England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LEEDS COUNTY COURT
Order of HHJ Belcher

		Royal Courts of Justice Strand, London, WC2A 2LL
		10/02/2016

Lord Justice Tomlinson :

1. This appeal concerns a claim in damages for alleged negligent misstatement which failed in the court below. The Claimant says that on the basis of the Judge's primary findings of fact the claim should have succeeded, hence this appeal. The Defendant says that the claim should have failed not just for the reasons given by the Judge, which he supports, but for a number of other reasons, not all of which were argued at trial.
2. The action was tried at the Leeds County Court by Her Honour Judge Belcher. After a thirteen day trial taking place between 30 September 2013 and 28 May 2014, the Judge delivered a reserved judgment on 6 August 2014 dismissing the claim.
3. Both Mr Mohammed Abdel-Khalek, the Claimant/Appellant, and Mr Qazi Ali, the Defendant/Respondent, are consultant ophthalmic surgeons. For a period of about four months between mid-November 2006 and March 2007 they worked alongside one another at Scunthorpe General Hospital, ("SGH"), which is one of a group of hospitals operated by the North Lincolnshire and Goole NHS Trust, ("NL&G"). The Defendant had a permanent post. The Claimant was a locum. The Defendant was responsible for his own team working under his supervision of which the Claimant, as a fellow consultant albeit a locum, was not part. At that stage the Defendant had little contact with either the Claimant or his patients. After the Claimant's departure a number of his erstwhile patients were referred to the Defendant. Thereafter the Claimant worked as a locum at Goole and District Hospital, ("GDH"), also within the NL&G Group, between July 2008 and February 2009 and between September 2009 and February 2010.
4. In February 2010 the Claimant applied through an agency for the position of locum consultant ophthalmic surgeon at Doncaster and Bassetlaw Hospitals NHS Trust, ("D&B"). He provided as referees persons who had worked at GDH. The Judge found that based on references given by those persons D&B offered the Claimant the locum position.
5. Mr Subramanian Dinakaran was, in February 2010, a consultant ophthalmic surgeon at D&B. He became aware that the Claimant was due to start work in his department and that the Claimant had worked at NL&G. Mr Dinakaran was aware that the Defendant was at SGH and would have worked with the Claimant. Mr Dinakaran telephoned the Defendant to make enquiries about the Claimant. After that conversation Mr Dinakaran had concerns which he referred to Mr Peter Watson, a manager at D&B. Mr Watson then telephoned the Defendant about the Claimant. Mr Watson knew the Defendant. Mr Watson had himself been Deputy Divisional Manager for surgery at NL&G until either the end of October or the beginning of November 2006. The Defendant had been a consultant ophthalmic surgeon at SGH since May 1999.
6. As a result of these conversations Mr Watson made the decision to cancel the offer to the Claimant of the locum position. He did so because of his concerns around clinical issues that had been raised. The Claimant asserts that that decision was made in consequence of negligent misstatement made by the Defendant in the course of those two telephone conversations.
7. The Judge found that the crucial conversation was that between the Defendant and Mr Watson, since it was that conversation which led to Mr Watson's decision to withdraw the locum position previously offered to the Claimant. Accordingly the Judge made no formal findings as to what the Defendant said to Mr Dinakaran. She did however record by way of necessary background, and as part of the corpus of material in the light of which the impression made by the Defendant upon Mr Watson had to be evaluated, such parts of Mr Dinakaran's evidence as she found relevant and reliable. I should stress that the Judge did not find Mr Dinakaran an unreliable witness. He had made no contemporary note and there were aspects of the conversation about which he was unsure. In particular, he was unsure whether in certain respects information of which he became aware was imparted on this occasion by the Defendant or on a subsequent occasion by Mr Watson after he had spoken to the Defendant. I confine myself here to the account which the Judge inferentially accepted as reliable.
8. Mr Dinakaran said that the purpose of his call to the Defendant was to find out about the Claimant's abilities in order to allocate appropriate duties, rather than to look for any concerns. He did however accept that an enquiry whether there had been any such concerns may have been implicit in his approach to the Defendant. Mr Dinakaran said that the Defendant told him that there had been some complaints from patients, with some post-operative complications, some of which were still being dealt with. Mr Dinakaran recognised that surgery inevitably leads to post-operative complications on many occasions. In his mind, complications only raised concerns about the surgeon if the complications were due to negligent treatment, or where a recognised complication happens more frequently than is expected, which he said would raise an issue as to the surgeon's competence, or where the complications are not dealt with appropriately. Mr Dinakaran was concerned by the information he received and he passed it on to Mr Watson. Mr Dinakaran said that the fact that his conversation with the Defendant had been mainly about complications, with some complications still being dealt with, and the fact that there were complaints, would have been enough in itself to cause him to speak to Mr Watson. It is important to note that the Defendant made no express comment to Mr Dinakaran about the Claimant's surgical ability.
9. Mr Watson telephoned the Defendant and asked him to repeat what he had said to Mr Dinakaran concerning the Claimant's clinical competence.
10. The Judge made clear findings which are not challenged by the Claimant as to the content of the conversation between the Defendant and Mr Watson. The Judge makes her findings in terms of the impression given to Mr Watson by the Defendant. For the purposes of the appeal I need not explore the question whether those impressions were, objectively judged, reasonably to be derived from the words used by the Defendant in the context in which they were spoken, an issue which might have arisen had we had to consider the Respondent's Notice.
11. Amongst other things, the Judge found that the Defendant told Mr Watson that there were complaints from patients and complications; that one complication had gone to litigation and a second one was expected to go to litigation. The Judge further found that the Defendant gave Mr Watson the impression both that there were about half a dozen patients with complications and that the complication rate was higher than would be expected. The Judge made the obvious but telling point that there was no reason for the Defendant to raise complications with Mr Watson unless there was something out of the ordinary. Had they been complications of the type ordinarily to be expected as a result of surgical procedure and/or other clinical judgments or treatment, there would have been no reason at all to comment upon them. The Judge found [28]:

