England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE EDMONTON COUNTY COURT
(HIS HONOUR JUDGE RIDDLE)

		Royal Courts of Justice Strand London WC2
		6 December 1999

1. LORD WOOLF, MR: This is an appeal against the order of His Honour Judge Riddle dated 23 June 1999. The judge struck out the claimant's particulars of claim in so far as they alleged negligence against the Home Office.
2. The appeal raises the issue of whether the Home Office can be liable for the loss caused to immigrants as a result of an immigration liaison officer negligently and wrongly advising an airline that the immigrants did not have the required documentation to obtain access to this country, if, as a result of this the airline did not fly the immigrants to this country.
3. As this is a case where the judge struck out the relevant parts of the particulars of claim which had been amended, the facts set out in that pleading have to be accepted as correct for the purposes of this appeal, although the Home Office intends to dispute the allegations if the appeal is allowed.
4. The appellants are Somali nationals. They purchased air tickets from British Airways (the first defendant) to fly from Cairo to London on 21 October 1992. On that date the appellants presented their entry documents to British Airways. Only the fifth appellant had a valid passport. The first four appellants, however, had declarations of identity documents issued by the British Embassy in Addis Ababa. The appellants contend that they all had valid visas granting them leave to enter this country.
5. British Airways refused to fly them to London. As a result they were initially detained in Cairo airport for five days and then deported to Ethiopia. All the appellants are members are members of the same family, being fairly close relatives. Some of the appellants' children were intending to make the journey to this country.
6. The appellants' case against British Airways is based on an allegation of breach of contract. To that claim, British Airways have raised various defences. The defence, which is relevant for present purposes, appears in paragraphs 10, 11 and 12 of British Airways defence as follows:

"10. It was an express term of the said agreement that the First Defendant may refuse carriage of any passenger if, in the exercise of its reasonable discretion, it determines that the passenger may not be properly documented or may, with or without cause, be refused entry into any country to be flown into.

11. The reason for the refusal of the First Defendant to carry the said Plaintiffs on the flight was that it was considered that they were not properly documented and/or that they may be refused entry into the United Kingdom on the basis of the documents presented. This was on the basis that only one of the said Plaintiffs had a valid passport.

12. The First Defendant had a reasonable basis for its belief and this was confirmed at the time by the representative of the United Kingdom authorities who was present at the airport."

7. The appellants contend that they suffered loss and damage as a result of British Airways refusing to transport them. They include among that loss and damage distress and injury to feelings.
8. British Airways' defence no doubt arises as a consequence of the Immigration (Carriers Liability) Act 1987. That Act made a carrier who transported an immigrant, who did not have the appropriate papers to support his admission into this country, liable to pay a sum up to £2,000. The Home Office has however provided guidance as to the discretion of the immigration service as to the imposition of that penalty, which includes a statement that the immigration service would not demand the sum if the carrier had acted on mistaken or unclear advice given by the United Kingdom authorities or where there was a genuine or understandable failure to appreciate the meaning of an endorsement.
9. In consequence of the policy reflected in the Immigration (Carriers Liability) Act 1997, the British Government made available at the material times liaison officers who would, or who can be assumed for the purposes of this appeal to, be prepared to give advice to carriers such as British Airways to enable them to perform their responsibilities reflected in the Act.
10. Because of the defence raised by British Airways, the appellants allege that the liaison officer was negligent and that the Home Office is liable for that negligence. They say that if British Airways relied upon the incorrect advice of the liaison officer, as to the validity of the entry documents, it was as a result of that advice that British Airways refused to carry them to this country, as they should have done their entry documents being valid. The appellants contend that because of the negligence of the liaison officer giving wrong advice they suffered loss and damage and that the Home Office is responsible for that loss and damage. This is due to a breach of the duty of care owed by the Home Office to provide correct and accurate information as to the validity of their travel documents on request by a carrier such as British Airways.
11. In the court below and on this appeal, it has been common ground between the parties that the starting point for considering the issue as to whether or not the Home Office owed to the appellants a duty of care, is the three-fold test laid down in the case of Caparo Plc v Dickman [1990] 2 AC 605, and in other decisions of the House of Lords and this court which followed that case. The position was stated in Caparo by Lord Bridge in these terms:

