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You are here: BAILII >> Databases >> High Court of Ireland Decisions >> Reid & Anor -v- H. S. E. [2010] IEHC 292 (16 June 2010)
URL: http://www.bailii.org/ie/cases/IEHC/2010/H292.html
Cite as: [2010] IEHC 292
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Judgment Title: Reid & Anor -v- H. S. E. Composition of Court: Judgment by: Laffoy J. Status of Judgment: Approved |
Neutral Citation Number: [2010] IEHC 292 THE HIGH COURT 2010 4478 P BETWEEN MARTIN REID AND JAMES TURNER PLAINTIFFS AND
HEALTH SERVICE EXECUTIVE DEFENDANT Judgment of Miss Justice Laffoy delivered on the 16th day of June, 2010. 1. The application
(b) an interlocutory injunction restraining the defendant, its servants or agents or any of them, acting howsoever from breaching the agreement entered into between each of the plaintiffs and the defendant for the provision of dental treatment services.
2. The factual background 2.2 The DTSS, in broad terms, provides for the provision of dental services free of charge to medical card holders. Initially, it was brought into operation to give effect to the obligations and functions of the defendant’s predecessors, the Health Boards, under s. 67 of the Health Act 1970 (the Act of 1970), following the publication by the Government of the Dental Health Action Plan in 1994 and negotiations between the Irish Dental Association (the IDA) and the Health Boards. The result was the acceptance in 1994 of a form of contract (the 1994 Contract) to be entered into between the Health Board, on the one hand, and dental practitioners, on the other hand, for the provision of dental treatment services in accordance with the DTSS. 2.3 Following a dispute between the IDA and the Health Boards, in 1999 the DTSS was revised prospectively. There was an extension of eligibility for routine treatment and a discontinuation of the “Emergency Scheme” which had hitherto existed. However, for present purposes, the significant change was that what was referred to as “above the line” treatment did not require prior approval of the Health Board, whereas in the case of “below the line” treatment prior approval was necessary. As I understand it, in broad terms, above the line treatment included routine dental treatment, whereas below the line treatment involved more complex treatment, for example, the provision of dentures. 2.4 Contemporaneously with the revision of the DTSS, the form of contract between the Health Boards and dental practitioners was revised and the revised terms introduced in December 1999 (the 1999 Revised Terms) continued to be applicable until the Circular referred to in the notice of motion issued at the end of April 2010. 2.5 There is a factual dispute between the parties as to the format of the operative version of the 1999 Revised Terms which, in due course, may or may not be material in the interpretation and determination of the contractual terms applicable between individual dental practitioners and the defendant prior to the Circular. That dispute cannot be resolved on this application. 2.6 The position of the defendant is that the correct form of the 1999 Revised Terms was that which accompanied a letter dated 23rd December, 1999 from the General Medical Services (Payments) Board to each participating dental practitioner. Under the heading “Treatment Ceiling/Patient Care Plan” in that document, the following text appeared:
The I.D.A. acknowledge that, in the light of the above, Health Boards have the right to take whatever measures are necessary to live within budget and statutory obligation. Prior approval will be necessary in all cases of below the line treatment (including dentures) and delivery. Treatment can be carried out on above the line treatments without prior approval. A patient care plan to be completed and submitted for each patient. In cases where prior approval is not required the patient care plan will be submitted with the claim. Where prior approval is required the patient care plan will be submitted in advance. Prior approval will continue to be required for treatment on all below the line treatments and dentures in accordance with the above. While awaiting approval, above the line treatments can be carried out.” 2.8 Another factual matter raised on the affidavit evidence is that a version of the 1999 Revised Terms executed by some participating dental practitioners did not include a termination clause. In any event, there was a termination clause in the 1994 Contract – clause 29. It provided:
(a) By giving to the other not less than 3 months prior notice in writing of intention to do so to the other and immediately after such termination the CEO may delete the contracting dentist’s name from the dental panel. Any dental letters and charts held by the contracting dentist prior to the expiration of such notice in respect of which the dental treatment has not been commenced shall be deemed to have been cancelled. Treatment which has been sanctioned may be completed.