"In my judgment, in the context of the making of telephone calls seeking the views of one surgeon about another, the use of the word 'complications' by Mr Ali without any qualification inevitably implied that these were complications which should not have happened, thus calling into account the Claimant's competence in relation to the surgical procedures in question."

12. The Judge also found that it was the clinical issues which caused Mr Watson to decide to withdraw the offer of the locum position. The Judge records [29] Mr Watson's evidence that "he was concerned at the rate of complication for a relatively short period of time as a locum, and that the rate of complication was higher than would be expected". Since the Judge also finds unequivocally at [100] that the fact that the complication rate was higher than would be expected was "plainly at the heart of Mr Watson's decision to withdraw the Locum Position offer" it is clear that the Judge accepted this evidence as to the nature of his concern. It is asserted by the Claimant (skeleton argument for the appeal, paragraph 25) that there was never any doubt at trial that "the relatively short period of time" under consideration in this conversation was that between mid-November 2006 and the end of March 2007 when the Claimant and the Defendant had worked alongside one another in the same department at SGH. This is not accepted by the Defendant, but I shall assume it to be correct for the purposes of the appeal. It helps to put into context the Judge's eventual finding that it was established that there were three patients with complications in the sense that I have explained, i.e. complications indicative of a want of care or skill on the part of the Claimant. That is three patients arising out of a spell as locum at SGH lasting about four months.
13. Although denied in the Defence, it was accepted at trial that the Defendant owed a duty of care to the Claimant and that this is therefore a case in which the Defendant is potentially liable pursuant to what I might term the extended Hedley Byrne basis applied by the House of Lords in Spring v Guardian Assurance Plc [1995] 2 AC 296. In his skeleton argument prepared for the appeal Mr James Price QC, who did not appear below, flirts with the suggestion that the Defendant might seek permission to withdraw that concession, and in the Respondent's Notice the suggestion is made that the Judge did not adequately address the scope of the admitted duty of care. Again, for the purposes of the appeal I can assume in the Claimant's favour that the concession was rightly made. I will content myself by observing that it is not always sufficiently borne in mind that liability for negligent misstatement was said in Hedley Byrne to be dependent upon an assumption of responsibility, and that for Lord Devlin the type of special relationship out of which such an assumption of responsibility could be spelled must be a "relationship equivalent to contract" – see at page 530. I need however say no more on this topic.
14. Having determined what was reasonably conveyed to Mr Watson by the words used by the Defendant in the context in which they were spoken, the Judge proceeded to ask and answer three questions:-

