Case Nos.: CO/4503/2000 and CO/4727/00
Neutral Citation Number: [2001] EWHC Admin 429  
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
ADMINISTRATIVE COURT 
Royal Courts of Justice
Strand, London, WC2A 2LL

Friday 15th June 2001

B e f o r e:

THE HONOURABLE MR JUSTICE STANLEY BURNTON

THE QUEEN on the application of
	(1)  Elizabeth Heather		
	(2)  Martin Ward		
	(3)  Hilary Callin	Claimants	
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	The Leonard Cheshire Foundation	First Defendant	
	- and -		
	H. M. Attorney General	Second Defendant	
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(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 190 Fleet Street
London EC4A 2AG
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Official Shorthand Writers to the Court)
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Richard Gordon QC, Ian Wise and Alan MacLean (instructed by Coningsbys) for the Claimants)
James Goudie QC and Monica Carrs-Frisk QC(instructed by Trowers & Hamlins for the First Defendant)
W. H. Henderson (instructed by the Treasury Solicitor) for H.M. Attorney General

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Judgment
As Approved by the Court
Crown Copyright ©

Mr Justice Stanley Burnton: 

Introduction 
1.	The Defendant, the Leonard Cheshire Foundation, is the well-known charity, established by Leonard Cheshire VC.  Lord Denning was one of the original committee members.  It is the United Kingdom’s leading voluntary sector provider of care and support services for the disabled.  I shall refer to it as “Leonard Cheshire”.  Its first and largest home is Le Court Cheshire Home, Greatham, near Lis, in Hampshire (“Le Court”).  
2.	Le Court has about 42 long-stay residents.  They include the three Claimants, who have lived there for periods of 17 years and more.  The majority of the residents at the home (including the Claimants) have been placed there, and their places are funded, either by the social services department of their local authority, or by their health authority.  In either case, their placement and funding results from the exercise of statutory powers by the local authority or the health authority.
3.	On 27 September 2000, the Trustees of Leonard Cheshire decided to close Le Court in its present form.  They approved the development of 3 or 4 smaller community-based homes to be located in the surrounding towns, and the creation at Le Court itself of a 16-bed high-dependency unit.  The residents who could not be kept at Le Court would be relocated into the community-based units.  That decision was reconsidered by the Trustees on 7 February 2001 and affirmed.  
4.	By these proceedings the Claimants seek judicial review of those decisions.  They contend that Leonard Cheshire, in relation to them, exercises functions of a public nature within the meaning of section 6(3)(b) of the Human Rights Act 1998; that it is accordingly a public authority within the meaning of section 6; that by virtue of section 6(1) it owed them a duty to comply with the Articles of the European Convention on Human Rights set out in Schedule 1 to the Act; and that the Trustees’ decision to close Le Court was made in contravention of Article 8, which confers on them the right to respect for their home, which is Le Court.  They allege principally that the Trustees failed to take into account the promises made to them that Le Court would be their “home for life”, promises which created substantive legitimate expectations on the part of residents; that the Trustees made their decisions without obtaining individual assessments of the Claimants’ needs; that the Trustees failed to take account of, or ignored, Leonard Cheshire’s own express policy of providing for its residents a “home for life” – that Le Court should be their home for as long as a resident wants or is able to continue to live there; and that the decisions of the Trustees were in the circumstances irrational.  On these grounds, the Claimants seek an order to quash the decisions in question.
5.	In addition, on the basis that Leonard Cheshire, exercises, in relation to the Claimants, functions of a public nature within the meaning of section 6(3)(b) of the Human Rights Act, the Claimants contend that the decisions of the Trustees were made “in relation to the exercise of a public function” within the meaning of Part 54.1 of the CPR, and that they are therefore amenable to judicial review.
6.	Leonard Cheshire denies that it exercises any public function within the meaning of the Human Rights Act or Part 54 of the CPR.  It contends that its functions are wholly private.  It therefore denies that it is amenable to judicial review, and it denies being under the substantive obligations contended for by the Claimants, which are only applicable to public authorities.  It also denies the substance of the Claimants’ allegations.
7.	H.M. Attorney General intervened in these proceedings and was made a defendant.  He too submits that Leonard Cheshire is not a public authority for the purposes of the Human Rights Act and Part 54 of the CPR.  In addition, he contends that the present proceedings are charity proceedings within the meaning of section 33 of the Charities Act; that the Claimants have not obtained the authority of the Charity Commissioners or leave of a Judge of the Chancery Division to take these proceedings as required by section 33; and that these proceedings must therefore be struck out or stayed pending the Claimants’ applications for the Commissioners’ order authorising these proceedings or the leave of a Chancery Judge.  
8.	The Claimants dispute that these proceedings are charity proceedings.  They submit that charity proceedings do not include proceedings by way of judicial review, and certainly do not include proceedings that have as their purpose the enforcement of Convention rights.
9.	I decided to hear and to decide the jurisdictional objections of Leonard Cheshire and of the Attorney General as preliminary issues.  This was particularly appropriate since, if the Attorney General’s submission was correct, and these are charity proceedings, the Court was precluded from entertaining them.  However, during the hearing before me, without prejudice to their submissions, the Claimants applied to the Charity Commissioners for their authority to continue these proceedings; and the Commissioners subsequently did give their authority.  The question whether these proceedings are charity proceedings became largely academic.  Nonetheless, since the question was fully argued and may be of general importance, I have addressed it in my judgment.
10.	I did not consider the evidence on the issues of substance, or hear argument on them, except in so far as it was necessary to do so in order to understand and to determine the jurisdictional issues.  This did involve some consideration of the obligations that the Claimants allege arise from the fact that Leonard Cheshire is, in relation to them, a public authority, so that I could appreciate the consequences of a decision that Leonard Cheshire is, or is not, a public authority.  It did not involve any investigation or consideration of the question whether Leonard Cheshire had in any way failed to fulfil those obligations.
11.	On the day after the draft of my judgment on the jurisdictional issues in this case was sent to counsel for the parties, counsel brought to my attention the judgment of the Court of Appeal in Donoghue v Poplar Housing and Regeneration Community Association Ltd [2001] EWCA Civ 595, given on 27 April 2001.  In that case a housing association was held to be a public authority for the purposes of section 6 of the Human Rights Act.  The defendant (to which I shall refer as “Poplar”) was, like Leonard Cheshire a charity, and like Leonard Cheshire provided accommodation under arrangements with a local authority by which the local authority fulfilled its statutory duties.  Like Poplar, Leonard Cheshire receives moneys from public sources; like Poplar, Leonard Cheshire is regulated under statute.  Because of the obvious relevance and importance of the decision in Donoghue I decided to reconsider my judgment.  The parties subsequently presented their written submissions on the effect of the judgment in Donoghue on my draft judgment and my conclusions.  For that purpose, I permitted counsel to discuss my draft judgment with their clients.  In view of the costs and the delay that would be involved, the comprehensiveness of the written submissions, and the prospects of an appeal to the Court of Appeal from my decision in any event, I decided not to invite further oral argument.  I note that the Court of Appeal itself adopted a similar course in Donoghue itself: see paragraph 31 of the judgment.
12.	In the event, having considered the judgment of the Court of Appeal in Donoghue and the parties’ written submissions, I have concluded that my original decision was correct.  Rather than rewrite my judgment in the light of that decision, I have retained most of the text of my draft judgment and made reference to the judgment of the Court of Appeal where appropriate.  This has the disadvantage that my judgment is now unnecessarily long, and even longer than it was originally.  However, if I had started afresh, my original reasoning would have been lost.  I hope that in general it will be obvious which parts of my judgment are new.  
13.	This is my judgment on the jurisdictional issues.
The issues
14.	There are two principal issues for decision:
(i)	In making its decisions referred to above, was Leonard Cheshire acting as a public authority in relation to the Claimants?
(ii)	Are these proceedings charity proceedings within the meaning of section 33 of the Charities Act?
15.	The Claimants do not suggest that Leonard Cheshire is a public authority for all purposes.  They accept that it is not a public authority in relation to its privately-funded residents at Le Court.  They contend that it is a hybrid authority, a person “certain of whose functions are of a public nature” within section 6(3)(b) of the Human Rights Act.  Issue (i) above is worded as it is in order to include the issue raised by Leonard Cheshire under section 6(5): it contends that, even if Leonard Cheshire is a public authority, the decision to redevelop Le Court was an act of a private nature.
16.	The Attorney General originally took the point that the decision to redevelop Le Court was taken a few days before the coming into force of the Human Rights Act.  Since the Claimants can now deploy their Human Rights arguments against the confirmation of that decision on 7 February 2001, which post-dates the coming into force of the Act, that point has become wholly academic, as Mr Henderson recognised.  I have therefore ignored the fact that the Trustees’ original decision pre-dated the coming into force of the Act.
17.	The principal issue between the parties (in which I include the Attorney General) is whether Leonard Cheshire is for any relevant purpose a public authority.  It is of obvious importance and of no little difficulty.  I was taken to the statement of Moses J in R v Servite Housing Association and Wandsworth LBC, ex p Goldsmith and Chatting [2001] LGR 55 that this involves “one of the most significant issues in public law today”, an assessment confirmed by the Court of Appeal in Donoghue.
18.	I should mention that all parties eschewed any argument based on any so-called “horizontal” application of the Convention or the Human Rights Act.  Their approach received the endorsement of the Court of Appeal in paragraph 29 of the judgment in Donoghue.
The significance of issue (i)
19.	The decision on the first jurisdictional issue does not, of course, merely go to jurisdiction.  It goes also to the duties owed by Leonard Cheshire in making its decisions and to the standing of the Claimants to challenge them.  It is only if Leonard Cheshire is a public authority in relation to them that it could have owed them a duty under section 6(1) of the Human Rights Act to comply with the Convention; and it is only if it is a public authority that it could have owed the duties imposed by public law on such authorities.  Apart from the charities jurisdiction of the High Court, if Leonard Cheshire is not, so far as they are concerned, a public authority, the Claimants would have no status to challenge, and no grounds to challenge, the decisions of the Trustees that they seek to impugn.
