Insolvency Proceedings

January 11th, 2018 by James Goudie QC in Judicial Control, Liability and Litigation

In China Town Development Co Ltd v Liverpool City Council (2017) EWHC 3347 (Ch) the High Court granted an injunction preventing the City Council from presenting a winding-up petition. There was a genuine argument that a premium for two leases was not due on completion of the first lease.  Barling J concluded that insolvency proceedings were not the appropriate vehicle for resolving a genuine dispute on substantial grounds as to the interpretation of the agreement or whether it should be rectified.  The principles were restated as to interpretation and rectification of contracts.


Whether Duty of Care

January 2nd, 2018 by admin in Judicial Control, Liability and Litigation

The Court of Appeal in CN v Poole Borough Council (2017) EWCA Civ 2185 held that there was no tortious duty of care on the part of the local authority in making a housing placement to protect children from harassment and abuse by neighbours.  Irwin LJ concluded:-

“93.    It is common ground that Parliament did not create a right of private law action for breach of the duties, or negligence in the exercise of the powers, under the Children Act relevant to this case. … the matter must be approached in terms of the existence or absence of a common law duty of care, not in terms of immunity from a duty of care which would implicitly otherwise exist. … policy considerations … bear on whether a duty of care exists, not on immunity.

  1. There are broadly two considerations here, … which would militate against legal liability on these facts. The first is the concern, … in relation to the police, that liability in negligence will complicate decision-making in a difficult and sensitive field, and potentially divert the social worker or police officer into defensive decision-making. The second is the principle that, in general, there is no liability for the wrongdoing of a third party, even where that wrongdoing is foreseeable. Both of these considerations, in my view, bite on the facts in this case.
  2. In any event, insofar as the Defendant exercised powers and bore duties under the Children Act, it was not responsible for housing the Claimants in proximity to those who behaved in an anti-social fashion. This is not a case where the Defendant brought about the risk or had control over the individuals representing the risk: it does not fall into the Dorset Yacht exception to the general rule.”

“97.    … in my view this case illustrates perfectly why it is unjust to extend liability to one agency (the social services department of the local authority) when other agencies (the housing department, the “arms-length” housing provider and the police) are at least as involved and arguably more centrally involved in the relevant problem. By what logic is it just for there to be liability to a claim for damages through alleged omission on the part of social workers here, when those responsible for housing Mr Mitchell and his neighbour Drummond have no potential liability?”

“98.    … I accept … that society places a high emphasis on protecting vulnerable people, particularly vulnerable children. However, the essence of the common law answer to this problem is that it is not effective, or just, to do so by singling out one agency of the State for tortious liability as against the others, particularly in a crude “sectoral” manner.

  1. The Claimants’ claim is based squarely on the extension of liability set down in D v East Berkshire. … The claim stands or falls by that formulation of liability. … claims against local authorities, exercising powers and fulfilling duties under the Children Act, are widespread. In effect … as a result of D v East Berkshire, social workers are sued as a consequence of their dealings with children, where others acting in relation to children in response to other similar statutory duties cannot be sued: a professional or sectoral distinction. The question whether D v East Berkshire remains good law is critical.
  2. With very great respect to the constitution of this Court who reached that decision, I cannot see how it is consistent with subsequent higher authority. It seems beyond doubt that, but for the impact of the ECHR and the supposed need for an extension of common law liability to reflect the obligations of the State under the Convention, the decision would have been against an extension of liability. That consideration was the pivot of the decision. Yet that proposition has been explicitly rejected in the later cases cited above. …
  3. For those reasons I would accept the Defendant’s argument that D v East Berkshire falls into the third class of case in Young v Bristol Aeroplane and should no longer be followed.

102     I have considered carefully whether there was arguably an assumption of responsibility here, so as to bring the case within that exception to the general rule. … In my view there is no basis here for an assumption of care. … there is insufficient here arguably to amount to an assumption of care ... .

  1. Therefore I would also accept the submission that this case on its pleaded facts does not fulfil any of the established exceptions in common law to the general rule that a Defendant is not liable for the wrongdoing of a third party.
  2. Moreover, as should already be clear, it seems to me that the Defendant is correct in submitting that this claim is not in truth based on failures arising from duties and powers under the Children Act. The proposition that the remedy here was removal from the family, from the care of the Claimants’ mother, seems fanciful. The claim is in fact a criticism of the housing functions of the local authority … , shoe-horned into a claim arising from duties and powers under the Children Act 1989.”

Lady Justice King said:-

“106.  I agree that for the reasons given by Irwin LJ, the decision in D v East Berkshire cannot stand with the subsequent decisions of the Supreme Court in Mitchell and in Michael and I too would allow the appeal on both Grounds.

  1. I would wish also to endorse the observations of Davis LJ as to the manner, once it became apparent that there was no viable action against the housing authorities, that this claim was recast by reference to a duty of care arising by virtue of the provisions of the Children Act 1989.”

