unfit for human habitation) and they were not required to pay rent. The claimants accept that this was a mistake of law which is capable in principle of founding a restitutionary claim for repayment, on the basis of unjust enrichment, subject to the claimants’ other arguments opposing that claim: see Kleinwort Benson v Lincoln City Council [1999] 2 AC 349 at 366B, 366D and 375E.[10]To be precise, the mistake fell into two parts. None of the defendants knew (first) that the Act required their landlord to provide them with an ECR by 15 December 2023. And none of the defendants knew (second) that, by reason of the landlord’s failure to do so, they were not required to pay rent until the ECR was provided. They only became aware of these points much later, prior to the issue of these proceedings. They only became sure of the second point even later than that, when we delivered the First Judgment, it having been a strongly contested point of law between the parties until then. The landlords maintained that they were required to pay rent despite the late provision of ECRs. The defendants had no thoughts on the matter until (at the instigation of the landlords, who wanted to test the point in this litigation) they were provided with legal advice and representation, well after the ECRs had been given to them.[11]The counterclaims, as pleaded, include claims for damages for breach of contract, alleging that the landlords were in breach of contract when they demanded rent which was not due. Those claims are no longer pursued. The landlords contested whether this would have amounted to a breach of contract. But the concession is made because the defendants accept that, even if they could prove breach, the nature of the alleged breach is such that, on the facts of these cases, only nominal damages could be claimed. We agree. The defendants were not interested in the ECRs at the time and felt none the worse for not having them when they should have had them. They were not even aware of their right to have them. Proper inspections had been carried out. Satisfactory ECRs were, in fact, in existence. As far as the defendants were concerned, they were enjoying the full benefits of the properties which they were paying rent for. There is no basis in the evidence or on the facts of this case for them having suffered any loss which might sound in damages other than nominal damages. The claim for nominal damages is not pursued, and we therefore do not have to decide whether there was a breach of contract as alleged.[12]The issues have been formulated and re-formulated before us in various ways, and some issues have been withdrawn from us in order to concentrate on what is most important to the parties, or to reflect concessions. We deal with them in this judgment in the following[13]The counterclaims are restitutionary claims alleging that the claimants were unjustly enriched by rent which the defendants paid by mistake when they were not required to pay it.[14]Per Lord Hope of Craighead in Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349 at 407-408 (with emphasis added):
“Subject to any defences that may arise from the circumstances, a claim for restitution of money paid under a mistake raises three questions. (1) Was there a mistake? (2) Did the mistake cause the payment? And (3) did the payee have a right to receive the sum which was paid to him? The first question arises because the mistake provides the cause of action for recovery of the money had and received by the payee. Unless the payer can prove that he acted under a mistake, he cannot maintain an action for money had and received on this ground. The second question arises because it will not be enough for the payer to prove that he made a mistake. He must prove that he would not have made the payment had he known of his mistake at the time when it was made. If the payer would have made the payment even if he had known of his mistake, the sum paid is not recoverable on the ground of that mistake. The third question arises because the payee cannot be said to have been unjustly enriched if he was entitled to receive the sum paid to him. The payer may have been mistaken as to the grounds on which the sum was due to the payee, but his mistake will not provide a ground for its recovery if the payee can show that he was entitled to it on some other ground.”
[15]As to Lord Hope’s first question, there is in this case no dispute about the fact of the mistake (see paras ‎9 - ‎10 above). As to his third question, the parties agree that it follows from the First Judgment that the landlords were not entitled to the rent they received.[16]There is, however, a dispute about the answer to Lord Hope’s second question: Did the defendants’ mistake cause the rental payments? We heard evidence on this question and there are also some relevant and undisputed facts.