2.9 The Circular was a response to an instruction contained in a letter dated 8th December, 2009 from the Department of Health and Children to the defendant. In that letter, the defendant was asked to “take immediate steps to give effect to the decision, in the context of Budget 2010, to impose a cash limit on expenditure” under the DTSS. The defendant was informed that it was estimated that expenditure on the DTSS would reach about €88m in 2009, compared to €63.4m in 2008, and that it had been decided to limit DTSS expenditure in 2010 to the 2008 level of €63m. 2.10 The Circular, which was dated 26th April, 2010, informed the participating dental practitioners of the Budget 2010 decision to limit expenditure under the DTSS to €63m and set out the defendant’s strategy, based on “2009 uptake levels”, to provide emergency dental care to eligible patients with a focus on relief of pain and sepsis, with additional care to be considered in exceptional or high risk circumstances. The Circular then set out in a schedule eleven items, which I understand to be variations of the then existing scheme. For example, it was provided that dentists would be reimbursed for one oral examination in respect of an eligible person in any 12 month period. Another example was that prophylaxis treatment was suspended until further notice. 2.11 The reaction of the IDA was that it did not recognise the Circular as legitimate. It advised its members in a communication of 29th April, 2010 not to recognise it and to continue to operate the DTSS as usual. Its solicitors, the solicitors who are acting for the plaintiffs in these proceedings, wrote to the defendant on 29th April, 2010, contending that the Circular constituted an attempt to unilaterally vary the terms of the DTSS and a purported unilateral breach of the DTSS. The response of the solicitors on record for the defendant in these proceedings, by letter dated 4th May, 2010, was to quote the second sentence in the first paragraph and the second paragraph of the extract from the 1999 Revised Terms quoted above and to contend that there was no basis whatsoever for the plaintiffs’ solicitors’ assertion that the Circular seeks to unilaterally amend the DTSS contract. Any breach of contract by the defendant was emphatically denied. By letter dated 6th May, 2010 the plaintiffs’ solicitors responded that the provisions quoted from the 1999 Revised Terms had been taken out of context, contending that they were “expressly referable to the Approvals Section of the Contract and relate solely to ‘below the line’ expenditure (i.e. expenditure on ‘below the line’ treatment items)”. The plaintiffs threatened proceedings seeking injunctive relief restraining the defendant from the alleged unilateral breach of the terms of the DTSS. 2.12 Subsequent correspondence passing between the defendant’s solicitors and the plaintiffs’ solicitors was relied on by the defendant at the hearing of the application as grounds for the Court refusing to grant interlocutory relief. Before outlining that correspondence, I think it is important to emphasise that a wide range of factual matters was raised on the affidavits which may have a bearing on the outcome of the substantive action but which, in my view, have no bearing on the entitlement of the plaintiffs to interlocutory injunctive relief. These included: interaction between the IDA and the Minister for Health and Children prior to the issuance of the Circular at the end of April 2010; the response on 11th February, 2010 of the defendant to the Department’s letter of 8th December, 2009; what has been variously described by the plaintiffs’ deponents as a “devastating critique” and as “internal … wranglings” in the reaction of the defendant’s Lead Principal Dental Surgeons to the Circular; the fact that the Department of Social Protection has restricted treatments under the Dental Treatment Benefit Scheme; and the reduction of payments to dental practitioners effected on foot of the regulations made under the Financial Emergency Measures in the Public Interest Act 2009 (the Act of 2009). 2.13 Another factor which has no bearing on the outcome of the application is the fact that, in their letter dated 6th May, 2010 to the defendant’s solicitors, the plaintiffs’ solicitors intimated that, in order to minimise costs for all parties, they proposed issuing proceedings on behalf of a representative sample of dental practitioners participating in the DTSS and sought an assurance from the defendant that it would be bound by the outcome of any hearing in relation to the representative sample. There has been no specific response to that request from the defendant. That is immaterial, because the only matter which is now before the Court is the interlocutory application in these proceedings. 