i) Had what the Defendant said or indicated amounted to a misstatement?

ii) If so, was the Defendant negligent in making that misstatement?

iii) Did any negligent misstatement result in the offer being withdrawn?

15. The Judge's examination of the first two questions was severely hampered by three features of the trial. First, NL&G did not give the Defendant permission to access patient records for the purpose of defending himself in these proceedings. He had therefore to attempt to recollect the names of patients who had made complaints and/or suffered complications and additionally to obtain their consent to his having access to their clinical records. Second, although permission was given to both parties to adduce expert evidence on the clinical issues, neither party availed himself of that opportunity. Worse, the parties compounded that failure by inviting witnesses of fact, who appeared to be appropriately qualified, to give opinion evidence in the witness box, which was not foreshadowed in statements served before trial and which suffered from the additional defect of being given by witnesses who were not independent. In such circumstances the burden of proof not unnaturally assumed some significance. Thirdly, the parties made no attempt to disguise their obvious dislike of the other. The Judge recorded that she had disregarded the obvious animosity when reaching her conclusions, but at the same time indicated, not unnaturally, that it had not assisted her. It is perhaps indicative of these difficulties that the trial, which was concerned only with liability, lasted thirteen days.
16. It was the Claimant's case that, so far as he was aware, there had never been any complaints against him, no untoward complications and no cases having gone to litigation. It was also his case that there was no evidence that there were ever any complications, and certainly not six such cases. The Defendant for his part produced evidence relating to four patients in respect of whom he said that there were complications. The Judge rightly regarded this evidence, which is set out in great detail in her judgment, as sufficient to rebut the simple assertion that there had been no complaints from or complications suffered by the Claimant's patients, always using complications in the accepted sense of complications attributable to a want of care or skill on the part of the Claimant. Pointing out, rightly, that it was for the Claimant to discharge the burden of proving the alleged misstatements, she held that the evidential burden of showing that the patient cases relied upon did not involve complication arising through his fault or lack of competence shifted back to the Claimant. I shall have to revert to this aspect of the case as Mr Manuel Barca QC, for the Claimant, is critical of the Judge's approach.
17. After an exhaustive analysis of extensive and complex evidence the Judge concluded:

i) that it was a misstatement to say that a second case had gone or was expected to go to litigation – only one case had proceeded to litigation and the material did not justify any finding that another case was expected to go to litigation;

ii) that it was a misstatement to say that there were about half a dozen patients with complications – there were three, or at any rate only three were shown to have suffered complications;

iii) that the Claimant had failed to establish that the impression given to Mr Watson that the complication rate was higher than expected was a misstatement.

In relation to this last point the Judge said this, at [98]:-

"98. . . . Whilst my findings are such that Mr Ali can only rely on 3 cases of patient complications in support of what he said, I have no evidence at all as to whether that is a complication rate higher than would be expected. This was simply not addressed in evidence, the Claimant's case being that all the statements made and/or impressions given by the Defendant were misstatements in all respects. The Claimant sought to prove that there were no complications such that it would inevitably follow that his complication rate was not higher than would be expected. In one sense, the fact of the 3 cases of complications would justify the statement that the complication rate was higher than would be expected. That follows from my finding that it was a necessary inference, and the impression given to Mr Watson, that the complications were necessarily something other than those which necessarily arise in surgical procedures and which would not be worthy of, or require, any comment from Mr Ali. Indeed Mr Watson effectively made that point in his evidence when he said "The impression I was given by . . . Mr Ali was that the rate was higher than would be expected, as you said earlier you do not expect a complication in surgery" (Transcript 28 January 2014, 1000). In any event the Claimant has produced no evidence to address the possibility of my making findings other than that all the statements/indications given by the Defendant were misstatements."