"What emerges is that, in addition to the foreseeability of damage, necessary ingredients in any situation giving rise to a duty of care are that there should exist between the party owing the duty and the party to whom it is owed a relationship characterised by the law as one of 'proximity' or 'neighbourhood' and that the situation should be one in which the court considers it fair, just and reasonable that the law should impose a duty of a given scope upon the one party for the benefit of the other. But it is implicit in the passages referred to that the concepts of proximity and fairness embodied in these additional ingredients are not susceptible of any such precise definition as would be necessary to give them utility as practical tests, but amount in effect to little more than convenient labels to attach to the features of different specific situations which, on a detailed examination of all the circumstances, the law recognises pragmatically as giving rise to a duty of care of a given scope."

12. I cite that passage of Lord Bridge's speech not only because it sets out the three requirements necessary to establish the duty of care, but also because it emphasises the imprecision of the test and that what one is considering can be regarded as no more, or little more, than convenient labels.
13. I also refer to the speech of Lord Oliver regarding the requirement of proximity. He said at page 633:

"'Proximity' is, no doubt, a convenient expression so long as it is realised that it is no more than a label which embraces not a definable concept but merely a description of circumstances from whig, pragmatically, the courts conclude that a duty of care exists."

14. It will be noted that Lord Oliver, like Lord Bridge, refers to both labels and the fact that the concepts are ones which have to be considered pragmatically.
15. In a careful and very clear judgment, His Honour Judge Riddle indicated that there was no difficulty with regard to the question of foreseeability of damage in the present circumstances. It is accepted by Miss Hall on behalf of the Home Office before this court, and was accepted by her in the court below, that in this situation if the allegations of fact relied upon by the appellants are correct, then the need for foreseeability of damage would undoubtedly be met. It was clear that advice that the documentation was not in order could, and in fact did in this case, result, if the accounts are correct, in the appellant eventually being returned to Ethiopia.
16. The judge was not prepared to accept that in this case the Home Office had succeeded in showing that the third test could not be fulfilled. He cited a judgment of Peter Gibson LJ in Swinney [1996] 3 WLR 968, where he said:

"...it seems to me that the judge was justified in taking the view that in a case of this sort the importance public policy considerations asserted by the police must be balanced against the other public policy considerations to which I have referred, and that the appropriate time to do the balancing is at the trial, when all that facts are known the to the court."

17. Judge Riddle continued:
18. "That in my view must equally be the position here as regards the argument that a duty of care should not be imposed for public policy reasons."
19. He went on to indicate that:

"....proximity and fairness are not separate and distinct factors, although in considering the latter the court may have a wider remit."

20. No doubt because of his conclusion as to the wider remit, notwithstanding his application of the approach of Peter Gibson LJ to the public policy aspect of the triple test for the establishment of a duty of care, the judge came to the conclusion that in this case there was insufficient proximity between the appellants and the Home Office, or the liaison officer who gave the alleged advice, to create a duty of care.
21. Miss Hall, in her very helpful and detailed submissions on behalf of the Home Office, contended that the judge was right to come to the conclusion that he did on the issue of proximity. It is important to bear in mind that this case differs from many cases where liability is based on negligent statements. In this case three parties are involved: the liaison officer, British Airways and the appellants. The statement was not made to the appellants but to British Airways. As Miss Hall submitted, it could well be that the appellants had no idea that the liaison officer had given the advice that they now rely upon in order to establish liability. It is on the lack of direct contact between the appellants and British Airways that the argument as to is proximity is based.
22. Both Miss Hall, and Mr Blake QC on behalf of the appellants, accept that there is no authority which clearly lays down either that there is or is not a duty of care in these circumstances. Both parties are equally in agreement that there are only two cases in which a duty of care has been held to exist in a tripartite situation such as exists in this case. Those cases are White v Jones [1995] 2 AC 207, and Spring v Guardian Assurance Plc [1995] 2 AC 297. Both cases are decisions of the House of Lords.
23. I refer, first, to the case of White v Jones. In that case a solicitor acting for a testator was held liable to a beneficiary for his negligence in drawing up a will. The case had similarities to a series of cases stemming from Ross v Caunters [1980] Ch 297. Miss Hall submits that White v Jones is very much a case on its own facts which should be restrictively approached. In support of her submissions, she refers to the later decision of the House of Lords in the case of Williams v Natural Life Foods [1998] 1 WLR 837 where Lord Steyn said:

"Academic criticism of the principle of assumption of risk

Distinguished academic writers have criticised the principle of assumption of responsibility as often resting on a fiction used to justify a conclusion that a duty of care exists: see Barker, 'Unreliable Assumptions in the Modern Law of Negligence' (1993) 109 LQR 461; Hepple, 'The Search for Coherence' (1997) 50 Current Legal Problems 69, at p.88; Cane, Tort Law and Economic Interests, 2nd Ed. (1996), pp 177 and 200. For this criticism two cases which were decided on special facts are cited: Smith v Eric S bush [1990] 1 AC 207. In my view the general criticism is overstated. Coherence must sometimes yield to practical justice. In any event, the restricted conception of contract in English law, resulting from the combined effect of the principles of consideration and privity of contract, was the backcloth against which Hedley Byrne was decided and the principle developed in Henderson's case. In The Pioneer Container [1994] 2 AC 324,335, Lord Goff of Chieveley (giving the judgment of the Privy Council in a Hong Kong appeal) said that it was open to question how long the principles of consideration and privity of contract will continue to be maintained. It may become necessary for the House of Lords to re-examine the principles of consideration and privity of contract. But while the present structure of English contract law remains intact the law of tort, as the general law, has to fulfil an essential gap-filling role. In these circumstances there was, and is, no better rationalisation for the relevant head of tort liability than assumption of responsibility. Returning to the particular question before the House it is important to make clear that a director of a contracting company may only be held liable where it is established by evidence that he assumed personal liability and that there was the necessary reliance. There is nothing fictional about this species of liability in tort."

24. Assumption of risk played an important part in the decision of the House of Lords in White v Jones. In his speech in that case, Lord Goff of Chieveley indicated that the reasoning adopted by Sir Robert Megarry VC in Ross v Caunters created certain structural problems. But he indicated as well that the case was one in which the court was moved to come to a decision by the impulse to do practical justice. At page 259 Lord Goff says:

"In the forefront stands the extraordinary fact that, if such a duty is not recognised, the only persons who might have a valid claim (ie the testator and his estate) have suffered no loss, and the only person who has suffered a loss (ie the disappointed beneficiary) has no claim."

25. It may be said that those comments can be equally applied to the alleged circumstances of this case. If the facts are as the plaintiffs allege them to be, then the position is one where they would have no claim against British Airways; British Airways would at least have an arguable claim against the liaison officer for the negligent advice which he is alleged to have given, but British Airways would suffer no loss because they would be able to rely on the negligent advice of the liaison officer to provide them with a defence against the appellants' claim.
26. If the judge is right, the appellants would undoubtedly have suffered foreseeable loss in consequence of the negligent advice of the liaison officer, but they would be unable to recover compensation for that loss because the person responsible for the negligent advice would not owe them a duty of care. Having pointed out the extraordinary fact to which I have just made reference, Lord Goff continued at page 260:

"Even so it seems to me that it is open to your Lordships' House, as in the Lenesta Sludge case [1994] 1 AC 85, to fashion a remedy to fill a lacuna in the law and so prevent the injustice which would otherwise occur on the facts of cases such as the present."

27. It is to fashion such a remedy that Mr Blake on behalf of the appellants submits that they should be entitled to proceed to trial so that they can establish on the relevant facts that the lacuna, which they contend would otherwise exist in our law, should be filled.
28. Although I recognise that White v Jones is dealing with a situation which is out of the ordinary, I do not regard the approach of the House of Lords either in White v Jones itself, or in the cases by which it has been followed, as indicating that the case cannot be applied to appropriate analogous situations.
29. The other case, Spring v Guardian Assurance Plc, was a case where a reference had been written, possibly by an employer, possibly by a former employer, to a third party concerning the appellant which was inaccurate due to alleged negligence. The House of Lords held by a majority that it was possible in the circumstances of that case for a claimant to recover damages, notwithstanding the fact that the reference was made to a third party, and there could be difficulties with regard to establishing reliance by the claimant on the giver of the reference.
30. Lord Keith gave a dissenting judgment. Lord Goff, who was a member of the majority, gave different reasons for his decision from the other members of the majority. At page 316D of the report he said:

"As will appear hereafter , I have come to the conclusion that, on the facts of the present case, both Guardian Assurance and Corinium owed a duty of care to the plaintiff in respect of the preparation of the reference in question. In my opinion, the source of the duty of care lies in the principle derived from Hedley Byrne & Co. Ltd v Heller & Partners Ltd [1964] AC 465, viz an assumption of responsibility by those companies to the plaintiff in respect of the reference, and reliance by the plaintiff upon the exercise by them of due care and skill in respect of its preparation. I am however concerned by the fact that the plaintiff's case was not advanced to the Appellate Committee on the basis of that principle. In these circumstances I would ordinarily have proposed that, before the appeal could be decided on a point which had not been argued, the parties should be given the opportunity of making submissions upon it. In the present case, however, I understand that a majority of your Lordships are minded to allow the appeal in any event, proceeding upon a broader basis than the principle in Hedley Byrne."

31. Miss Hall, basing herself upon the passage to which I have just referred in Spring, says that that case can be distinguished from the present case, because of the reference that Lord Goff makes in that passage to reliance by the plaintiff. She submits that, on the facts of this case, no such reliance could exist. However, as Lord Goff makes clear, the decision of the remaining members of the House, who were in favour of allowing the appeal, was indeed on a broader basis. In my judgment the case of Spring, although by no means identical so far as the issues are concerned with this case, does provide some support for the contentions advanced by Mr Blake on behalf of the appellants that here a sufficient proximity can be established.
32. As to those submissions, I remind myself of the passages from the speeches in Caparo, to which I have referred, as to the requirement of proximity; in particular that it is no more than a convenient label which embraces not a precisely definable concept but merely a description of circumstances. The precise circumstances which are in issue here have yet to be ascertained and could only be ascertained as a result of a trial.
33. The final case to which I should refer is a case of W v The Home Office [1997] Imm AR 302. In that case this court gave a judgment indicating that, errors made by immigration officers in the course of exercising their statutory discretions do not give rise to a duty of care which could be the basis of an action for negligence. This case is clearly distinguishable from that in W v The Home Office. This is not a situation which involves the performance of a statutory duty connected with the exercise of a statutory discretion. Nothing which I have said so far should be regarded as being inconsistent with the judgment of the court in that case.
34. It seems to me that there is a real distinction between the two situations. The activities of a liaison officer when giving advice to a carrier such as British Airways as to the documentation of would-be immigrants to this country, is not part of the ordinary functions of an immigration officer. It is a responsibility which is exercised by the liaison officer to assist the airline. It is also to assist the immigrants because if they did not have the valid documentation, it is not in their interest to travel the long distances to this country only to be refused entry. It is also in the interests of the Home Office who have the difficult task of controlling immigration in to this country.
35. If those who do have not the appropriate documentation can be prevented or deterred from flying to this country, that makes the administration of the Immigration Act 1971 easier. In my judgment, the fact that there is this interest between the Home Office, the carrier and the would-be immigrant, coupled with the fact that any advice given would obviously have a direct affect upon the immigrants concerned, is part of the reason why the facts in this case should be investigated before a conclusion is reached as to whether a duty of care exists or not. This is an area of developing jurisprudence. Where that is so, the question of whether or not an analogous situation should be recognised as giving rise to a duty of care, should be determined when the facts have been established.
36. Miss Hall, in her submissions, very properly conceded that in this case the decision of the judge could only be upheld if he was entitled to come to the conclusion that the appellant's case had no realistic prospect of success. I do not consider that on a striking out application it was possible to come to that conclusion. The judge correctly directed himself as to the state of satisfaction he should reach before dismissing this part of the appellants' case. But, unfortunately, not having had the benefit of the developed arguments which we have heard, he came to the wrong conclusion on the issue of proximity.
37. I would allow the appeal.
38. LORD JUSTICE CHADWICK: I agree that this appeal must be allowed for the reasons which the Master of the Rolls has given. But in the circumstances that we are differing from the judge below, and in recognition of the cogent submissions put before us by Miss Hall on behalf of the respondent, I add some observations of my own.