20.	If the Claimants’ submissions on issue (i) are not well-founded, as Moses J pointed out in Servite, the increased privatisation of formerly governmental functions may involve the loss of judicial review of those functions and of the decisions made when exercising them.  I comment on this below.
The parties, their relationships and the statutory framework
21.	Elizabeth Heather and Hilary Callin are in receipt of social care.  Miss Heather suffers from Friedrics Ataxia.  She has difficulty in speaking or moving her limbs or maintaining focus.  She has lived at Le Court for 18 years.  Martin Ward (aged 76) has multiple sclerosis.  He has been a resident at Le Court for 17 years.  Miss Callin is brain-damaged as a result of a road traffic accident in 1971: she cannot walk, and has epilepsy.  She, too, has lived at Le Court for 18 years.
22.	Leonard Cheshire is a company limited by guarantee registered under the Companies Act 1985.  It was registered as a charity on 1 January 1961.  Somewhat confusingly, its directors are called Trustees.  Paragraph 3 of its Memorandum of Association is as follows:
“Leonard Cheshire’s objects are to relieve the consequences of physical and/or mental disability by the provision, in the United Kingdom and overseas, of accommodation, services and support for the spiritual, social, physical and/or mental wellbeing of disabled people, by such means as are charitable, whatever their race, nationality, creed, sex or age.”
23.	Paragraph 4 includes the following provisions:
4.   In furtherance of its objects Leonard Cheshire may exercise the following powers;
A.   To provide, either alone or in conjunction with statutory or non statutory bodies, services to disabled People, including the power to make available to disabled people funds donated to Leonard Cheshire for the purchase by disabled people of equipment or other assistance.
B.   To promote, conduct and engage in research and development work intended to be of benefit to disabled people.
….
E.   To enter into agreements pursuant to which Leonard Cheshire may provide services to or for the benefit of disabled people, including the power for Leonard Cheshire to charge for the provision of such services.
……
H.   To purchase, take on lease or in exchange, hire, rent or otherwise acquire any real or personal property and any rights or privileges which Leonard Cheshire may consider necessary or appropriate for the promotion of its objects and to construct, maintain and alter any building or construction as may be  necessary or convenient for the work of Leonard Cheshire, and to enter into authorised guarantee agreements (as defined by the Landlord and Tenant (Covenants) Act 1995).
24.	The activities of Leonard Cheshire extend beyond the running of its residential homes.  Its activities include activities that are wholly independent of any public body.
25.	As mentioned above, most of the residents at Le Court are there as a result of agreements made between funding statutory authorities and Leonard Cheshire.  38 of the 43 residents at Le Court are funded by purchasing statutory authorities.  Nationally, only 14 per cent of Leonard Cheshire’s places are privately funded.
26.	The fees paid by local and health authorities do not meet all of the costs of the care provided at Le Court.  The balance is met from Leonard Cheshire’s own funds, derived from voluntary income.
27.	Surrey County Council is Miss Heather’s and Miss Callin’s placing authority.  Their social care placements are funded by their welfare benefits and by the County Council, and have been arranged pursuant to sections 21 and 26 of the National Assistance Act 1948.  Section 21(1) provides:
“Subject to and in accordance with the provisions of this Part of this Act, a local authority may with the approval of the Secretary of State, and to such extent as he may direct shall, make arrangements for providing (a) residential accommodation for persons aged 18 or over who by reason of age, illness, disability or any other circumstances are in need of care and attention which is not otherwise available to them”.
28.	As a result of directions by the Secretary of State, once a person’s need of care and attention that is not otherwise available to him or her is established, the local authority must make arrangements pursuant to section 21(1): see R v Kensington BC, ex parte Kujtim [1999] 4 All ER 161, at 167j.  In that event, section 26 becomes relevant.  So far as material, it provides:
“(1)	Subject to sub-sections (1A) and (1B) below, arrangements under section 21 of this Act may include arrangements made with a voluntary organisation or with any other person who is not a local authority where (a) that organisation or person manages premises which provide for reward accommodation falling within sub-section ... of that section, and (b) the arrangements are for the provision of such accommodation in those premises.”  

“ (1A)	Subject to sub-section (1B) below, arrangements made with any voluntary organisation or other person by virtue of this section must, if they are for the provision of residential accommodation with both board and personal care for such persons as are mentioned in section 1(1) of the Registered Homes Act 1984 (requirement of registration), be arrangements for the provision of such accommodation in a residential care home which is managed by the organisation or person in question, being such a home in respect of which that organisation or persons (a) is registered under Part 1 of that Act, or (b) is not required to be so registered by virtue of section 1(4)(a) or (b) of that Act (certain small homes) or by virtue of the home being managed or provided by an exempt body; and for this purpose “personal care” and “residential care home” have the same meaning as in that Part of that Act.”
...
  “(2)	Any arrangements made by virtue of this section shall provide for the making by the local authority to the other party thereto of payments in respect of the accommodation provided at such rates as may be determined by or under the arrangements and subject to sub-section (3A) below the local authority shall recover from each person for whom accommodation is provided under the arrangements the amount of the refund which he is liable to make in accordance with the following provisions of this section.”
Reference should also be made to section 47 of the National Health Service and Community Care Act 1990, but it is unnecessary to set it out.
29.	Miss Heather’s and Miss Callin’s placements have been arranged pursuant to section 26.  It can be seen that section 26 requires that Le Court be registered under the Registered Homes Act 1984 or be exempt from registration.  In fact Le Court enjoys dual registration under the Residential Homes Act 1984 as both a nursing home and a residential care home.
30.	I was told that since the decision of the House of Lords in R v Wandsworth LBC, ex parte Beckwith [1996] 1 WLR 60, local authorities increasingly fulfil their duties under section 21 by making arrangements under section 26 for others to provide accommodation, rather than by providing accommodation themselves.  This trend has increased the practical importance of the decision in the present case.
31.	Martin Ward’s placement is funded by South West Hampshire Health Authority.  The National Health Service Act 1977 sets out general duties on the Secretary of State for Health in respect of the provision of a comprehensive health service: see, especially sections 1 and 3.  Section 3(1) of the 1977 Act stipulates that ‘nursing services’ are a health service.  It provides:
“It is the Secretary of State’s duty to provide throughout England and Wales, to such extent as he considers necessary to meet all reasonable requirements” -
	(a)	hospital accommodation ...
	(c)	medical, dental, nursing and ambulance services 	...

32.	These duties have been delegated to health authorities.  Health authorities are statutorily responsible for the purchase and, thereby, ensuring the provision of ‘health’ services.  They are not responsible for the purchase and/or provision of ‘community care services’ (social care), which is the statutory remit of social services departments of local authorities under section 21 ff. of the National Assistance Act.
33.	National Health Service Trusts are the product of the National Health Service and Community Care Act 1990.  Under the legislative scheme Trusts become the providers of health care at or from hospitals formerly the responsibility of the health authority: see, especially, section 5 of the 1990 Act.  Health authorities are the purchasers of such services and remain responsible for purchasing and/or providing other health care services.
34.	So far as funded residents of Le Court are concerned, there is a triangular relationship between Leonard Cheshire, the placing/funding statutory authority and the resident.  In the exercise of its statutory powers, the authority enters into a funding agreement with Leonard Cheshire, and pays agreed sums pursuant to that agreement, and Leonard Cheshire enters into a licence agreement with the resident pursuant to which it provides residence, care and where appropriate treatment.  The relationship between the funding/placing authority and the resident appears to be governed solely by public law.
35.	For present purposes, I can treat the arrangements relating to Miss Heather as typical.  Before she was accepted as a long-term resident of Le Court, she lived there for an 8-week trial period.  The object of the trial was to see whether she would be accepted by existing residents to join the community, and presumably also for her to decide that she wanted to live there.
36.	As is often the case in respect of long-term residents at Le Court, there appears to be no written agreement relating to her residence between Surrey County Council, as her placing/funding authority, and Leonard Cheshire.  It is not disputed that there is a contractual agreement between them.  That agreement is presumably to be implied from the circumstances and their acts when it was concluded, subject to any subsequent variation.
37.	There is a written licence agreement between Miss Heather and Leonard Cheshire.  Clause 2 provides:
“The Management Committee will, subject to Clause 13, provide adequate furnished accommodation and board for as long as the Resident wishes”, …..
Clause 13 entitles the Management Committee to terminate the agreement if the condition of the resident deteriorates to a sufficient extent, or on grounds of misbehaviour or persistent and unreasonable failure to pay agreed charges.  There is no express provision of the Agreement entitling Leonard Cheshire to terminate it at its discretion by notice or on redevelopment of Le Court.
38.	So far as I am aware, neither Surrey County Council nor South West Hampshire Health Authority has challenged the decision of Leonard Cheshire to redevelop Le Court.
Judicial review: the submissions of the parties
39.	The Claimants submitted that Leonard Cheshire’s exercise of public functions in relation to persons such as the Claimants is to be derived principally from the following factors:
(i)		the presence of State funding; 
(ii)	stringent State regulation in the form of registration requirements under the Registered Homes Act, 1984;
(iii)	the fact that if a ‘private’ provider were not undertaking the function of managing the home, this would, under the statutory scheme, have to be undertaken by a State authority; 
(iv)	if the functions were undertaken by a local authority or health authority they would be held accountable by the standards of public law for any relevant home for life promises and for the defaults alleged against Leonard Cheshire in the present case; 
(v)	there is, for that reason, a gap in public law protection for persons in the Claimants’ position if the same public law standards do not attach to Leonard Cheshire.
40.	Leonard Cheshire and HM Attorney General do not dispute the matters relied upon by the Claimants and summarised in sub-paragraphs (i) to (iv) above.  However, they submit that neither individually nor cumulatively do these matters establish that Leonard Cheshire exercises any public function in relation to the Claimants.  In addition, as mentioned above, Leonard Cheshire submits that even if it does exercise a public function, the nature of its decision to redevelop Le Court was private act within the meaning of section 6(5) of the Human Rights Act.