The undisputed facts

[17]The periods in respect of which the defendants paid their rent when they were not required to do so are agreed as follows: i) Mrs Dawn Mitchell: between 15 December 2023 and 14 March 2024. There is a dispute about whether Mrs Mitchell was also not required to pay rent between 14 March and 4 April 2024 by reason of a failure to give her an ECR in respect of the common parts of her building. We are not asked to decide that at this stage and it makes no difference to the points of principle considered in this judgment. This issue does not arise in relation to other defendants because there were no relevant common parts to their properties. Mrs Mitchell was required to (and did) pay rent monthly in advance. She paid her rent for the period 1 to 31 December 2023 on 1 December 2023. Therefore, she paid it when she was under no mistake, because her right to withhold rent had not yet arisen; the ECR was not due until 15 December 2023. She subsequently paid rent on 1 January 2024 (for the period 1 to 31 January), and again on 1 February 2024 (for the period 1 to 29 February) and again on 1 March 2024 (for the period 1 to 31 March 2024). She was given her ECR on or about 14 March 2024. An ECR in respect of Mrs Mitchell’s flat was signed off on 2 September 2019. An ECR in respect of the common parts of her building had been obtained on 26 July 2019. The date by which the ECR should have been given to her was 15 December 2023. It was, therefore, available to be given to her on that date, although it was not, in fact, given to her at that time; it was merely available. Mrs Mitchell first became aware that her landlord was required to give her an ECR on 19 March 2024. The landlord had realised this before she did and an ECR in respect of her flat had already been posted to her on or about 12 March 2024. She received it on or about 14 March 2024, as we have said. The ECR in respect of the common parts was given to her by 4 April 2024. ii) Ms Helen Jones: between 15 December 2023 and 13 March 2024. Ms Jones was required to pay rent weekly and in advance, every Monday. However, in the relevant period between 15 December 2023 and 13 March 2024 she paid monthly, we assume in advance, at the rate of £412 per month, which she paid on 15 December 2023 (the day she was first entitled to be given the ECR) and again on 15 January 2024, 15 February, and 15 March 2024 (by which time the ECR had already been given to her, on or about 13 March). An inspection was carried out on or about 18 March 2021, which resulted in an ECR in respect of Ms Jones’ property. The date by which it should have been given to her was 15 December 2023. It was, therefore, available to be given to her on that date, although it was not given to her. Ms Jones first became aware that her landlord was required to give her an ECR on 11 March 2024. It was posted to her on or about 11 March 2024 (that is, on the same day that she was aware of her right to it) and she received it in the post on or about 13 March 2024. iii) Mr Wadley: between 15 December 2023 and 25 March 2024. Mr Wadley was required to (and did) pay rent weekly and in advance, every Monday. However, in the relevant period between 15 December 2023 and 24 March 2024 he paid monthly, we assume in advance, at the rate of £538.92, which he paid on 2 January, 1 February, 1 March and 2 April 2024. He had presumably, therefore, paid rent in advance on or about 1 December 2023 as well, although we have not been given details of payments before 15 December. Mr Wadley’s landlord obtained an ECR in respect of his property on or about 25 May 2023. The date by which it should have been given to him was 15 December 2023. It could have been given to him immediately on request, therefore, although it was not in fact given to him. Mr Wadley first became aware that his landlord was required to give him an ECR on 26 March 2024. It was posted to him in the week ending 22 March and he received it by 25 March 2024, before he had even asked for it.[18]Since becoming aware of their rights, neither Mrs Mitchell nor Ms Jones have withheld any rent on account of the past breach by their landlords. They continued to pay their rent in full, both before and after the First Judgment, and have continued to do so to date.[19]Mr Wadley did not withhold rent either, until February 2025, when, for that month only, he withheld rent in the sum of £586.65, which remains in arrears. He did this “in full agreement with the Claimant and purely in order that the Defendant can establish a debt for the purposes of his claim” (Agreed Fact 15(e)). His landlords wanted him to do it, because they wanted to create a debt from him to them “for the purpose of ventilating the arguments in this claim” (Claimants’ skeleton argument para 6), namely the argument about whether he might be entitled to withhold rent after the period of breach by way of set-off against a counterclaim for repayment of rent that was paid when it was not required to be paid. But after February 2025, he resumed payment of his rent in full. That is notwithstanding the fact that the total value of his counterclaim is £1,789.72 (Agreed Fact 22.a.), which is more than the rent he has withheld.