18. One criticism which Mr Barca makes of that passage is that the Judge, he suggests, overlooks that it was the Claimant's case that there were certainly not six such cases. I do not consider that this point takes Mr Barca anywhere, but it is in any event inaccurate. It was the Claimant's pleaded case that all of the statements made and/or impressions given by the Defendant were misstatements in all respects. It was also his case that the evidence produced at trial did not establish that there were ever any complications, "and certainly not six such cases" – see [32]. The latter point is a comment upon the evidence. It does not detract from the case which the Claimant initially set out to prove. Nor in my judgment does it undermine the Judge's approach that it was for the Claimant to demonstrate that the complication rate in fact established by the evidence was not higher than would be expected. I shall revert to this point.
19. At [99] the Judge held that the two misstatements which she had found established had been made negligently by the Defendant. This conclusion too is challenged in whole or in part by the Respondent, but again for the purposes of the appeal I need not address that point.
20. Finally, at [100] under the rubric –

Did any negligent misstatement result in the offer being withdrawn?

the Judge came to the heart of her decision as follows:

"100. The Claimant cannot satisfy me on the balance of probabilities that any negligent statement resulted in the offer being withdrawn. There is no evidence from which I can properly distinguish the effect on Mr Watson's decision of the various different aspects of the statement made and which I have found were relevant to the decision to withdraw the Locum Position offer. Most significantly the Claimant has failed to prove on the balance of probabilities that the impression given to Mr Watson that the complication rate was higher than would be expected was a misstatement. This issue was plainly at the heart of Mr Watson's decision to withdraw the Locum Position offer. It follows that notwithstanding my findings that the Defendant made negligent misstatements in various respects, the Claimant fails on causation and the claim will be dismissed."

The arguments on the appeal

21. The main thrust of the appeal is that the Judge was wrong to treat as separate misstatements what was said about there having been about half a dozen patients with complications and the impression given that the complication rate was higher than would be expected. Mr Barca submits that there was no need for the Claimant to deploy expert evidence as to what would have been the rate of complications normally to be expected because properly understood no question arose as to what was meant by the statement that the rate was greater than would be expected. The thrust of the statement made by the Defendant was, in his submission, that it was because there were about half a dozen patients with complications that the rate of complication was higher than would be expected. Thus Mr Barca submits that the Judge was wrong to attempt to distinguish the effect on Mr Watson's decision of the various different aspects of the statement made. Mr Watson, submitted Mr Barca, did not himself truly seek to draw any such distinction because he did not perceive one to exist. It was because six complications in a few months of itself represented a higher than expected rate that he withdrew the offer. The Judge should thus have found that the misstatement that there were about half a dozen complications caused Mr Watson to withdraw the job offer.
22. Mr Barca had a subsidiary point which he acknowledged stands or falls with his main submission. The Judge had, he suggested, wrongly approached her analysis of the incidence of the shifting evidential burden. The Judge had, he submitted, wrongly proceeded upon the basis that the shifting evidential burden applied to one issue only, namely the Claimant's assertion that he had been the subject of no complaints and that his patients had suffered no untoward complications. Since the Claimant's fall-back position was that there were certainly not six such cases, the Judge should have found that the issue in relation to which the evidential burden had shifted to the Defendant included the assertion that there had been six such complications. Properly understood therefore it was for the Defendant to prove that the rate of complications was higher than would be expected, by showing that there were six of them. It was not for the Claimant to prove that it was a misstatement to assert that the rate of complications was higher than would be expected.