41.	The Claimants submitted that the decision of Moses J in Servite was clearly wrong, and should not be followed.  In the alternative, they submitted that the law has been changed by the Human Rights Act, which in section 6 has replaced the previous criteria for the application of judicial review with a purely functional test, and so far as jurisdiction is concerned by the similar wording of Part 54 of the CPR.  These propositions were disputed by the Defendants.
42.	I can conveniently consider first the law immediately before the coming into force of the Human Rights Act and then the effect of the Human Rights Act and Part 54 of the CPR.
The Law before, and apart from, the Human Rights Act
43.	I can take this subject relatively shortly, given that it was comprehensively reviewed by Moses J in Servite, and summarised in Donoghue.
44.	Until the decision of the Court of Appeal in Datafin [1987] QB 815, judicial review had been confined to decisions made by bodies exercising governmental authority, either under statute or under the Royal Prerogative (see R v Criminal Injuries Compensation Board, ex parte Lain [1967] 2 QB 864).  In Datafin, for the first time a body exercising authority under neither statute nor the Prerogative was held amenable to judicial review at the instance of a party affected by its decisions.  The body in question in that case was, of course, the Take-over Panel.  It, and the subsequent decision of the Court of Appeal in R v The Disciplinary Committee of the Jockey Club, ex p. Aga Khan [1993] 1 WLR 909, are landmark decisions.  As a result of the decision of the Court of Appeal in Donoghue it is unnecessary to set out any part of the judgments in Datafin, but I refer to that of Lord Donaldson MR at 838E to 839A, to Lloyd LJ at 847A to D, and at 849B to E, and to the summary of Nicholls LJ at 852C to D.
45.	Any thoughts that the decision in Datafin meant that all bodies exercising regulatory functions under systems of so-called self-regulation were thenceforth amenable to judicial review were dispelled by the decision of the Court of Appeal in the Aga Khan case.  Datafin was explained by Sir Thomas Bingham MR at 921 as follows:
“The effect of this decision was to extend judicial review to a body whose birth and constitution owed nothing to any exercise of governmental power but which had been woven into the fabric of public regulation in the field of take-overs and mergers.”
I refer also to pages 923F to 924E of his judgment, and to the judgment of Hoffman LJ at 932C to 933H.
46.	These authorities, and the subsequent decisions of Dyson J in R v Governors of Haberdashers’ Aske’s Hatcham College Trust, ex p T [1995] ELR 350 and in R v Cobham Hall School, ex parte S [1998] ELR 389, and of Richards J in R v Muntham House School, ex p R [2000] LGR 255, were considered by Moses J in Servite.  In that case a charitable housing association was the provider of residential accommodation to disabled persons in need of residential care pursuant to arrangements made by a local authority.  Apart from the nature of the provider, in relation to the questions of public law obligations and amenability to judicial review, the facts of that case were indistinguishable from the present.  In that case too the provider of accommodation and services for the disabled had decided to close its home.  Residents at the home sought to challenge that decision by judicial review on public law grounds.  Moses J held that the housing association was not amenable to judicial review.  He held:
(i)	That the housing association was not acting as the local authority’s agent in providing community care services.  Arrangements made by a local authority with third parties under section 26 of the 1948 Act, as amended, result in the local authority discharging its obligations under section 21.  Such arrangements do not constitute the third parties as agents of the local authority for the performance of their section 21 duties.
(ii)	That there was not the statutory underpinning or statutory penetration of the housing association’s functions which would result in its being amenable to judicial review.
(iii)	The relationship between the local authority and the housing association was purely commercial.  The source of the housing association’s power was solely contractual, and this was inconsistent with a public law jurisdiction.
(iv)	Accordingly “in providing residential accommodation … Servite (the housing association) was not performing a public function and is not under any public law duty to the applicants”: page 84g-h.  The Applicants’ remedy, if any, lay in private law: page 81d.
47.	I so entirely agree with Moses J’s analysis of the authorities and his conclusions that it is unnecessary for me to comment on them.  The principal submission made to me by Mr Gordon (who had appeared in Servite on behalf of the Applicants) was that Moses J failed to appreciate that since Datafin the test for judicial review has been functional, and had become independent of any requirement as to the source of the power exercised by the body against which judicial review was sought.  This submission failed fully to take into account the narrow scope of the decision in Datafin and the judgments of the Court of Appeal in the Aga Khan case.  In Donoghue too, the functions of Poplar were held to be public because they were so enmeshed in the activities of a local authority: see paragraphs 65(v) and 66 of the judgment.  It follows that function alone is an insufficient test of a public authority.
48.	My comments on the Claimants’ submissions summarised in paragraph [39] above are as follows:
(i)	“The presence of State funding does not in my judgment indicate that a body exercises public functions, whether the funding is by grant or by payment for goods or services supplied pursuant to contract: c.f.  Peabody Housing Association Ltd v Green [1979] P&CR 644, on which I comment below, at 654 (Megaw LJ), 660 (Roskill LJ) and 663 (Browne LJ).  Bodies such as fringe theatres often benefit from State funding by way of grants.  This does not mean that they are public authorities.  Where funding is by payment pursuant to contract, the inference of a public function is even weaker.  Contracting by public authorities cannot make public authorities of the otherwise private provider of services or goods.  It is only if there is a true delegation or sharing of functions that this may occur; and true delegation or sharing, to a body which but for such delegation or sharing would not be a public authority, is a rarity, if it occurs at all, and where the original function is exercised pursuant to statute, requires statutory authority.  The only example of it I was given was paragraph 13 of Schedule 2 to the National Health Service and Community Care Act 1990.  The wording of that provision differs significantly from that of section 26 of the National Assistance Act 1948 as amended.”  
(ii)	State regulation if anything points against the body regulated being a public authority.  Increased privatisation has led to increased regulation, because of the need for activities that have passed from the public sector to the private sector to be subject to a measure of public control.  It is the regulator, not the regulated, who exercises a public function.  On this, see paragraph 65(v) of the judgment in Donoghue.
(iii)	The origin of the criterion that if the body in question were not exercising its function, the government would step in, is, I believe, the judgment of Simon Brown J in R v Chief Rabbi, ex p Wachmann [1992] 1 WLR 1036, where the learned Judge referred (at page 1041) to the applicability of judicial review in cases where, if there were no self-regulatory body, “Parliament would almost inevitably intervene to control the activity in question”.  That consideration was not the only basis for the decision in that case.  The difficulty with this criterion is that the proper ambit of government intervention is a matter of political controversy at any time, and a matter on which opinions change from time to time.  It may be difficult for politicians to predict what legislation will be enacted; it is inappropriate for the Court to seek to make what may be a political prediction or judgment.  The requirement of inevitability does not remove the political element from the prediction.  Where statute has already conferred regulatory or other powers on a non-governmental body, or involved the body in a statutory framework, the “if the body did not exist Parliament would intervene” test may seem less political.  But in such cases judicial review may well be available on other grounds: in which case the test of inevitable Parliamentary intervention is unnecessary, and Occam’s razor should be applied.  I also point out that in the Aga Khan case, Sir Thomas Bingham MR at page 923 of his judgment accepted that “if the Jockey Club did not regulate this activity the government would probably be driven to create a public body to do so”.  Nonetheless, the Jockey Club was held not to be amenable to judicial review.
(iv)	It does not follow from the proposition that public authorities’ activities are governed by public law that all bodies carrying on some of those activities are subject to public law.  This is the fallacy of the undistributed middle.  It is only if the activity itself involves a public function that public law applies.  On this see too paragraph 65(iv) of the judgment in Donoghue.
49.	With regard to sub-paragraph (iii) above, Mr Gordon avoided the uncertainties of political prediction by confining the criterion to circumstances in which existing legislation requires a public authority to exercise a function if it is not exercised by the institution whose status is in question, here Leonard Cheshire.  To take the cases of Miss Heather and Miss Callin, if Surrey County Council had not arranged with Leonard Cheshire for it to provide community care for them, it would be required to do so by section 21 of the National Assistance Act as amended and the directions given by the Secretary of State.  Again, however, I do not think that this carries the argument for the Claimants any further forward.  Parliament has permitted local authorities to provide mandatory services either themselves or by contracting with third parties.  This does not of itself make the third parties public authorities.  It does not of itself mean that the third parties exercise public functions.  The third parties are simply contractors to the local authorities.  Were it otherwise, proprietors of bed-and-breakfast homes who provide accommodation pursuant to arrangements with local authorities would be public authorities, as would contractors building roads for central government, or repairing roads for local government, or building homes for local authorities who are housing authorities.  I add that the preceding sentences of this paragraph are consistent with the judgment of the Court of Appeal in Donoghue: see paragraphs 58 to 60.
50.	In R v. Cobham Hall School, ex p. S, Dyson J cited with approval the following passage from De Smith, Woolf and Jowell, Judicial Review of Administrative Action, at paragraph 3-031:
“ ... not all the activities of private bodies (such as private companies) are subject only to private law.   For example, the activities of a private body (such as a recently privatised company) may be governed by the standards of public law when its decisions are subject to duties conferred by statute or when, by virtue of the function it is performing, or possibly its dominant position in the market, it is under an implied duty to act in the public interest.  A private company selected to run a prison, for example, although motivated by considerations of commercial profit, should be regarded, at least in relation to some of its activities, as subject to public law because of the nature of the function it is performing.  This is because the prisoners, for whose custody and care it is responsible, are in the prison in consequence of an order of the court, and the purpose and nature of their detention is a matter of public concern and interest.”
51.	Mr Gordon relied on this passage, and likened the activities of Leonard Cheshire in running Le Court to those of a private company running a prison.  However, the analogy is inexact, and the comparison if anything emphasises the differences between Leonard Cheshire and a body exercising public activities.  All of the inmates of a prison are there under state compulsion, and none by choice.  Sections 84 to 88 of the Criminal Justice Act 1991, as substituted by the Criminal Justice and Public Order Act 1994, confer important statutory obligations and powers on those who run privatised prisons, and special powers of control and intervention on the Home Secretary, which do not have an equivalent in the case of registered homes.  