The evidence

[20]Each of the defendants gave evidence before us. In the case of Mrs Mitchell, it was agreed that her witness statement should stand as her evidence, and she was not called to give oral evidence or be cross-examined. Ms Jones and Mr Wadley gave oral evidence in addition to their written evidence and were cross-examined.[21]The claimants called various executive officers employed by them: Deborah Green and Serena Jones of Beacon Cymru, Richard Hopkins of Tai Calon, Alan Brunt of Bron Afon, and Rhea Stevens, Director of External Affairs at Community Housing Cymru (the representative body of not-for-profit housing associations in Wales). The witness statement of Howard Toplis, the former chief executive of Tai Calon, was admitted by virtue of hearsay notices served under CPR 33.2(1). The Welsh Ministers called to give evidence their directors involved in social housing, Joanna Valentine and Emma Williams.[22]An electrical supervisor at Beacon Cymru (Dale Winchcombe) was also called to give evidence, and a witness statement from another electrical supervisor at Beacon Cymru (Stephen Westwood) was admitted by virtue of a hearsay notice served under CPR 33.2(1). However, their evidence related to common parts attached to Mrs Mitchell’s dwelling, which became irrelevant once it was agreed that we should not decide the common parts question (see para ‎17(i) above).

Evidence on behalf of the claimants and Welsh Government

[23]It is clear from the evidence given to us by the witnesses (starting with Serena Jones of the First Claimant), and the documents to which we were referred in the course of evidence and argument, that the landlords’ mistake in thinking that they only had to make the ECR available, rather than understanding that their obligation was actually to give it to the contract-holders, was made in good faith. Although the final version of the legislation provided that “The landlord must ensure that the contract-holder is (…) given - (a) a copy of the most recent electrical condition report…” (Regulation 6(3) of the Fitness Regulations), the original consultation draft version of the Fitness Regulations provided that the obligation was to “make available to the contract-holder… a copy of the report held by the landlord”, which did not necessarily mean physically giving it to the contract-holder in the absence of a request (Regulation 4(1) of the draft Fitness Regulations issued by the Welsh Government on 11 October 2017).[24]As late as 14 September 2022, the First Claimant (then known as Coastal Housing Group) shared an update from a forum known as Community Housing Cymru through which much of the consultation with the Welsh Government was conducted, which recorded the Welsh Government as saying:
“FFHH [i.e. fitness for human habitation] only requires you to have an EICR [i.e. an ECR], as soon as this is done, you comply with FFHH…”
This appears to us not to have been correct, in view of the modified wording in the Fitness Regulations published in January 2022 (which came into force in December 2022). It was suggested to us that it could be correct if the wider context of the passage in which it appears is taken into account, but that nuance was not obvious. We accept the honesty of the answer given by Serena Jones (the First Claimant’s Executive Director of Operations) in cross examination on this point:
“It is clear the response was not correct, and that was one element that reinforced a misunderstanding that we had.”
[25]The correct position, that the ECR must be provided to the contract-holder, was included in the Fitness Regulations themselves and in some of the accompanying information campaign. This included Welsh Government guidance published in March 2022 entitled “Renting homes: frequently asked questions (landlords)”, which said:
“Regulation 6 requires the landlord to ensure there is a valid electrical condition report (a copy of which must be provided to the contract-holder) in respect of the dwelling during each period of occupation.”
[26]However, the key point for present purposes is confined to the brackets, and what is in retrospect unfortunate is that there was no flagging up of the change in wording from the consultation Regulations of 2017 upon which much time and attention had previously been focussed by landlords like the claimants. The claimants did not blame the Welsh Government. They acknowledged, in their evidence, that they made a mistake because of a misunderstanding for which they took the whole responsibility. But it was in our judgment an understandable mistake. It was picked up very swiftly and, once picked up, corrected immediately and without any prompting from any defendant.

The evidence of the defendants

[27]At the heart of each of the counterclaims are factual issues as to what each defendant would have done in relation to rent if she or he had known, as they know now, that as from 15 December 2023, because they had not been given an ECR, their properties were deemed unfit for human habitation and they were not required to pay rent until the ECR was given. This is dealt with in the written evidence of each, and in oral evidence by Ms Jones and Mr Wadley.