Lord Justice Davis said:-

“114.  I agree that for the comprehensive reasons given by Irwin LJ, the decision of the Court of Appeal in D v East Berkshire (which departed from the previous decision of the House of Lords in X v Bedfordshire) is not obviously consistent with the subsequent decision of the House of Lords in Van Colle and Smith (see in particular at paragraphs 136 – 140 of the speech of Lord Brown); and it is inconsistent with and cannot stand with the subsequent decisions of the Supreme Court in Mitchell and in Michael. That in the present case the claimants are children, where in Mitchell and Michael they were not, can make no difference. D v East Berkshire is to be taken as overruled by those later authorities.

  1. I also agree that in this case the local authority assumed no responsibility in law to the claimants simply by reason of its exercise (or non-exercise) of its statutory functions with regard to dealing with the position arising on the estate.
  2. In any event, I found the formulated claim, by reference to a duty of care asserted to arise from the availability of asserted remedies under the provisions of the Children Act 1989, most disconcerting. The true complaint in reality was about the failure of the housing authorities to re-house the entire family in the light of the activities of the neighbouring family. …That, as is now accepted, gave rise to no viable cause of action against the relevant housing authorities. To seek then to re-cast the claim for damages against the local authority by reference to an alleged duty to seek and obtain a care order under the Children Act 1989 seems to me little more than legalistic legerdemain, designed to overcome the insuperable obstacles to formulating a viable claim in attacking the housing authorities in the exercise, (or, rather, non-exercise) of their housing functions. The courts should not be prepared to entertain such a step.
  3. It was never said that the mother was an unfit mother. She loved and cared for her (vulnerable) children. They loved and needed her. Nothing she did or did not do caused them any harm: it was the harassment of the neighbours which did. True she failed, in spite of all her efforts, to achieve the cessation of that harassment or relocation of her family. But that was not her fault. On the contrary, it was the various agencies which, rightly or wrongly, have been blamed. But why or how could seeking a care order with regard to the children be justified in such circumstances?
  4. In the present case, it seems to me that seeking a care order from the Family Court, which potentially would split the family, would not simply have been utterly heartless: it seems to me that such a step would have been utterly wrong. In the circumstances of this case, there was no justification for potentially separating, without the mother’s consent, mother from children, children from mother by use of care proceedings. To countenance care proceedings in the Family Court in order to overcome (or provide a subsequent remedy for) the problems caused by the neighbours on the estate would be, I would have thought, tantamount to an abuse of the process of that court.
  5. I am in agreement with the judgment of Irwin LJ. Nothing in this case as pleaded requires or justifies it going to a full trial. It is unsustainable. It should be struck out now.”


Working Time

November 29th, 2017 by James Goudie QC in Judicial Control, Liability and Litigation

On 29 November 2017 the European Court of Justice (“the ECJ”) has given Judgment in Case C-214/16, King v The Sash Window Workshop Ltd, in which Mr King sought an allowance in lieu of annual leave not taken, or taken but not paid, for the years 1999 to 2012, the entire period of his engagement by the Defendant. The Defendant rejected the claim on the basis that Mr King was self-employed.  By the time the case reached the ECJ it was common ground that Mr King was nonetheless a “worker” for the purposes of the Working Time Directive. Read more »



November 6th, 2017 by James Goudie QC in Judicial Control, Liability and Litigation

In Western Avenue Properties Ltd v Sadhana Soni (2017) EWHC 2650 (QB) the Court (at paragraph 21) reaffirmed the principles, the Bolkiah principles, applicable to injunctions to restrain professional advisers from acting on the ground that there would be a risk of the unauthorised use of confidential information, as follows.

  1. The Claimants must show that the Defendant was, or had been, in possession of information that is confidential to the Claimants, and to the disclosure of which they have not consented.
  2. They must then show that the information is or may be relevant to the matters in which the interest of the Defendant’s client, is, or may be, adverse to that of the Claimants.
  3. The burden of proof is on the Claimants, but it is not a heavy one.
  4. The Court’s jurisdiction to grant an injunction arises out of the Court’s equitable jurisdiction to protect confidential information.
  5. The Court must consider whether the Defendant has any confidential information received from the Claimants, which is or may be relevant to the dispute between them and the Defendant’s client. If there is confidential information, but it is clear that it is not relevant to the dispute, there is no risk of the misuse of the confidential information.
  6. If the Claimants establish that the Defendant is in possession of confidential information that is, or may be, relevant to the dispute the evidential burden shifts to the Defendant to establish that there is no risk of misuse or disclosure. The risk must be more than “fanciful or theoretical”, but need not be “substantial”.