52.	Mr Goudie relied on Peabody Housing Association Ltd v Green, to which I referred above.  The plaintiff in that case was a body corporate registered under the Industrial and Provident Societies Act 1965 and a housing association registered under the Housing Act 1974.  It received government subsidies made available to registered housing associations under that Act.  It served notice to quit on the tenants of one of its flats and sought an order for possession.  The defendants sought to defend the possession proceedings by impugning the decision to serve notice to quit on grounds appropriate to a body subject to public law, such as a failure to take into account relevant considerations, and on the ground that service of the notice to quit was ultra vires the plaintiff.  The County Court Judge struck out the defence as disclosing no reasonable defence.  In the Court of Appeal, the defendants submitted that it was arguable that the plaintiff had committed an abuse of statutory power.  The Court of Appeal affirmed the order of the County Court Judge, and held that neither the fact of receipt of government moneys nor registration as a housing association meant that the plaintiff was exercising any statutory power; and that no public law defence was therefore available to the defendants.  Of course, the question whether a body exercises a statutory power is not necessarily the same as the question whether it exercises a public function; and the judgment of the Court of Appeal substantially preceded Datafin, which extended judicial review to a body that did not exercise any statutory power.  In Donoghue, the Court of Appeal referred to Peabody Housing Association Ltd v Green as having been cited to it (at paragraph 64(f)), but did not expressly rely or comment on it at all.  Taking those matters into account, I nonetheless consider that the judgments in Peabody support the conclusions I have reached.
53.	Conversely, I do not accept Mr Goudie’s submission that, in the case of a hybrid authority, a contractual relationship, or powers derived from contract, are necessarily inconsistent with public duties and amenability to judicial review.  It is certainly the case that contractual relationships and public functions go hand in hand in the case of paradigm public authorities, such as local authorities: see, for example, Wandsworth BC v Winder [1985] AC 461.  I do not see why the same may not be the case where a body has some private and some governmental functions.  Just as there is no single criterion to tell us that a body is governed by public law, so, I suspect, there is no single factor that is inconsistent with its being so governed.
54.	The “gap in public law protection” to which the Claimants refer was the subject of comment by Moses J in Servite.  It is not of course a criterion for deciding that an institution is a public authority, and Mr Gordon did not suggest it is.  It may be a reason for the Courts to extend the ambit of judicial review, but that is something else.  I comment on it below.  
55.	Nonetheless, the matters referred to in paragraph [39] above do not either individually or collectively lead to the conclusion that at common law Leonard Cheshire owed administrative law obligations or was amenable to judicial review.
56.	The Claimants therefore failed to persuade me that the decision of Moses J in Servite was wrong, let alone that it was clearly wrong.  Furthermore, in my view, if the Court of Appeal in Donoghue had considered that Servite had been wrongly decided, they would have so stated.
57.	In the course of his judgment in Servite, Moses J expressed regret that the authorities did not enable him to hold that the housing association in Servite was amenable to judicial review proceedings.  However, at 83g he said:
“Once the Human Rights Act has come into force, it may be, and I put it no higher, that the courts will have to reconsider the obligations of a provider of a home by a private person under arrangements made with a public body.”
58.	I do now have to reconsider those obligations in the light of that Act.  However, I point out that in Servite, no point was raised before Moses J that the proceedings before him were charity proceedings.
The Law following the coming into force of the Human Rights Act 
59.	In Datafin, Lord Donaldson MR warned against the “fatal error” of seeking any one criterion for amenability to judicial review.  Certainly until 2 October 2000, when the Human Rights Act came into force, the lawyers’ search for a single criterion, or for an exhaustive definition of bodies owing public law duties and amenable to judicial review, was like the alchemists’ search for the philosopher’s stone.
60.	Mr Gordon’s principal submission was that the Act had replaced the former complexity and uncertainty of the law by enacting a single test: that of function.  The test, he submitted, is now entirely functional, and if the nature of the function called into question is public, then irrespective of the source or nature of the power being exercised, the body exercising that function is a public body for the purposes of section 6.
61.	The strength of Mr Gordon’s submissions lies in the wording of section 6 of the Act, which certainly appears to lay down a functional test.  The immediately relevant provisions of the Act are in section 6:
(1)	It is unlawful for a public authority to act in a way which is incompatible with a Convention right.
(2)	….
(3)	In this section “public authority” includes –
(a)	…
(b) 	any person certain of whose functions are functions of a public nature ... 
(5) 	In relation to a particular act, a person is not a public authority by virtue only of subsection (3)(b) if the nature of the act is private.
62.	Mr Gordon submitted that, quite apart from section 3 of the Act, it is important when construing a constitutional provision such as the Human Rights Act to give it a generous and purposive construction, because it entrenches fundamental rights and freedoms: see R v. Director of Public Prosecutions, ex p. Kebilene [2000] 2 AC 326 (per Lord Hope of Craighead).  I agree.  Moreover, Mr Gordon’s submission in favour of a generous interpretation has received the approval of the Court of Appeal: see paragraph 58 of its judgment in Donoghue.  However, a purposive construction involves determination of the purpose of the Act, a question I consider below.
63.	Mr Gordon also submitted that section 3 of the Act applies as much to the Act itself as to other legislation, and it entitles and requires the Court seeking to interpret the Act to take into account a wider range of material than is permitted by the decision of the House of Lords in Pepper v Hart [1993] AC 593.  On that basis, I was shown, for example, an extra-Parliamentary speech made by the Home Secretary.  I do not accept this submission.  The material which the Court must take into account when interpreting the Convention is set out in section 2.  It does not include material of the kind referred to by Mr Gordon.  Extra-Parliamentary material, in particular, may tell us what was in the mind of a minister, but not what was before, and therefore notionally in the mind of, Parliament.
64.	I must also consider Part 54 of the CPR.  Rule 54.1, headed “Scope and Interpretation”, provides:
(2)	In this Part
(a)	a “claim for judicial review” means a claim to review the lawfulness of – 
(i)	an enactment; or
(ii)	a decision, action or failure to act in relation to the exercise of a public function.
65.	Mr Gordon submitted that the use, in Part 54, of the identical wording as that found in section 6, in a procedural enactment which came into force on the same day as the Human Rights Act, in the same context of public law, must have the same meaning as in the Act.  His submission was not disputed by Mr Goudie or Mr Henderson.  It is clearly right, and is consistent with the judgment of the Court of Appeal in Donoghue at paragraph 65(i).
What is “a public function”? 
66.	A purely functional test would be concerned solely with the nature of the function in question.  The nature of the body exercising the function in question, and the source of its authority, would be irrelevant.  If there is a purely functional test under section 6 and Part 54, the scope of judicial review and of the subjects of public law obligations has indeed been revolutionised by the Act.  The provision of education is a core governmental function: are all private schools exercising a “public function”?  In R v Fernhill Manor School ex p A [1994] ELR 67 and R v Muntham House School ex p R [2000] LGR 255, both pre-HRA cases, private schools which had no involvement in statutory powers were held not to be exercising public functions and not to be amenable to judicial review.  What about a teacher giving private lessons in his spare time?  Or a retired teacher giving private lessons?  The provision of health care is another core governmental function.  Are all private hospitals exercising a “public function”?  What about a single doctor providing private medical care?
67.	An American lawyer would doubtless say that it is counter-intuitive to consider that a retired teacher giving private lessons is a public authority.  No doubt because he had in mind the difficulties suggested by such examples Mr Gordon did not actually confine his submissions to a purely functional test.  For example, he accepted that the private fee-paying residents at Le Court were not entitled to bring judicial review proceedings against Leonard Cheshire, on the basis that Leonard Cheshire does not exercise public functions in relation to them.  To the contrary, he accepted that Leonard Cheshire owed them only private law obligations.  To my mind, a purely functional test would not discriminate between private fee-paying and publicly-funded residents of Le Court: the function exercised by Leonard Cheshire in relation to both is identical.
68.	It is apparent, therefore, that the public authority criterion cannot be purely functional.  The function must be “public”, and that requirement may mean more than that a significant number of people are involved or are affected.  I do therefore propose to consider the purpose of the Human Rights Act and the ambit of the European Convention on Human Rights, in order to arrive at a “purposive” interpretation of section 6.
69.	Article 1 of the Convention, which is one of the only two Articles (the other is Article 13) not included in Schedule 1 to the Act, is as follows:
“The High Contracting Parties shall secure to everyone within their jurisdiction the rights and freedoms defined in Section 1 of this Convention”.
70.	It is generally recognised that the object of the Convention was to grant to (or to confirm for) citizens the specified rights and freedoms as against governments and governmental authorities.  In general, these rights are in the nature of freedoms rather than positive rights to social or economic benefits.  That it was the object of the Convention to confer rights on citizens vis-à-vis their governments is borne out by the content and the wording of the Convention rights themselves, and in some cases even more clearly by the provisions of the specified exceptions to those rights.  For example, Articles 5, 6 and 7 are clearly concerned with rights to be provided under the provisions of domestic law.  Article 10 is concerned with the protection of freedom of expression from governmental interference, and with limiting the restrictions on freedom of expression imposed by domestic law.  Article 8 is the one with which I am most concerned.  It is as follows:
	8.1	“Everyone has a right to respect for his private and family life, his home and his correspondence.
	8.2	There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society, in the interests of national security, public safety, or the economic well-being of the country, for the preservation of disorder or crime, for the protection of health or morals, or the protection of the rights and freedoms of others.”