The evidence of Mrs Mitchell

[28]Mrs Mitchell in her witness statement (upon which, as we have said, she was not cross-examined) goes into detail of the health and financial issues which her family were facing when they first entered into their assured tenancy with Beacon Cymru some 13 years ago and how grateful she is to her landlord for giving them the opportunity to rebuild their lives. She says that her landlord recognises the value of community schemes such as a community garden and a multi-cultural social community space in which she has become involved and which led to her becoming a board member of Beacon Cymru. She says she owes her landlord a lot.[29]At first blush it may be thought that if someone were told they were not required to pay rent, the first thing they would do would be to stop paying. Mrs Mitchell, in a commendably candid passage of her witness statement, explains why in her case that would not have been her first reaction, and it is worth citing it at length (she refers to Beacon Cymru as the First Claimant):
“27. Withholding rent would harm my relationship with the First Claimant and that is not something I am easily willing to do. It wouldn’t be right; I am not able to set aside the feelings of loyalty and gratitude I have towards the First Claimant. 28. If someone had told me that I didn’t need to pay my rent, the first thing I would have done would be to contact the First Claimant and ask for my ECR. Withholding my rent would not be the first thing I would consider. Even if I knew I was legally entitled to withhold my rent, this would not be my preferred course of action. 29. When you live in someone else’s property, you have limited options, and are very fortunate to have a roof over your head. I am not a combative person and withholding rent to me feels quite combative. I try and resolve matters in the first instance by finding solutions. Withholding rent does not feel like a solution to me. 30. Withholding rent is a big step, I would find it hard to justify it purely because my landlord failed to give me my certificate. Even though I had not received the certificate I trusted the First Claimant would have carried out the relevant electrical tests because they have a duty to and they are a reputable landlord. 31. If people knew that they didn’t have to pay their rent I fear that many others would have chosen to do the same thing. This would have been very stressful for the First Claimant and I understand the consequences this would have. 32. I would need to have been informed in writing by the First Claimant to consider withholding my rent. My occupation contract does not contain the relevant provisions that tells me I can withhold my rent. This is contained within the legislation and as a lay person I would not have understood this. 33. If the First Claimant wrote to me and told me that I didn’t have to pay rent because they were in breach of the Renting Homes Regulations, I would have felt differently and I would have withheld my rent because of their failings.”
[30]We find that, if Mrs Mitchell had known on 15 December 2023 that(1) her landlord was required to provide her with her ECR by that date and(2) she was not required to pay rent until it was provided, she would (in her own words) have tried to resolve matters in the first instance by finding solutions, rather than immediately withholding rent. She would have raised it with her landlord, with a view to getting hold of the ECR to which she was entitled. She would not have withheld rent except as a means of exerting pressure to get the ECR and probably not even then. She would not even have considered withholding rent unless her landlord failed to respond within a reasonable time to her request for an ECR.[31]Ms Green (Beacon Cymru’s Chief Executive) was asked in cross-examination what Beacon Cymru would have done had they been contacted by a contract-holder who had not been given an ECR on 15 December 2023. She replied that they would check their records and if those showed that an ECR had been given they would have said so. If it had not been given then one would have been given “straight away.” We accept that evidence. It is in line with what actually happened. It was, in fact, Beacon Cymru (before its change of name) which realised that an obligation to give Mrs Mitchell an ECR had not been met, and they realised this before she did. As soon as they did realise it, they immediately provided it. If Mrs Mitchell had raised this with them at any time, including as early as 15 December 2023, or even before, they would immediately have given her the ECR. It existed. They had it. There was no difficulty in providing it to her straight away. They would have done that.[32]We have also considered what Mrs Mitchell says in paras 32 and 33 of her witness statement (quoted above). Ms Green gave evidence about this too. She was asked what Beacon Cymru would have done if it had been asked whether Mrs Mitchell was required to pay rent when she was entitled to be given, but had not been given, her ECR. Ms Green said “We would say it was subject to the courts”. She went on to say “We would have to take legal advice”; and “It is not clear what we would say – we would want to be sure we were giving them the right information”.[33]Until the First Judgment (which was handed down on 8 November 2024), it would have been correct to say that “it was subject to the courts” because the position of Beacon Cymru (which we rejected in the First Judgment), was that the defendants were required to pay their rent in the circumstances of this case, given that the ECR existed and was satisfactory and in the correct form, although it had not physically been given to the defendants (who had not asked for it), and given that the properties were all in fact fit for human habitation. Therefore, to the point made in para 33 of Mrs Mitchell’s witness statement, we are confident in finding that, during the relevant period (15 December 2023 to 14 March 2024), there was no possibility of Beacon Cymru writing to Mrs Mitchell and telling her she did not have to pay rent because they were in breach of their obligation to give her the ECR. They did not believe that to be the case at that time. When, in due course, they became alive to the point, their legal advice was followed by this action, in which they are Claimants, and in which they have maintained that she did have to pay rent, notwithstanding the failure to provide the ECR when it was due.[34]This fortifies us in our finding of fact that Mrs Mitchell would have paid her rent even if she had known of her mistake at the time. Had she known the true position, she would not have withheld rent. She would have made enquiries of her landlord and her landlord would have responded immediately and satisfactorily, by promising her and then providing her with the ECR. Upon receipt of the ECR, she would have been happy that it was all in order, and she would never have approached the point of considering the withholding of rent.[35]Our finding is made even more confidently because Mrs Mitchell had paid rent in advance on 1 December 2023, covering the whole of the month to 31 December 2023. When she made that payment, she was under no mistake, because her right to be given the ECR did not arise until 15 December. Therefore, there was more than enough time for her to receive her ECR between her raising with Beacon Cymru its failure to give it to her on 15 December, and the next payment of rent, which was not paid until 2 January 2024.

