In Beacon Cymru Group Ltd and Others v Mitchell and Others [2025] EWHC 2477 (Ch), the High Court considered whether Contract Holders in Wales were entitled to a repayment of rent that they had paid, but that the High Court had already determined at an earlier hearing there was no requirement upon them to pay. This recent decision has provided valuable guidance for social landlords and housing providers in Wales.
The Facts
Beacon Cymru Group Limited led a group of social housing providers, (“the Landlords”) who accepted that they had been late to provide copies of Electrical Inspection Condition Reports (“EICR”) to their Contract Holders following the changes in housing law in Wales by reason of the Renting Homes (Wales) Act 2016, and associated legislation, that had come into force on 1 December 2022.
The Court was asked to determine whether the Landlords were required to refund rent that the Contract Holders had paid for within the period between the date that the Contract Holders should have received the EICR and the date that they actually received their copy of that document.
It had earlier been determined that the delay in provision of the EICR was contrary to the provisions of the Renting Homes (Fitness for Human Habitation) (Wales) Regulations 2022 (the “FHH Regs”). It had also been earlier determined that by reason of the contractual provisions in the Contract Holders’ Occupation Contracts the requirement to pay rent during that period had been removed. We understand that these earlier decisions are subject of applications to the Court of Appeal that are yet to be determined, but they remain good law at the time of writing.
The Proceedings
The Landlords were concerned that they might have to refund a significant amount of money in rent received and sought judicial guidance. A group of nominated Contract Holders agreed to act as defendants in the proceedings for this purpose. The Contract Holders were encouraged by the Court to counterclaim a refund of their rent for the aforementioned period in order to allow the Court to determine whether such a refund was payable.
The Counterclaims: Mistake of Law and Unjust Enrichment
The Contract Holders argued that they had made the following mistakes:-
(1) They did not know the Landlords were obliged to provide them with copies of the EICRs by 15 December 2023, and
(2) They did not know that the Landlord having not provided the EICRs by that date meant that contractually the Contract Holders were not required to pay rent until the EICR was provided.
The Contract Holders claimed that the rent they paid during this period was paid by reason of a mistake of law, and should therefore be refunded.
The Decision
The Court had to consider three questions;
1. Was rent paid because of a mistake of law?
The Court found that the Contract Holders may have been mistaken, but that mistake did not cause them to pay rent. Each Contract Holder who gave witness evidence in the proceedings confirmed that, even if they had known they were not required to pay rent, they would not have withheld payment in the absence of advanced express confirmation from their landlord that payment was not due.
2. Were the Landlords unjustly enriched?
The Court found that the Landlords were not unjustly enriched by receipt of rent that there was no requirement upon the Contract Holders to pay. The Contract Holders enjoyed full use and occupation of the properties. No harm or loss arose from the failure to provide the EICRs on time. The Contract Holders would be entitled to claim no more than nominal damages.
3. Does the Occupation Contract prevent a restitution claim?
While Contract Holders were not required to pay rent during the period of non-compliance by the Landlords, they were not prohibited from doing so either. The Court confirmed that a restitution claim cannot be used to create new rights not granted under the contract or by statute.
Conclusion: Counterclaims Dismissed
The Court dismissed the counterclaims, confirming there was no obligation on the Landlords to refund rent paid covering a period during which the Contract Holders were not required to pay rent.
Ultimately It was decided on the evidence given by the Contract Holders that the Contract Holders had paid rent when they were not required to by reason of a mistake, but it was not the mistake that caused them to pay rent. The counterclaims based on mistake therefore failed on causation.
Further guidance on the evolving area of housing law in Wales is likely to follow should the Landlords continue to pursue further guidance on the requirement to pay rent in the event of technical non-compliance with the FHH Regs (such as the failure to provide copies of existing and compliant documents to Contract Holders) through application to the higher Courts.