71.	The Convention does not confer a right to a home, but to respect for one’s home, which is a very different thing.  Be that as it may, it is not possible easily to fit Article 8.2 with any application of Article 8.1 to a private body.  First, and most obviously, Article 8.2 is the counterpart to Article 8.1, and its limitation to public authorities indicates that the obligation corresponding to the right conferred by Article 8.1 is an obligation imposed on public authorities.  That obligation may include an obligation to secure the right in question generally under domestic law; but such an obligation is quintessentially an obligation of the government, and not of any non-public body.  Secondly, the justifications referred to in Article 8.2 are all matters relevant to government, but not to non-governmental bodies.  A non-governmental body is not expected to exercise its rights “in the interests of … the economic well-being of the country”.  In the present case, for example, one of the justifications put forward by Leonard Cheshire for seeking to redevelop Le Court, and, it may be, terminating the residence of a number of present residents, is the cost of keeping it in its present form and of modernising its facilities in order to comply with statutory requirements.  It asserts that its resources are finite, and cannot continue to bear the cost of maintaining Le Court on the present scale.
72.	In this connection, it should be borne in mind that non-governmental bodies often differ from governmental authorities in relation to their financial resources.  Whereas private bodies must nearly always balance their income and expenditure, at least over the medium term, and have limited assets and income, governmental bodies may have access to tax revenues: if expenditure rises, they may increase taxes, or their revenue from tax-collecting authorities.  A purely private body is, within legal constraints, generally entitled to act in its own economic interests; it will often be compelled to act in those interests.
73.	It is very difficult to fit such an obviously relevant consideration for a body such as Leonard Cheshire as its financial situation into the provisions of Article 8.2.  Indeed, it makes little sense to limit the interference by a body such as Leonard Cheshire with the right to respect for one’s home to the matters listed in that provision.  They are matters for governmental bodies, not for the likes of Leonard Cheshire.  This suggests that bodies such as Leonard Cheshire are not within the class of public authorities within the scope of Article 8.  On the other hand, the Courts, as public authorities, can take matters such as the financial position of a landlord into account (or the failure of a tenant to pay his rent), by virtue of the last words of Article 8.2 “the protection of the rights and freedoms of others”: the “others” include Leonard Cheshire.
74.	This approach to the Convention is identical to that of Brooke LJ in Douglas v Hello! Ltd [2001] 2 WLR 992, at paragraph [81] and ff., albeit that he was not concerned with the effect of section 6(3)(b) of the Human Rights Act.
75.	Against this, I was referred by Mr Gordon to the decision of the European Court of Human Rights in Costello-Roberts v. United Kingdom (1995) 19 EHRR 112.  That case concerned corporal punishment in a private school.  The Court held that the United Kingdom would be liable for any breach of Article 3 or of Article 8 resulting from the acts of the headmaster of the school.  The Court observed (at paragraphs 27-28):
 “... the State cannot absolve itself of responsibility by delegating its obligations to private bodies or individuals. ... in the present case, which relates to the particular domain of school discipline, the treatment complained of, although it was the act of a headmaster of an independent school, is none the less such as may engage the responsibility of the United Kingdom under the Convention if it proves to be incompatible with Article 3 or Article 8 or both.”
76.	Mr Gordon relied on the similarities between Costello-Roberts and the present case.  Both concern “core” governmental responsibilities.  In both cases, the government may be said (and in Costello-Roberts it was said) to have “delegated” its obligations to otherwise private bodies.  If the independent school in Costello-Roberts was required to comply with Articles 3 and 8, Leonard Cheshire is similarly required to comply with Article 6.  Whereas at the date of Costello-Roberts the Convention was not part of our domestic law, it is now, and Convention rights, and in particular rights under Article 8, are therefore now enforceable directly against Leonard Cheshire, rather than indirectly via the United Kingdom government.
77.	Attractive though this argument is, it is in my judgment flawed.  In Costello-Roberts, the Court held that the United Kingdom, as a High Contracting Party, was responsible for conferring and protecting rights under Article 3 and Article 8, if necessary by appropriate legislation: see paragraph 37 of the Opinion of the Commission, at page 119, and paragraph 26 of the judgment of the Court, at 132:
“The Court has consistently held that the responsibility of a State is engaged if a violation of one of the rights and freedoms defined in the Convention is the result of non-observance by that State of its obligation under Article 1 to secure those rights and freedoms in its domestic law to everyone within its jurisdiction.  Indeed, it was accepted by the Government for the purposes of the present proceedings that such an obligation existed as regards securing the rights guaranteed by Articles 3 and 8 to pupils in independent schools.”
The Government referred to is of course that of the United Kingdom.  
78.	The party which would have been liable in Costello-Roberts if there had been an infringement of a Convention right was the United Kingdom government.  If a State party to the Convention fails to secure such rights, if necessary by domestic legislation (particularly in the field of education, which, under Article 2 of the First Protocol, is the subject of one of the few positive Convention rights), it incurs responsibility to its citizens under the Convention, irrespective of the status of the person or body under its jurisdiction infringing the Convention right in question.  It therefore does not follow that the Convention was intended to make non-governmental bodies, acting in accordance with their (on this hypothesis non-Convention-compliant) domestic law, directly liable for breach of a right that the government had failed to secure under domestic law.
79.	In Costello-Roberts, the Court held that the United Kingdom would be responsible for any failure to secure rights under Article 3 and Article 8, irrespective of the nature of the body providing education, governmental or otherwise.  It therefore does not follow that an independent school is a governmental or public authority.  Indeed, the very wording of the above extract from judgment of the Court, referring to “private bodies or individuals”, contradicts any such interpretation of the decision.  Nor does it follow that under English Law a non-public authority is liable under our domestic law for breach of a Convention right that is not part of our domestic law.  In such a case, the party responsible is the State, which has failed to secure the Convention right under its domestic law.  (Indeed, under section 6(2) of the Act even a public authority has a defence if domestic law required it to act in a manner incompatible with the Convention.)
80.	The above analysis of Costello-Roberts seems to be consistent with the approach of the Court of Appeal in Donoghue: see paragraph 60 of the judgment.
81.	Mr Gordon relied on Article 14, the prohibition on discrimination, in support of his argument that claims to enforce Convention rights are not charity proceedings.  I originally considered it relevant in another respect.  If, as against Leonard Cheshire, privately funded residents have no Convention rights, because, as Mr Gordon put it, in relation to them it does not exercise a function of a public nature, whereas publicly funded residents do have such rights, it seemed to me that there would be discrimination of a kind prohibited by Article 14.  The enjoyment of the right to respect for one’s home, under Article 8, would not be secured without discrimination on the ground of property or income.  
82.	In criticising the equivalent of my preceding paragraph in my draft judgment, Mr Gordon submitted:
“Article 14 is concerned with the non-discriminatory enjoyment of Convention rights.  If a person has no Convention rights, then Article 14 is not engaged at all.”
My initial reaction to this submission was that it does not meet the point, and  involves too narrow an application of Article 14.  On reflection, however, I see that the matter is more complicated.  In theory, there may be cases where a hybrid authority exercises a public function in relation to some persons but not others.  I note that in Donoghue the Court of Appeal did not decide whether Poplar’s functions in relation to secure tenants were those of a public authority.  Questions may also arise as to whether in relation to some persons a hybrid authority’s acts are of a private nature for the purposes of section 6(5) of the Human Rights Act.  Nonetheless, whatever the logic applied, a difference between the rights of individuals resulting from matters referred to in Article 14 seems to me to be objectionable.  Section 3 is of obvious relevance in this connection.
83.	Doubtlessly because Convention rights are rights against government and governmental bodies, the Human Rights Act was intended to incorporate into English Law Convention rights as against government and governmental authorities.  It is for that reason that the unlawfulness created by section 6 is restricted to public authorities and bodies exercising public functions.  Sections 7 and 8 are similarly restricted in their application.  As Grosz, Beatson and Duffy put it in Human Rights: the 1988 Act and the European Convention: 
“The HRA is primarily designed to give Convention rights a ‘vertical’ effect, i.e., to protect the rights of citizens against encroachment by the state and public bodies.”
84.	I do not think that there is sufficient ambiguity in section 6 of the Act to require reference to Parliamentary material.  If I were to refer to such material, it would be to the Government’s White Paper Cm 3782.  In Westminster City Council v National Asylum Support Service (Court of Appeal 10 April 2001, unreported), Simon Brown LJ said, at paragraph [22] of his judgment:
“White papers are a legitimate aid to construction - see Duke v GEC Reliance Limited [1988] AC 618, 637, Harrods Limited v Remick [1998] 1 All ER 52, 58, and Pepper v Hart [1993] AC 593, 640.  Hansard is more problematic, a parliamentary statement being admissible only if made by the Minister or other promoter of the Bill, and only if it clearly addresses and resolves the very ambiguity or obscurity which the rule postulates.”
85.	Paragraph 2.2 of the White Paper which preceded the Human Rights Act was as follows:
“Although the United Kingdom has an international obligation to comply with the Convention there at present is no requirement in our domestic law on central and local government, or others exercising similar executive powers, to exercise those powers in a way which is compatible with the Convention.  This Bill will change that by making it unlawful for public authorities to act in a way which is compatible with Convention rights.  The definition of what constitutes a public authority is in wide terms.  Examples of persons or organisations whose acts or omissions it is intended should be able to be challenged include central government (including executive agencies); local government; the police; immigration officers; prisons; courts and tribunals themselves; and, to the extent that they are exercising public functions, companies responsible for areas of activity which were previously within the public sector, such as privatised utilities.” 
86.	This too points to the adjective “public” in section 6 of the Human Rights Act being used in the sense of governmental.  In my view, that is how it was interpreted by the Court of Appeal in Donoghue.  
87.	There was one other matter relied upon by the Claimants, which was not present in Servite.  The Leonard Cheshire Charter states that:
“Our aim is to offer to those with disabilities:- 
•	Unquestioning recognition of their full human rights.”
It was suggested that this was an assumption by Leonard Cheshire of an obligation to act compatibly with the Convention.  Quite apart from the fact that a reference to human rights is not necessary a reference to the Convention rights (the Leonard Cheshire Charter predates the Human Rights Act, and the Convention is not the only international instrument dealing with human rights), it is not possible for a private body exercising non-public functions to assume public law obligations merely by such a declaration.