The evidence of Ms Helen Jones

[36]The witness statement of Ms Jones also gives details of the difficult circumstances in which she took an assured tenancy of her dwelling with Tai Calon in 2010. She says that tenancy gave her a sense of belonging and safety and it meant that her child had her own bedroom. She was also encouraged by her landlord to socialise with groups which it ran, such as a green space improvement project.[37]Ms Jones deals with the potential withholding of rent if she knew she was not required to pay in the following passage of her witness statement (in which she refers to her landlord as the Second Claimant), which was her evidence in chief:
“28. Knowing what I know now about my ECR and my Property being or allegedly being unfit for human habitation would impact my decision to withhold rent. I would never withhold my rent unless I received written confirmation from the Second Claimant which stated that I did not have to pay it. This written confirmation from the Second Claimant would also need to explain why I don’t have to pay my rent and for how long I could withhold it. 29. If the Second Claimant or their legal representative wrote to me and said something along the lines of “we have carried out an investigation and because of something we have failed to do you do not need to pay your rent”
I would firstly check with my neighbours to confirm that they had received the same letter. I would do this to make sure that it was not a hoax. I would also need to call the offices of the Second Claimant to be certain that I need not need to pay my rent. It would need to be in writing before I would withhold my rent. 30. Without this written confirmation from the Second Claimant I would never withhold my rent because I would fear that my daughter and I would be in a position again where we are facing homelessness. I would never do anything to jeopardise my tenancy, I keep my garden tidy and always keep noise down.”[38]She confirmed that position in her oral evidence, including her cross-examination.[39]We accept that evidence. We find as a fact that she would not have withheld her rent even if she had known that from 15 December 2023 she was entitled to receive an ECR and even if she had known that, as a result of her landlord’s failure to give it to her, she was not required to pay rent.[40]Mr Hopkins did not deal with this point in his witness statement (which was his evidence in chief) but he was cross-examined as to what Tai Calon would have done had confirmation been sought about the requirement to pay rent when an ECR had not been given on 15 December 2023. He said legal advice would have been sought. We accept that evidence. In this regard, it is relevant that these proceedings were commenced because the claimants had each taken legal advice and wanted declarations that contract-holders who had not been given ECRs were nevertheless required to pay rent.[41]We find that had Ms Jones known of the requirement to give her the ECR on 15 December 2023, and had she known that she was not required to pay rent until she had it, she would have raised it with her landlord, who would immediately have given the ECR to her. The inspection had been done, and the ECR had been in existence for nearly two years. It was easy to give her a copy. Her landlord was perfectly willing as well as able to give her a copy. It would have given her a copy at once. She would not even have considered withholding rent in these circumstances.[42]If she had asked her landlord about her legal rights, they would not have told her she was not required to pay rent. Their position, until the First Judgment, was that she was required to pay rent.