Judicial review

November 3rd, 2017 by James Goudie QC in Judicial Control, Liability and Litigation

In Glencore Energy (UK) Ltd v HMRC (2017) EWCA Civ 1716 the Court considered the relationship between Judicial Review and an alternative statutory remedy.  Sales LJ said (paragraphs 54-56 inclusive) that the principle that Judicial Review would be refused where a suitable alternative remedy was available was not disputed.  However, the basis for the principle had to be considered. The principle did not apply as a result of any statutory provision to oust the jurisdiction of the High Court on Judicial Review. The principle was based on the fact that Judicial Review was ordinarily  a remedy of last resort. However, where it was clear that a public authority was acting contrary to the rule of law, the High Court would be prepared to exercise its discretion without waiting for some other remedial process to take its course. In considering what qualified as a suitable alternative remedy, the Court should have regard to the provisions of Parliament. If Parliament had made it clear through legislation that a particular procedure or remedy was appropriate to deal with a standard case, the Court should be slow to conclude that the public interest required it to exercise its Judicial Review function along with, or instead of, that statutory procedure. Unlawfulness might arise which was not of that standard description, in which case the availability of such a statutory procedure would be less significant.  Treating Judicial Review in ordinary circumstances as a remedy of last resort fulfilled a number of objectives. It ensured that the Courts gave priority to statutory procedures as laid down by Parliament, and avoided expensive duplication of the effort which might be required if two sets of procedures were followed in relation to the same underlying subject matter. It minimised the potential for Judicial Review to be used to disrupt the smooth operation of statutory procedures which might be adequate to meet the justice of the case, and promoted proportionate allocation of judicial resources for dispute resolution, saving the High Court from undue pressure of work.


Direct Effect of EU Directives

October 11th, 2017 by James Goudie QC in Judicial Control, Liability and Litigation

In Farrell v Minister for the Environment, Ireland, Case C-413/15, ECJ Judgment on 10 October 2017, the Court has reaffirmed Foster v British Gas and other cases that where a person is able to rely on a Directive against emanations of the State he or she may do so regardless of the capacity in which the public authority is acting, whether as public authority or e.g. employer, and that “unconditional and sufficiently precise” provisions of a Directive, whether or not transposed into domestic law, can be relied on against emanations of the State (such as local authorities).




June 27th, 2017 by James Goudie QC in Judicial Control, Liability and Litigation

Proceedings brought by or against local authorities often contain a claim in restitution, usually on the basis of a mistake. In Astex Therapeutics Ltd v Astrozeneca [2017] EWHC 1442 (Ch) the High Court (Arnold J) has reaffirmed that any mistake either of law or of fact can qualify as a mistake for restitutionary purposes, provided that it is causative, and that in order to establish a prima facie claim to restitution of an enrichment, a party needs to show only that (1) it was mistaken at the time the enrichment was conferred and (2) it was that mistake that had caused that enrichment to be conferred.  In that case the payments were milestone payments and the mistake was as to contractual status.


Possession Proceedings

June 22nd, 2017 by James Goudie QC in Judicial Control, Liability and Litigation

In Hertfordshire County Council v Davies [2017] EWHC 1488 (QB) Mrs Justice Elisabeth Laing rejected a variety of defences and held that the Council was entitled to possession of the School Bungalow (“the Bungalow”) in Hoddesdon in its area. The Defendant moved into it with his family when he became the caretaker at Sheredes School (“the School”). Eventually, after a disciplinary hearing, the Council dismissed the Defendant for gross misconduct. He appealed against the decision to dismiss him, unsuccessfully.   The Council served a notice to quit requiring the Defendant to give up possession. Thereafter the Council issued proceedings for possession. The claim was in due course transferred to the High Court because one of the remedies sought by the Defendant in his counterclaim was a declaration that paragraph 2 of Schedule 1 to the Housing Act 1985 (“the 1985 Act”) is incompatible with his rights conferred by the European Convention on Human Rights. Read more »



June 15th, 2017 by James Goudie QC in Judicial Control, Liability and Litigation

Is authoritative material showing that discriminatory conduct or attitudes were widespread elsewhere in an institution admissible in considering the motivation of an alleged individual discriminator? It may be, rules the Court of Appeal in Chief Constable of Greater Manchester v Bailey (2017) EWCA Civ 425, at paragraph 99.  Such material may make it more likely that the alleged conduct had occurred or that the alleged motivations were operative.  Alternatively, there might be some more specific relevance.  However, such material has always to be used with care.  Moreover, the fact finding tribunal has in any case to identify with specificity the particular reason why it considers the material in question to have probative value as regards the motivation of the alleged discriminator in any particular case. There is no doctrine of “transferred malice”.


Legal professional privilege

May 16th, 2017 by James Goudie QC in Judicial Control, Liability and Litigation

In Holmes v Information Commissioner and Cumbria County Council, EA/2016/0256  the First-Tier Tribunal upheld the Commissioner’s decision refusing to order the County Council to disclose a Counsel’s Opinion.  Regulation 12(5)(b) of the Environmental Information Regulations was engaged, but the balance of public interest was against disclosure.  Nor had legal professional privilege been waived by the County Council, notwithstanding that the Committee Report had stated that “expert legal advice has been sought from counsel on the matter and counsel has confirmed that this is an appropriate way to proceed”. Read more »