88.	My original conclusion was that the Human Rights Act had not altered the status of Leonard Cheshire, and that it does not exercise public functions, in the sense of governmental functions.  If this conclusion is to stand, it is necessary to distinguish it from Poplar.  It is not difficult to do so.  There are the following differences between them:
(i)	Whereas Poplar was created by the local authority that provided all its tenants, Leonard Cheshire was established by private individuals.  
(ii)	Poplar is registered with the Housing Corporation as a social landlord (“RSL”).  RSLs are under statutory duties to co-operate with local housing authorities (sections 170 and 213 of the Housing Act 1996).  In most local authority areas the housing authority has nomination agreements with RSLs, enabling them to nominate tenants to whom the RSL should grant tenancies from the housing registers (see paragraphs 44 and 45 of the judgment in Donoghue.). 
(iii)	In contrast, no purchasing authority is able to compel Leonard Cheshire to accept a particular person as a service user or resident of Leonard Cheshire.  
(iv)	As an RSL, Poplar is subject to supervision and regulation by the Corporation as to its governance, finance and housing management.  The Corporation’s powers in relation to an unsatisfactory RSL include the withdrawal of funding, the making of appointments to its governing body, and the removal of employees or governing body members.  
(v)	The registration of Leonard Cheshire under the Registered Homes Act 1984 does not involve the kind or extent of regulation that applies to an RSL.  The conduct of Leonard Cheshire is subject to statutory regulation; but there are no powers under that Act for any statutory authority to impose members on the governing body of Leonard Cheshire or to interfere in the running of Leonard Cheshire as an organisation.  The Charity Commissioners do have such powers: but it is not suggested that their powers are relevant to the question whether a charity is a public authority.
(vi)	Poplar was created by Tower Hamlets to take a transfer of local authority housing stock; five of its board members are also members of Tower Hamlets; and Poplar was subject to the guidance of Tower Hamlets as to the manner in which it acted towards Ms Donoghue: see paragraph 65(vi) of the judgment of the Court of Appeal.
(vii)	Leonard Cheshire does not have with any statutory authority the kind of closely integrated relationship that Poplar has with Tower Hamlets.  The residents of Leonard Cheshire do not come from one local authority, but from several, and also include privately funded residents and those funded by local health authorities.  In no sense can Leonard Cheshire be said to be dependent on any single public authority.
89.	In my judgment, the decision in Donoghue that Poplar is a public authority depended on the close assimilation of its role to that of Tower Hamlets, and its integration with the functions of Tower Hamlets.  The decisive factors were those referred to in paragraphs 65(vi) and (vii) of the judgment of the Court of Appeal.  I have referred to paragraph 65(vi) above.  Paragraph 65(vii) is as follows:
	vii).	“The defendant, at the time of transfer, was a sitting tenant of Poplar and it was intended that she would be treated no better and no worse than if she remained a tenant of Tower Hamlets. While she remained a tenant, Poplar therefore stood in relation to her in very much the position previously occupied by Tower Hamlets.”
There is no equivalent of this factor in the present case.
90.	As indicated above, therefore, my conclusion remains that Leonard Cheshire does not, in relation to the Claimants, exercise a public function.  It is not subject to the duty imposed by section 6(1) of the Human Rights Act.  Equally, it is not amenable to judicial review.
91.	In these circumstances it is strictly unnecessary for me to consider further section 6(5) of the Human Rights Act, which is relied upon by Mr Goudie.  It would be relevant only if Leonard Cheshire does exercise certain functions of a public nature.  Section 6(5) only applies to “hybrid” authorities.  It follows that non-hybrid public authorities, such as central and local government, must act compatibly with Convention rights even when carrying out acts of a private nature, such as ordering stationery.  Curiously, unlike subsection (3)(b), subsection (5) is not worded in terms of function, but by reference to the nature of the act in question.  The object of subsection (3)(b) would appear to be to exclude from the obligation of a hybrid authority to comply with Convention rights both its private functions and its acts of a private nature (such as the purchase of stationery) carried out in connection with the exercise of its public functions.  If Leonard Cheshire were exercising a public function in providing a home for its residents at Le Court, I should find it difficult to distinguish its decision to redevelop from the decisions which were held amenable to judicial review in Wandsworth BC v Winder [1985] AC 461; c.f. West Glamorgan County Council v. Rafferty [1987] 1 WLR 457 and Waverley Borough Council v. Hilden [1988] 1 WLR 246.  The decision to redevelop, involving changing the scale and nature of facilities provided, goes to the heart of the function in question.  It affects those who are the beneficiaries of the charity’s functions, beneficence and bounty.  As I stated above, the fact that Leonard Cheshire provides its services pursuant to contracts with funders and its residents is not inconsistent with a public function, and decisions affecting such contracts are not necessarily of a private nature.  This case is distinguishable from cases such as R v East Berkshire Health Authority, ex p Walsh [1985] 152, which are concerned with the contractual relations of public authorities with third parties.
Charity proceedings
92.	Again, strictly the issues argued under this heading do not arise.  Since they were fully argued, and may be of general importance, I shall set out my conclusions.
(a)  The Claimants’ standing
93.	The Claimants are “persons interested in the charity” within the meaning of section 33 of the Charities Act.  They claim as beneficiaries of the charitable trust, who have been enjoying the bounty of the charity.  Their claim to be persons interested is greater than that of the pupils’ parents who were held to be such by Arden J in Gunning v Buckfast Abbey Trustees [1994] TLR 327.  The Claimants’ interest is to be distinguished from that of a party contracting with a charity in order to enable it to exercise its charitable functions, such as the schoolmaster in Holme v Guy (1877) 5 Chancery D 901, whose interest is adverse to the charity.  As Mr Henderson accepted, just as the Claimants have the necessary standing to bring these proceedings for judicial review, so they have standing to bring charity proceedings.
(b)  Are judicial review proceedings “charity proceedings”?
94.	Some care is required in the use of the word “public” in the present connection.  It is used in two senses.  In the Human Rights Act, as I have held, it bears a connotation of governmental authority.  A charity is “a public trust for the promotion of purposes beneficial to the community” (per Mummery LJ in Gaudiya Mission v Brahmachary [1998] Ch 341, 350).  In his judgment in Stanway v H M Attorney General (unreported, 5 April 2000), Richard Scott V-C said “Charities operate within a framework of public law, not private law”.  However, in the context of charities the word “public” bears its ordinary meaning, and has no governmental connotation.  The Vice Chancellor did not mean that charities are governed by the same law as governs governmental authorities.  The law of charities is a different area of public law.  The old judicial review remedies of certiorari, mandamus and prohibition were never applied to charitable trusts as such.  The public law that applies to charities is of equitable origin; that applied to public authorities is of common law origin.  Charities are not necessarily public authorities.  This does not mean that a charity cannot be a public authority within the meaning of the Human Rights Act and Part 54 of the CPR, only that a charity is not necessarily a “public authority”.  The decision of Robert Walker J in Scott v National Trust [1998] 2 All ER 705, and those of the Court of Appeal in Construction Training Board v Attorney General [1973] Ch 173 and Donoghue itself show that a charity may exercise public (i.e., governmental) functions.
95.	It follows that I disagree with the statement of Lightman J in RSPCA v HM Attorney General (unreported, 26 January 2001) that:
“The fact that a charity is by definition a public, as opposed to a private, trust, means that the Trustees are subject to public law duties and judicial review is in general available to enforce performance of such duties.  There is therefore a theoretical basis for allowing recourse to judicial review.”
In my judgment, there is only a “theoretical basis” for judicial review of a charity if it exercises a public function in the governmental sense.  It seems to me that the Court of Appeal in Donoghue was of the same view: see paragraph 65(iv) of their judgment.
96.	Section 33(8) of the Charities Act defines “charity proceedings”, for which the authority of the Charity Commissioners or the leave of a judge of the Chancery Division is required, as “proceedings in any court in England or Wales brought under the court’s jurisdiction with respect to charities or brought under the court’s jurisdiction with respect to trusts in relation to the administration of a trust for charitable purposes”.  The meaning of the phrase “the court’s jurisdiction with respect to charities” is not obvious.  Mr Gordon submitted that the section 33 requirement for the authority of the Charity Commissioners or the leave of a judge of the Chancery Division is an impediment to legal proceedings, and as such discriminatory as between charitable and non-charitable bodies, and is to be narrowly construed.  But save where the intervention of the Court is required as a matter of urgency, the requirement that the claimant seek the authority of the Commissioners is not an onerous one, and if the Commissioners refuse to give authority (and the time after which a failure to give authority is to be treated as a refusal will depend on the urgency of the circumstances), the claimant may seek the leave of a Chancery Judge.  I am more impressed by the fact that action by the Commissioners, or Chancery proceedings, may be more beneficial than judicial review proceedings.  
97.	In the Construction Training Board case, Pennycuick V-C (at [1971] 1 WLR 1303) and the Court of Appeal (above) rejected the submission that the phrase referred to the jurisdiction of the court that was peculiar to charities.  Buckley LJ and Plowman J thought that the expression included proceedings concerning an abuse of trust by those having management of the charity.  Pennycuick V-C considered that the phrase was satisfied if the Court had jurisdiction over allegations that the charity was acting ultra vires: see at [1971] 1 WLR 1309.  Acts by trustees of a charity in the exercise of its public functions that cause Convention rights to be infringed may constitute breaches of trust, and if so proceedings to challenge them would be charity proceedings.  In Ex parte Scott [1998] 1 WLR 226 (Tucker J), Scott v National Trust [1998] 2 All ER 705 (Robert Walker J) and RSPCA v HM Attorney General (Lightman J, unreported, 26 January 2001), judicial review proceedings were held to be charity proceedings for which authorisation of the Commissioners or leave of a Chancery judge was required.  In the light of these authorities, judicial review proceedings against a charity exercising public functions are charity proceedings.