39. The claim brought by the appellants against the Home Office (the respondent to this appeal) raises a question of law which can be stated in the following terms: does the Home Office, acting through its immigration officers, owe to a would-be immigrant a duty of care at common law to provide correct and accurate information as to the validity of immigration documents issued at a British diplomatic post overseas when responding to an inquiry from an airline carrier concerned to avoid liability under section 1(1) of the Immigration (Carriers Liability) Act 1987?
40. The question arises in circumstances in which it must be assumed for the purposes of this appeal, insofar as it is not common ground: (i) that the information that was provided by the Home Office was incorrect and inaccurate; (ii) that that was the result of lack of care on the part of an immigration officer; (iii) that the effect of the incorrect and inaccurate information provided was that the airline decided not to carry the would-be immigrant as a passenger to the United Kingdom; (iv) that, on the basis of the information actually provided, that was a decision which the airline was entitled to take under its contract for carriage; and (v) that, as a result of that decision, the would-be immigrant suffered loss, which included loss which was not of a purely economic nature. It is common ground also that the fact that the claimant would suffer loss by reason of the provision of incorrect and inaccurate information to the airline was foreseeable.
41. The question raised on this appeal is whether the court can be certain at this preliminary stage in the action that - whatever, within the reasonable bounds of the claimant's pleaded case, the actual circumstances in which the incorrect and inaccurate information was provided might be held to be after a trial - the question of law raised in the action would be answered in the negative.
42. As Lord Browne-Wilkinson observed in Barrett v LB Islington [1999] 3 WLR 83, unless it is possible to give a certain and affirmative answer to the question whether the claim would be bound to fail, the case is not one in which it was appropriate to strike out the claim in advance of trial. Lord Browne-Wilkinson went on to point out that in an area of the law which was uncertain and developing, it could not normally be appropriate to strike out. He emphasised the importance of the principle that the development of the law should be on the basis of actual facts found at trial and not on the basis of hypothetical facts assumed (possibly wrongly) to be true on the hearing of the application to strike out. There are observations to the like effect in Lord Browne-Wilkinson's speech X (Minors) v Bedfordshire County Council [1995] 2 AC 633 at pages 741 and 741; and in the judgment of Sir Thomas Bingham, MR in E (A Minor) v Dorset County Council at page 694 in the same report.
43. In my view it is plain that the legal issue in this case can fairly be regarded as within an area of the law which is developing and as its boundaries become drawn through experience in the cases which come before the courts.
44. At a higher level of extraction the question of law can be put in this form: in what circumstances does the common law impose a duty of care on A - actionable, if breached, at the suit of B - in respect of information provided by A to C in the knowledge that C will or may act on that information to the detriment of B? That question was considered by the House of Lords in Spring v Guardian Assurance Plc [1995] 2 AC 296. A closely related question - involving conduct by A in relation to C (rather than the provision of information) but which adversely affected B - was considered shortly thereafter by the House of Lords in White v Jones [1995] 2 AC 207. To those decisions of the House of Lords, there could be added the decision of this court in Carr-Glynn v Frearsons [1998] 4 All ER 225, which was not cited to us.
45. The answer to that question turns in part, at least, on whether there is considered to be a sufficient degree of proximity between A and B; or, as I would prefer to put it, on whether, in providing the information to C, A can be said to have assumed responsibility to B for the correctness and accuracy of that information. For an analysis of the factors which may be relevant in reaching a conclusion on that point, reference should be made to the speech of Lord Browne-Wilkinson in White v Jones, in particular between page 271D and 275A, and to the speech of Lord Woolf, in Spring v Guardian Assurance at page 345A-B.
46. The judge accepted that the question whether it would be fair, just and reasonable to impose a duty could not be, or should not be, determined in the present case on the basis of hypothetical facts. But he was persuaded that the closely related question as to proximity could be answered against the claimant in advance of a trial.
47. In my view he was wrong to accept the submissions made to him on behalf of the Home Office on that latter point. This is, as it seems to me, a clear example of a case in which the court needs to have a full understanding of the actual facts in order to decide both the issue of proximity (or assumption of responsibility) and the other, and related, issue of policy - see the observations of Lord Oliver in Caparo Plc v Dickman [1990] 2 AC 605 at 633C-D to which the Master of the Rolls has referred.
48. For those reasons, and for the reasons given by the Master of the Rolls, I would allow this appeal.

Order: Appeal allowed with costs here and below. Legal Aid Assessment. Permission to appeal to House of Lords refused.