The evidence of Mr William Wadley

[43]Another candid witness statement was made by Mr Wadley, who had been a tenant of his dwelling since 2011. He volunteers on various committees of Bron Afon. He says he likes living in his property and is happy there, and that he cannot fault his landlord.[44]On the issue of withholding rent, he says this. “19. If someone had told me verbally that I was entitled to a copy of the ECR and without it I did not owe rent, I would have investigated this fully. I would have looked it up online first. My wife and I also would have looked at the legislation directly. I think I then would have followed-up with the Claimant and asked for their take on it. I volunteer with the Claimant and so I would have asked people who I know there directly about the situation. If I was satisfied after my investigations that I did not owe rent, I would have stopped paying rent. 20. I would feel a bit guilty and worried not paying rent and I would have kept the money to one side in case someone came back and said that I owed it. That is what I have done with the rent money I withheld in February 2025.”[45]In cross-examination he confirmed that he knew of the true position on 26 March 2024 but carried on paying rent because he did not want to risk eviction.[46]We find, that had Mr Wadley known of the true position, he would have carried out his own full investigation and would have asked his landlord about it, before even considering the withholding of rent. Such an enquiry would have brought forth the ECR immediately and Mr Wadley would not have withheld rent.[47]We also find that, on enquiry, Mr Wadley’s landlord would have told him that it was their position that he was obliged to pay rent notwithstanding late delivery of the ECR, and he would not have withheld rent without their agreement that he should do so.[48]That is in accordance with the facts behind his set-off claim. Although it is his case that he was entitled to set-off his repayment claim by not paying rent for subsequent periods of occupancy, he did not do that, until he was urged to do so by his own landlord in order to establish the facts for a test case. Even then, he did it only for a short period, which was not enough to cover his whole claim. This gives some support to our finding that he would not have withheld rent unilaterally, and without the full agreement of and reassurance from his landlord.[49]Mr Wadley was particularly anxious about the risk of eviction. We find that he would have regarded the withholding of rent as creating such a risk to an extent which he would not be comfortable with unless he had his landlord’s full agreement and consent to him doing it.[50]Therefore, we find as a fact that Mr Wadley would have paid his rent even if he had not been acting under a mistake. Even if he had known his legal rights, he would not have exercised his rights without positive encouragement from his landlord. They were under no obligation to give this encouragement. They did not in fact give this encouragement, except in respect of his rent in February 2025. They would not have given this encouragement, even if Mr Wadley had known his legal rights and told them his case on those rights. They did not do so when he in fact ran that case, ultimately successfully, in the action which produced the First Judgment on this point, in his favour. Mr Wadley would have paid his rent even if he had known the full facts and the legal arguments which were open to him as a result of those facts. He would have paid his rent even if he had known the true position in law, unless his landlords positively asserted to him that he did not have to.

Conclusion on the evidence

[51]We therefore conclude that none of the rent counterclaimed in this case was paid as a result of a mistake. That is, in itself, fatal to all the counterclaims.[52]However, we will also consider some of the other arguments addressed to us.

ISSUE 2 - WERE THE CLAIMANTS UNJUSTLY ENRICHED AS A RESULT OF THE DEFENDANTS’ MISTAKE?