Discussion

23. I cannot accept these submissions. The Judge heard evidence from both the Defendant and Mr Watson and made clear findings as to the impression derived by the latter from what the former said to him and the context in which he said it, which impression I have assumed in the Claimant's favour was, objectively judged, reasonably to be derived from what the Defendant said. Mr Barca has shown us the transcript of the salient passages in Mr Watson's evidence. The Judge was quite clear in her finding, to which in my view she was plainly entitled to come, that the thrust of what was imparted by the Defendant to Mr Watson, which was his principal concern and which lay at the heart of his decision to withdraw the offer, was that the rate of complications for a relatively short period of time as a locum was higher than would be expected. It is plain that there was imprecision around the number of cases about which the Defendant was speaking. Mr Watson's evidence, which the Judge accepted, was that the Defendant gave the impression that there were about six such cases. I do not regard it as realistic to regard these two statements or impressions as indivisible, and plainly neither did the Judge. Mr Watson's evidence was that he was told that there was a small number of complications, he got the impression approximately half a dozen cases, of which one was going to litigation and one was probably going to litigation. It is telling that Mr Watson did not suggest in evidence, nor was it suggested to him, that it was only because there were six such cases, or about six such cases, that he was concerned. The point that registered with Mr Watson was that the rate was higher than would be expected. The imprecise figure of about or around half a dozen was the figure mentioned, but Mr Watson's understanding of what he had been told was plainly not that the rate was higher than would be expected because there were about six cases, rather that the rate was higher than would be expected and that the Defendant thought that there were in fact about six such cases.
24. I find it rather difficult to imagine that it could possibly have been Mr Watson's thought process that it was only because there were about six patients with complications that he was concerned. As Mr Watson recognised, one expects surgery to give rise to inevitable complications, but what he and the Defendant were discussing was not inevitable complications but complications which ought not to have occurred, because they were complications of a type indicative that the surgery had been carried out by the Claimant without due care or without due skill. The real point is that the rate was greater than would be expected, and I find it fanciful to believe that Mr Watson could only have been concerned because there were about six such cases, when one would not ordinarily expect that a consultant surgeon would ever act without due care or skill. Even allowing for the very best and most careful sometimes to have an aberration, the suggestion that three such cases in a relatively short period of time, four months, would not be regarded as more than would ordinarily be expected of a competent and careful surgeon is I think quite unreal. That is I think what the Judge meant when she said, [98], that "in one sense, the fact of the three cases of complications would justify the statement that the complication rate was higher than would be expected". In any event the Judge was in my view quite entitled and indeed obviously correct to approach the case upon the basis that the real thrust of what the Defendant imparted to Mr Watson was that the complication rate was higher than would be expected. It was not of concern to Mr Watson whether that had manifested itself in six cases, or in five or in four or in three. A trusted colleague was telling him that the rate was higher than would be expected, and that was a matter of obvious concern.
25. It follows that I reject also the argument that the Judge wrongly approached the question upon whom lay the evidential burden. The burden of proving that it was incorrect to say that the rate of complications was higher than would be expected was and remained throughout on the Claimant. By showing that there were three such cases in four months rather than about six the Claimant did not discharge that burden.
26. The Judge's conclusion was that there were two negligent misstatements by the Defendant, first that there had been about six patients with complications and second that two of those cases had gone or were expected to go to litigation. However the Judge concluded that the Claimant could not show that but for the making of those statements the job offer would not have been withdrawn. That is because the critical factor is that Mr Watson was given the impression that the complication rate was higher than would be expected, and that is why he withdrew the job offer. The Claimant did not demonstrate that that was a wrong impression. The Judge's approach was in my view impeccable.
27. At the conclusion of Mr Barca's argument for the Claimant we announced that the appeal would be dismissed. These are my reasons for joining in that decision.

Lord Justice Sales :

28. I agree.