98.	It seems to me to make no difference that the present proceedings for judicial review raise issues under the Human Rights Act.  The Human Rights Act has not imposed on public authorities obligations so different in kind from those which applied before 2 October 2000 as to justify different procedures from those applicable to judicial review proceedings in which no allegations of breach of Convention rights are made.  Furthermore, it seems to me that it would be undesirable if judicial review proceedings against a charity that do not involve allegations of infringement of Convention rights were charity proceedings and subject to the filters laid down in section 33 of the Charities Act (and assigned to the Chancery Division), while proceedings that do involve such allegations were outside section 33 and assigned to the Administrative Court.  Such a distinction would be productive of duality of proceedings and unnecessary interlocutory disputes and costs.
99.	It also makes no difference that Leonard Cheshire is an incorporated charity.  As Mr Henderson pointed out, a corporate charity, such as Leonard Cheshire, is in the same position as an unincorporated charitable trust for the purpose of the Court’s power to supervise and to enforce charitable obligations: see Halsbury’s Laws, volume 5(2), paragraph 425, note 2.  
100.	Accordingly, I should have held that the present proceedings were charity proceedings.
(c)  An alternative remedy?
101.	In Scott v National Trust and RSPCA v HM Attorney General¸ charity proceedings were regarded as a suitable alternative remedy for the purposes of the exercise of the discretion of the Court to grant or refuse leave to apply for judicial review.  But if a charity does exercise public functions, and (as was held in those cases) judicial review proceedings are charity proceedings, these are not true alternatives.  The wording of section 33(2) is clear and unequivocal: without the authority of the Commissioners or the leave of a judge of the Chancery Division, this Court cannot permit charity proceedings to be commenced, or if already commenced, to continue.  If a claimant has neither the authority of the Commissioners nor the leave of a judge of the Chancery Division, he cannot bring his proceedings either in the Chancery Division or in the Administrative Court.  Furthermore, if judicial review is available against a charity, then the judicial review proceedings are themselves charity proceedings.
102.	It is implicit in the judgments of Robert Walker J and of Lightman J in Scott v National Trust and RSPCA v HM Attorney General that proceedings in the Chancery Division were at least as advantageous as those in the Administrative Court, and possibly more so.  In appropriate circumstances, for instance, a scheme may be ordered in order to circumvent factual or legal disputes that would be costly and unproductive to determine.  It was presumably for this reason that Lightman J said in the RSPCA case, at paragraph [22]:
“It is well established that judicial review proceedings are inappropriate where the issue can be the subject of charity proceedings.”
Mr Henderson was unable to identify the authorities to which Lightman J impliedly referred which established that proposition, other than the first instance decision of Robert Walker J in Scott v National Trust, and I am unaware of any.  Be that as it may, the advantages of charity proceedings over judicial review proceedings encourages me in my view that judicial review proceedings against a charity may be charity proceedings.
103.	However, as I mentioned in paragraph [101] above, with respect to the judgments of both Robert Walker J and Lightman J, where a charity is amenable to judicial review, I question whether it is appropriate to consider charity proceedings as an alternative remedy to judicial review.  In addition to the matters I mentioned in that paragraph, the principle that leave to apply for judicial review may not be given, and that relief may be withheld, if there is a suitable alternative remedy is normally applied where there is an alternative statutory or other administrative remedy, as in R v Chief Constable of the Merseyside Police, ex p Calveley [1986] QB 424, the case cited by Robert Walker J in his judgment in Scott v National Trust.  It is not applied where the alternative is proceeding in another Division of the High Court.  In such cases, one Division of the High Court normally considers all the causes of action relevant to the facts before it.  It would be unfortunate to return, in the field of administrative law applied to charities, to a duality of jurisdictions as between Chancery and Queen’s Bench.  Both judicial review proceedings and charity trust proceedings may, in an appropriate case, be combined and heard together, for example by transfer of the proceedings out of the Chancery Division (to which they are assigned by RSC Order 108) to the Administrative Court under CPR Part 30.  Both Mr Henderson and Mr Gordon accepted that such a transfer could be made.  However, even without such a transfer, a judge of the Administrative Court, if he is not already a judge of the Chancery Division, may act as an additional judge of the Chancery Division; or the combined proceedings may be heard by a Chancery Division judge who is also a nominated judge of the Administrative Court.  Unless it is clear when proceedings are commenced that judicial review adds nothing to the charitable trust proceedings, I suggest that it would be more efficient and more likely to lead to a just result if the proceedings were to continue together in one of the ways I have suggested.
A gap in judicial review?
104.	In Servite, Moses J regretted that the authorities binding on him did not permit him to extend judicial review to the charitable housing association with which he was concerned.  I have to say that I do not share his regret.  The privatisation of formerly governmental activities has been authorised by Parliament.  Privatisation means, in general, that functions formerly exercised by public authorities are now carried out by non-public entities, often for profit.  It has inevitable consequences for the applicability of judicial review, which the courts are not free to avoid.
105.	Dawn Oliver stated in her instructive article at [2000] PL 476:
“It would be very tempting for the courts, committed to maximising the protection of Convention rights, to give a wide meaning to “public authority” but this could deprive a wide range of bodies of the protection of the (Human Rights) Act.”
I agree with this caution.  As Professor Oliver points out, the consequence of holding that a body is a public authority is that it has no legal right under the Human Rights Act to the protection of its Convention rights against the Government.  The Act confers rights on citizens against the Government and other public authorities, not on public authorities against the Government.  Public authorities have no Convention rights.  To take the example of the subsidised theatre I referred to in paragraph [48(i)] above, I should be concerned if it were held to be a public authority and therefore not entitled to the protection of its Article 10 right of free expression.  At least in the case of purely commercial entities, there must also be concerns as to imposition of the procedural and substantive obligations and restrictions applicable to bodies that are classified as public authorities.
106.	Professor Oliver suggests that the judicial response to the “protection gap” should be for “the courts (to discharge) their functions as public authorities under the Human Rights Act by developing private law so as to provide remedies for those whose Convention rights have been interfered with.”  Again, I agree.  In some areas, the scope for development may be limited, and Parliament may have to consider enhanced regulation.  However, in the case of charities, as Robert Walker J pointed out in Scott v National Trust, there are significant parallels between the obligations of charities and those of public authorities.  Both are required to act not in the interests of any private shareholder or proprietor, or of those who administer them, but in the public interest or in the interests of a section of the public.  Looking at the matter untrammelled by the different historical origin of the two jurisdictions, it seems to me that these similarities should be reflected in the obligations of the bodies in question to those in their care.
107.	I have considerable sympathy for the Claimants in this case.  If, however, they have a justifiable complaint in relation to the decision of Leonard Cheshire to redevelop Le Court, their remedy lies in charity proceedings in relation to the performance of the charitable trust to which Leonard Cheshire is subject, and not in proceedings by way of judicial review.  Whether Leonard Cheshire will be entitled to terminate its agreement with Miss Heather and others with similar agreements is also a matter for another day. 

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MR JUSTICE STANLEY BURNTON:  My judgment on the preliminary issues raised in this case has been distributed in draft and sets out my conclusions and findings.  Copies are available for the press.
MR WISE:  My Lord, I appear on behalf of the claimants this morning, my learned friend Mr Henderson appears for the Attorney General and Miss Carrs-Frisk for the first defendants.  May I thank your Lordship for your long and considered judgment? Clearly one does not thank your Lordship for the outcome, but nevertheless there we are.
      Your Lordship may be aware that there have been negotiations taking place amongst the parties over the last week or two.  May I pass up to your Lordship a copy of a proposed order that has been discussed between the parties?
MR JUSTICE STANLEY BURNTON: This is leap frog, is it?
MR WISE:  It is.
MR JUSTICE STANLEY BURNTON: So the parties are agreed?
MR WISE: They are, my Lord, yes.
MR JUSTICE STANLEY BURNTON: What is the relevant position of the Court of Appeal?  Donoghue?
MR WISE:  Donoghue, my Lord, yes.  I do not know if your Lordship wants to go to the note first and then the proposed order second.  Your Lordship will be aware of  the provisions of section 12 of the 1969 Act.  I have set it out in summary on the first page.  The requirements, as your Lordships sees, are that all parties consent to the grant of a certificate; that is satisfied.
      That a sufficient case for an appeal is made out; I will come to that in one moment.  Also, that your Lordship is yourself satisfied that it is appropriate to grant such a certificate.
      If your Lordship goes over to page 2, the sufficiency tests are set out in two limbs of section 12(3).  Firstly, that the point of law relates wholly or mainly to construction or enactment which has been fully argued before the High Court - clearly, we say, that is met here ‑ or the point of law is one on which there is binding authority of the Court of Appeal or the House of Lords.  I make a third point there: even if your Lordship were to grant a certificate, the House of Lords retains a discretion as to whether to maintain the position.
      Moving to the facts of the present case, your Lordship sees that it is understood that all parties agree and that is, I am sure, the case this morning. With respect to the suitability criteria, your Lordship sees at (a) and (b) the way in which we put it.  The  first point is the construction of section 6 of the Human Rights Act.
MR JUSTICE STANLEY BURNTON:  I am looking to the end of your note.  If we look at your note paragraph 2, do you say both conditions 1 and 2 are satisfied?
MR WISE:  In this case.
MR JUSTICE STANLEY BURNTON: And that is agreed between the parties, is it?
MR WISE:  Yes, my Lord.
MR JUSTICE STANLEY BURNTON:  Is it?  Mr Henderson looks to me as if it is not.
MR HENDERSON:  I only raise an eyebrow, my Lord.  We are agreed this is a suitable case for a leapfrog.  We are only slightly concerned as to whether Donoghue is binding authority.
MR JUSTICE STANLEY BURNTON: That occurred to me too.
MR HENDERSON:  I understand the way my learned friend puts it is he wants to say that Donoghue is wrongly decided and if Donoghue is wrongly decided --
MR JUSTICE STANLEY BURNTON: But that is open to him in any event.  If I am satisfied under 2(1) "wholly or mainly construction of an enactment has been fully argued" - and it certainly was fully argued ‑ that is enough, is it?
MR WISE:  I think so, my Lord.  In reality, of course,  if their Lordships were to take the matter, they are going to have to consider it in the round in any event.