[53]Unjust enrichment claims are conventionally approached under four headings:(1) Has a party been enriched?(2) Was the enrichment at the expense of another party?(3) Was the enrichment unjust?(4) Are there are any defences? (Banque Financière de la Cité v Parc (Battersea) Ltd [1999] 1 AC 221 per Lord Steyn at 227) although this is only the basis for a structured approach rather than a series of legal tests (Investment Trust Companies v Revenue and Customs Commissioners [2018] AC 275 per Lord Reed at para 41).[54]It is agreed that the claimant landlords (defendants to the counterclaims) were enriched by the payment of rent, and that this was at the expense of the defendants who paid the rent and now counterclaim for its repayment. There is an issue about whether the enrichment was unjust.[55]In this connection, one of the things we have been asked to examine is whether it is in accordance with the statutory purpose, or contrary to the statutory purpose, for a person whose statutory right to receive an ECR has been breached not to be able to counterclaim for repayment of rent that person paid when not required to do so. We addressed the statutory purpose in para 205 of the First Judgment:
“The statutory purpose is, not only that dwellings should be fit for human habitation, but that there should be regular testing and reporting, including reporting to the contract-holders as the persons most affected by electrical hazards and other matters affecting or potentially affecting fitness for human habitation. The statutory purpose is, not only to give contract-holders rights when their property is objectively unfit for human habitation, but to give them also information rights so that they have assurance (when it is not unfit) and details of what is required (when it is, or may be, or is at risk of becoming, unfit). The statutory purpose is to incentivise landlords to honour these rights by linking compliance directly with their right to receive rent. We consider the construction we have adopted to be consonant with the statutory purpose. The claimants’ construction, which we have rejected, is less consonant with the statutory purpose as a whole, relating, as it does, only to a part of it and freeing landlords of any risk to their rent if they do not comply with the information requirements of the Act and its associated regulations.”
[56]We do not think it is necessary or in accordance with the statutory purpose that a person who was not required to pay rent, but who did in fact pay rent, should be entitled to counterclaim for repayment of the rent after the ECR has been provided.[57]The statutory purpose is to incentivise landlords to comply with their ECR obligations. The knowledge that a contract-holder will not be required to pay rent if the ECR is not provided when it is due is a powerful incentive. However, once the ECR has been provided, the statutory purpose has been met. The statutory purpose is not served by allowing contract-holders to reclaim their rent after the event, if they have in fact paid it. That would go further than is necessary to achieve the statutory purpose.[58]It was possible for the legislature to specify, not only that rent did not have to be paid, but that, if it were to be paid, it could subsequently be reclaimed. The legislature did not do that. That supports the view that it was not part of the statutory intention that such a right should exist.[59]In all these cases, the defendants expected to be housed in return for their payment of rent, and they received exactly the housing that they were expecting. They received all the benefits of the contract, except the physical receipt of the ECR. They also, in these cases, received the benefit of property which had been inspected and found to be safe from an electrical point of view, and in respect of which an ECR was already in existence and available on request.[60]We do not think it is unjust for the landlord to retain the benefit of the rent paid by the defendants, notwithstanding the subsequent discovery that a statutory duty physically to give the ECR to the defendants had not been complied with. As we said in paragraph ‎26 above, it was not complied with because of a mistake on the part of the claimants which was understandable in the circumstances. No-one (neither the landlord nor the defendants) had any concerns about the ECR until the point when the ECR was provided, which was as soon as the landlords had spotted their oversight, and after the rent had been paid. We do not think it is unjust for the landlords to retain the rent which was paid to them in this situation, although it was not required to be paid at the time it was paid. We do not think that the landlords, although enriched, were unjustly enriched.[61]It is not unjust for the landlords to retain the rent paid to them in consequence of a breach of duty which has caused the defendants no loss. The landlords have conferred substantial benefits upon the defendants in exchange for the rent. The defendants have suffered no loss as a result of the non-provision of the ECR (hence the abandonment of their damages claims). The defendants did not care about physical receipt of the ECR although they would no doubt care about the electrics being safe (which they were). They only became aware of the non-provision issue when the landlords themselves became aware of it and set about putting the position right. If the defendants are allowed to reclaim the rent in full, despite not having suffered any loss, it is they and not the landlords who will be unjustly enriched. ISSUE 3 - IS A CLAIM FOR UNJUST ENRICHMENT NOT AVAILABLE TO THE DEFENDANTS IN ANY EVENT, GIVEN THAT THERE IS A SUBSISTING CONTRACTUAL RELATIONSHIP BETWEEN THEM AND THE CLAIMANT LANDLORDS?[62]We also consider it relevant that in this case the parties were at the material time in a contractual relationship and the contract between them has not been rescinded or terminated. The contract continues in existence. It has been strongly affirmed by each of the defendants, who have continued to pay rent and to occupy their properties long after they became aware of the breach of duty. The defendants have conceded that, even if they could establish their disputed claims for a breach a contract, they could prove no damage. They have suffered no loss, and no damage. In those circumstances, for them to counterclaim for repayment of rent, not pursuant to the contract, but by way of a restitutionary claim, appears to us to be wrong.[63]It is wrong in principle, because no right to repayment of the rent is given to them by statute, and no right to repayment of the rent is given to them in their contracts, and it is not usual for restitution to be available when the parties are in a subsisting contractual relationship (Goff & Jones on Unjust Enrichment 10th edition (2022) para 3-12). This is discussed by Professor Jack Beatson (later Beatson LJ) in “Restitution and Contract: Non-Comul?” Theoretical Inquiries in Law 1.1 (2000) 141.[64]It is also wrong in law and equity, because it overrides the allocation of risk which the parties had an opportunity to consider in their contract and which the legislature provided for in the legislation, and would provide the defendants with a windfall which no-one else agreed or enacted should be theirs.[65]We do not accept the defendants’ argument that the rent was not paid pursuant to the contract because it was not required to be paid under the contract in the circumstances prevailing when it was paid. First of all, some of the rent was paid in advance and it was due under the contract at the date of payment. But second, and in any event, all the rent was paid pursuant to the contract, even when it was not required to be paid. The rent was stipulated in the contract and it was because of the contract stipulations that it was paid. It was not contrary to the contract that it should be paid. It was not required to be paid, but it was open to the defendants to pay it if they chose. When they made the payments, they made them pursuant to their contracts and for no other reason. We have already found that they did not make the payments as a result of their mistake. As we said in the First Judgment (para 146):
“…of course payment of rent is not “precluded”
. It is not unlawful to pay the rent. There is nothing wrong with paying the rent. No-one is going to stop a contract-holder paying their rent as usual. No-one is going to object to it. No-one did object to it when the contract-holders did, in fact, pay their rent even during the period when (in accordance with our finding on Issue 1A) they were not required to.”[66]Turning to the legislation, we notice that there is provision for compensation in certain cases of breach of the Act, and there is provision for the right to that compensation to be set off against the contract-holder’s liability to pay rent. i) Section 87 of the Act lists a number of obligations under the Act which, if breached, may (by the operation of section 87) give rise to a claim for compensation under the Act. ii) Section 88 of the Act sets out as a fundamental provision, incorporated as a term of all occupation contracts, that, if the landlord is liable to pay compensation under section 87, the contract-holder may set off that liability against rent. We considered these provisions in paras 19-20 of the First Judgment.[67]The duties referred to in section 87 do not include the duty to provide contract-holders with a copy of the ECR relating to their property. Nowhere in the Act or in its associated legislation is a right given, not only not to pay rent, but to reclaim rent which has been paid, or to set-off rent paid when it was not due on account of non-receipt of an ECR against rent paid or payable in a subsequent period.[68]The relief claimed in this action by the counterclaims is not in accordance with the statutory scheme, as well as not being in accordance with the contracts. The statutory scheme and the contracts both provide that the contract-holders are not required to pay rent but neither of them say that rent must not be paid, or that contract-holders who do pay the rent may subsequently reclaim it, on the grounds of mistake, in respect of a period when an ECR should have been given to them and was not. The defendants are relying on restitution to create rights not given to them under the contracts or by the legislation. Their arguments, if successful, would reallocate risk. That is, in our judgment, another good reason for not allowing the counterclaims.

ISSUES 4, 5 AND 6

[69]The other issues were: i) Are the claimant landlords entitled to retain the disputed rent on the basis of counter-restitution? (Issue 4). ii) Was Mr Wadley entitled to withhold rent in February 2025 by way of set-off against his counterclaim? (Issue 5). iii) If the counterclaims succeed, in whole or in part, are the claimants’ rights under Article 1 Protocol 1 of the European Convention on Human Rights (as enacted in Schedule 1 of the Human Rights Act 1998) engaged and breached? (Issue 6).[70]As a result of our decisions on the first three issues, the last three issues do not arise. The failure of the counterclaims means that the claimants do not need to rely on arguments based on counter-restitution (Issue 4). Mr Wadley did not have a counterclaim and so he had no right to withhold later rent by way of set off against his counterclaim, quite apart from the other arguments advanced to us in opposition to his right of set-off (Issue 5). The claimants have lost no rent in this case as a result of the operation of the Act and its associated secondary legislation. Therefore, the claimants’ challenge under Article 1 Protocol 1 falls away (Issue 6).

CONCLUSION

[71]For these reasons, primarily because the mistake in this case was not causative of the defendants’ payment of rent when it was not required to be paid, but also because it is not unjust for the claimants to retain such rent, and also because we should not grant restitution when the contract subsists and no damage has been sustained even assuming a breach of contract, the counterclaims of all three defendants fail and are dismissed.

order

i) Did the defendants pay rent because of a mistake of law? ii) If so, were the claimants unjustly enriched as a result? iii) Is a claim for unjust enrichment not available to the defendants in any event, given that there is a subsisting contractual relationship between them and the claimant landlords? iv) Are the claimant landlords entitled to retain the disputed rent on the basis of counter-restitution? v) Was Mr Wadley entitled to withhold rent in February 2025 by way of set-off against his counterclaim? vi) If the counterclaims succeed, in whole or in part, are the claimants’ rights under Article 1 Protocol 1 of the European Convention on Human Rights (as enacted in Schedule 1 of the Human Rights Act 1998) engaged and breached? This is the issue we considered but did not decide in paras 300-327 of the First Judgment. ISSUE 1 - DID THE DEFENDANTS PAY RENT BECAUSE OF A MISTAKE OF LAW?

Cited in 1 later judgment