MR JUSTICE STANLEY BURNTON: Absolutely.  They will look at all the authorities, including that more recent one, the Walbank(?) case.
MR WISE:  Walbank case.
MR JUSTICE STANLEY BURNTON: That Mr Gordon kindly referred me to.
MR WISE:  In reality little hangs on whether your Lordship is satisfied under both or just one of the limbs.  We merely flag it up because we would wish to argue both limbs.
MR JUSTICE STANLEY BURNTON: It does seem to me that the quicker this issue as to what is a hybrid authority goes before the House of Lords the better.
MR WISE:  I think that is right, my Lord.  Although your Lordship does not have the power to order expedition, it would, in my submission, be helpful if your Lordship could comment or at least indicate that it is appropriate that this matter be heard as soon as possible.
MR JUSTICE STANLEY BURNTON: Clearly it relates to the future of Le Court, does it not, and the decisions have to be made so far as Le Court is concerned; or decisions have been made but they would have to be implemented  quickly.  So I am happy to say this is a case which should be heard and determined as soon as possible so that the trustees and the residents know what their position is.
MR WISE:  I am grateful.  Also the clarification of the legal position generally, of course.  One would hope that the matter could be dealt with by their Lordships' House this calendar year.  It is unrealistic to expect it to be this term, but this calendar year would be very quick --
MR JUSTICE STANLEY BURNTON: In their terms.
MR WISE:  -- in terms of the House of Lords, but obviously one does not want it to go into the normal run of case that may take two years to be determined.
MR JUSTICE STANLEY BURNTON: So far as I can, I think I have already encouraged their Lordships, if they give leave, to hear this case as soon as possible, because clearly it is a recurring question that is coming before the courts, and in this particular case there are significant reasons why the matter should be determined as soon as possible.
MR WISE:  That is right.  I am much obliged.
      May I take your Lordship to the proposed order?
MR JUSTICE STANLEY BURNTON: I have read through the proposed order. 
MR WISE:  There is one issue of dispute between the parties and that is in respect of costs.  Your Lordships sees that we seek an order that there be no order for costs save for an order of detailed assessment of our community legal service funding costs.  The defendants, both the Attorney General and Leonard Cheshire, seek a lottery order.  In my submission, in the particular circumstances of this case, that is not an appropriate order for your Lordship to make, given the severe learning difficulties of my clients.
MR JUSTICE STANLEY BURNTON: Certainly if they win the lottery then everything is going to --
MR WISE:  They are unlikely to win the lottery, my Lord, because they are not in a position to play the lottery. One merely makes the submission that we would say that it is not appropriate for the court to make an order that will have no meaningful effect and is not likely to be enforced in any event.  Ultimately, of course, it is for your Lordship's discretion; and I do not press the case unduly.
MR JUSTICE STANLEY BURNTON: It is the normal rule, though, is it not?
MR WISE:  It is the normal rule, but your Lordship does have a discretion.  This court does on occasion and in an appropriate case not make an order where the  claimants' position is such that it would not be appropriate to do so.
MR JUSTICE STANLEY BURNTON: I do not really know whether there is not some millionairess aunt who is likely to leave a fortune to one of the claimants; I just do not know, do I?
MR WISE:  No, and I cannot help your Lordship on that either.  I leave that to your Lordship.
MR JUSTICE STANLEY BURNTON: It seems to me it is likely to be an academic point, I have to say.  That is it, is it?
MR WISE:  It is, my Lord.
MR JUSTICE STANLEY BURNTON: Miss Carrs-Frisk?
MISS CARRS-FRISK:  My Lord, of course we do seek the usual order on costs.  It does seem to us that the possibility that the order may not enforced is no reason not to make it, as your Lordship has pointed out.  If the claimants do win the lottery then we should have a chance to share in those proceeds.  My Lord, of course, it is important for our charitable funds to be protected also in the public interests.
      So far as the certificate to the House of Lords is concerned, my Lord, I do not want to be unduly technical but my learned friend did not actually mention what seems to be the key criteria about a point of law of  general public importance.  I have actually copied out, virtually, Atkin's Court Form as a specimen certificate which makes that point.  May I just hand that up?
MR JUSTICE STANLEY BURNTON: Certainly.
MISS CARRS-FRISK:  In our submission that it is a better way of putting it if a certificate is to be granted.
MR JUSTICE STANLEY BURNTON: (Same handed.) Has everyone seen this?
MISS CARRS-FRISK:  Yes, my Lord.  I do not understand Mr Wise or indeed Mr Henderson to be objecting particularly to that formulation.  As I say, it just seemed to me that a point about general public importance probably should be reflected in the order.
MR JUSTICE STANLEY BURNTON: What about the bound by decision of the Court of Appeal?
MISS CARRS-FRISK:  In our submission probably both criteria apply, so that they could both conveniently be inserted.
MR JUSTICE STANLEY BURNTON: It is rather odd to say that I am bound by a decision of the Court of Appeal when I have come to a different result in this case from the Court of Appeal in that case.
MISS CARRS-FRISK:  I see that point.  You are bound by the ratio and to apply the guidance.  But I am perfectly content, if you want it, only to refer to the first of  the criteria.  Either way we get there.  We also say costs for the charity.
MR HENDERSON:  My Lord, I have no more to say about the form of the order.  I am quite happy with either formula.
MR JUSTICE STANLEY BURNTON: What do you say about the Court of Appeal point?
MR HENDERSON:  (Pause.)  If pushed into a corner on it, my Lord, I would say that your Lordship is bound by the Court of Appeal.  Although your Lordship may have come independently to the same conclusion as to the test to be applied as the Court of Appeal applied in Donoghue, if my learned friend wishes to say there should be some different sort of test applied, then your Lordship is bound by Donoghue and the first limb and second limb both apply so far as the appeal is concerned.
MR JUSTICE STANLEY BURNTON: You are not asking for costs?
MR HENDERSON:  I am asking for costs, my Lord, on the basis that the Attorney General was a necessary party and was successful.  The claimant chose to bring proceedings which your Lordship has found were charitable proceedings.  A necessary consequence of bringing charity proceedings is that generally the Attorney has to be joined; and if you bring charity  proceedings and lose, you face the prospect of having to pay two sets of costs.   It is one of the drawbacks of bringing charity proceedings: you have to pay the trustee's costs and the Attorney General's costs. Therefore I do ask for the Attorney General's costs to be paid by the claimants subject to the normal legal aid proviso.
MR JUSTICE STANLEY BURNTON: That is rather uncharitable on the part of the Attorney General.
MR HENDERSON:  My Lord, it is public funds which are at stake one way or the other, because the Attorney General's costs are provided by the taxpayer after all. So it is a question of whether the taxpayer generally should bear the Attorney General's costs or the litigants who have chosen to bring these proceedings should bear those costs.  I submit that in the circumstances of this case, where the claim has failed, it is appropriate that the failing litigants should pay rather than the taxpayer generally.
MR WISE:  As to costs, my Lord, I would merely invite your Lordships to limit the costs liability of my clients as much as possible.  I would invite your Lordship to only make a lottery order, with respect, to the first defendants and not the second defendants. Obviously, as I said earlier, it is a matter of  discretion and what is fair and just in the circumstances.  In these circumstances it would seem that any costs liability should be limited on the part of my clients to the costs borne by the first defendants, and then only subject to the enforcement of the court, lottery order type situation.
      As far as the wording of the order, my Lord, we would seek to pursue the matter on both limbs of section 12.
MR JUSTICE STANLEY BURNTON: I think Mr Henderson has satisfied me that both limbs apply.
MR WISE:  I am grateful.
      With regards to the actual wording, my Lord, I am grateful to my learned friend Miss Carrs-Frisk for drawing attention to the general public importance point.  In any event that must be implicit in the draft that I passed up to your Lordship.
MR JUSTICE STANLEY BURNTON: I have a slight preference for the longer draft, and if there is no objection?
MR WISE:  Nothing hangs on it.  I am quite content with that, as well as the parenthesis.
MR JUSTICE STANLEY BURNTON:  The square brackets.
MR WISE:  It does apply to both limbs.
      I do not know if there is any other matters I can assist your Lordship on? 
MR JUSTICE STANLEY BURNTON: No, thank you very much.
      There will be an order in the agreed form as supplemented by Miss Carrs-Frisk's draft with the square brackets taken out.  It seems to me this is a case in which I was bound by a decision of the Court of Appeal - that is the test to be applied - and therefore I certify under both limbs.
      As far as costs are concerned, reluctant though I am to make what is referred to as a lottery order in respect of two parties and notwithstanding or possibly because of the fact that I consider the possibilities of any actual enforcement of any costs order are extremely remote, it seems to me that I cannot justify a departure in the present case from the normal so‑called lottery order in respect of both the Attorney General and the charity, the Leonard Cheshire Foundation.  I do with more reluctance in the case of the Attorney General, but, as I say, it seems to me I have no proper reason for not making an order in his favour, given that he was a necessary party to these proceedings in the event and certainly on the basis on which I found that these proceedings were charity proceedings within the meaning of the Charities Act.
      Unless there are any other matters?
MR WISE:  For clarification, my Lord, your Lordship also  does make, of course, the order for the detailed assessment of the claimants' CLSF costs?
MR JUSTICE STANLEY BURNTON: I make the order as set out in the agreed order, subject to the question of costs I have just mentioned and subject to the form of certificate.
	I would like to express my thanks to those who have provided corrections to my judgment and my appreciation of the argument before me.  As I have already said, had I already had the decision of the Court of Appeal I think my judgment would have been a lot shorter; but I did not.  You will have to forgive me for not editing down my judgment accordingly.  I wish you all speed and good luck in the House of Lords. Thank you.
	Since there is a draft order and since we have this too, would it be possible for the parties to initial an order which reflects what I have just decided and give it to the associate?
MR WISE:  Certainly, my Lord.  Does the associate wish us to do it now whilst we are all at court?
MR JUSTICE STANLEY BURNTON: If possible.
MR WISE:  I am sure we can do it outside court now.