3. Correspondence between the solicitors 3.2 The response of the plaintiffs’ solicitors, in their letter of 13th May, 2010, was that, in recognition of the prevailing economic climate, the IDA had, in the previous six months, repeatedly expressed its willingness to engage in negotiations with the defendant in relation to the DTSS, but the offer had not been taken up. Nevertheless, subject to a withdrawal of the Circular and a return to the status quo that existed prior to 28th April, 2010, the offer still stood. 3.3 Subsequently, an offer on behalf of the defendant to participate in mediation “to facilitate a constructive exchange of views in an attempt to resolve the issue” was rejected by the plaintiffs’ solicitors as being inappropriate. The defendant’s solicitors’ subsequent invitation of 31st May, 2010 for a direct meeting was met with a request of the same date from the plaintiffs’ solicitors that the defendant put “any formal proposals in writing that could be the basis for discussions”. The defendant’s solicitors characterised that last suggestion as being “unhelpful”, in their letter dated 4th June, 2010, which was an open letter, in which they suggested a meeting between the defendant and the IDA on a “without prejudice” basis in an attempt to achieve a resolution. While the plaintiffs’ solicitors intimated in their letter of 9th June, 2010 that their clients were open to “without prejudice discussions”, their position was that, pending a satisfactory resolution of the matters, the plaintiffs would continue with their application for interlocutory relief. As I have indicated at the outset, the hearing of the interlocutory application went ahead on 11th June, 2010.
4. Prohibitory or mandatory relief sought? 4.2 Both forms of relief claimed by the plaintiffs are framed as prohibitory relief – as orders restraining the defendant from acting in a particular way. As counsel for the plaintiffs acknowledged, both formulae essentially say the same thing and only one of the orders sought is necessary. What the plaintiffs are trying to achieve is to maintain the status quo ante which prevailed before the coming into effect of the terms of the Circular on 28th April, 2010. 4.3 Counsel for the defendant submitted that what the plaintiffs are seeking is, in effect, a mandatory injunction, in that what the plaintiffs seek is a restorative injunction to enforce the contract as it was before the changes introduced in the Circular became operable. Counsel for the defendant latched on to a phrase used by the second plaintiff in his grounding affidavit sworn on 10th May, 2010 in which the second plaintiff, having complained about the impact of the implementation of the terms of the Circular as a result of the manner in which it was implemented, averred that no notice was provided “for what is in effect termination of the 1999 [Revised Terms] as is required under the [DTSS]”. On the affidavit evidence it is quite clear that neither side to the contracts under the DTSS which are the subject of these proceedings, neither the relevant plaintiff nor the defendant, regards the relevant contract as terminated. What the plaintiffs seek is to enforce the contracts without the variations set out in the Circular. Nothing in the evidence suggests that the defendant intends to exercise its right to terminate in accordance with clause 29 and it is easy to understand why that is so. 4.4 In my view, the situation which arises here is not at all analogous to the type of situation with which the Supreme Court was concerned in Maha Lingam v. Health Service Executive [2006] E.L.R. 137, and with which the High Court was concerned in cases such as Bergin v. Galway Clinic Doughiska Ltd. [2008] 2 IR 205, in which, in an employment contract context, the court held that what was being sought by the plaintiff on an interlocutory application was, in substance, a mandatory order and the plaintiff had to establish a strong case that he or she was likely to succeed at the trial of the action. In the latter case, the following passage from the judgment of Clarke J. (at p. 216) summarised his conclusion on the Maha Lingam “strong case” test as follows:
(b) that damages would not be an adequate remedy for them, if the injunctive relief is refused and they are ultimately successful at the trial of the action; and (c) that the balance of convenience favours the grant of the injunction. 5. Fair issue to be tried? 5.2 In my view, there is undoubtedly a fair question to be tried as to whether, as a matter of contract, the defendant can unilaterally vary the terms of the involvement of dental practitioners in the DTSS, as it purported to do in the Circular. That is a matter of construction of the 1994 Contract, as revised by the 1999 Revised Terms. It falls to be determined in accordance with the principles laid down by the Supreme Court in Igote Ltd. v. Badsey Ltd. [2001] 4 IR 511, as applied by this Court (Finlay Geoghegan J.) in Hickey & Ors. t/a Hickeys Pharmacy v. Health Service Executive [2008] IEHC 290, now reported at [2009] 3 IR 156. Even if the defendant is correct in asserting that the format of the 1999 Revised Terms is as it contends and not as the plaintiffs contend, and even if this has some bearing on the proper construction of the contract, in my view, a fair question nevertheless arises as to whether, as a matter of construction, what the defendant has purported to do in imposing the terms in the Circular is permissible without the consensus of the other contracting party to a contract which was in place before the terms of the Circular were unilaterally imposed. Contrary to the submission made on behalf of the defendant, there is no onus on the plaintiffs on this application to show that the changes introduced in the Circular are disproportionate, arbitrary, or lacking in bona fides.
6. Damages an adequate remedy? 6.2 In response, Patrick Bourke, an Assistant National Director with the defendant, in his second affidavit sworn on 9th June, 2010, has expressed surprise at the plaintiffs’ averments and has averred that, as a result of an examination of the payments made to both plaintiffs’ practices up to the month of June 2010, “the level of these claims for the period (and, in particular, ‘Above The Line’ claims) since implementation of [the Circular] is at a level commensurate with the claims submitted for the first five months of 2010”. Mr. Bourke has suggested that the plaintiffs’ assertions are not borne out. When Mr. Bourke swore that affidavit, the Circular had been in place for approximately five weeks. In my view, the Court is entitled to take judicial notice of the fact that there is a time lag in submission by dental practitioners of claims under the DTSS. Quite frankly I consider the exercise performed by Mr. Bourke at this point in time to be of no probative value. 6.3 On the evidence, I am satisfied that, if it transpires that, as a matter of contract, the defendant was not entitled to impose the terms of the Circular on participating dental practitioners, the plaintiffs will probably suffer irreparable damage pending the trial of the action, because, on the evidence, the viability of the dental practice of each of them is at risk and each may be forced to close down the practice in the interim. Therefore, I conclude that damages would not be an adequate remedy.
7. Balance of convenience 7.2 While it is regrettable that the parties have not been in a position to resolve their differences by agreement and without the plaintiffs having to resort to litigation, the only issue for the Court is whether the plaintiffs have established an entitlement to interlocutory relief in accordance with the principles set out in the Campus Oil case. It follows from what I have identified as a fair issue to be tried in this case that there is an issue as to whether the defendant is acting in breach of the terms of its contractual relationship with the plaintiffs. It is not open to the Court to conclude that, in assessing where the balance of convenience lies, a relevant factor is that the plaintiffs should ignore that issue, abandon this litigation or, at any rate, this interlocutory application and enter into direct talks with the defendant or mediation. If it is the case that the plaintiffs are correct in their assertions that the imposition of the terms of the Circular is in breach of the contract between each of the plaintiffs and the defendant, notwithstanding the budgetary constraints under which the defendant, as a statutory body, must operate and is operating, it must comply with its contractual obligations and with the law and it cannot invoke the balance of convenience argument to override the law. 7.3 The plaintiffs have asserted that chaos now prevails in the DTSS as a result of the introduction of the Circular and that patients’ interests have been put in jeopardy. That is denied by the defendant. For the avoidance of doubt, neither the assertion nor the denial has informed the conclusion that the plaintiffs have established an entitlement to have the status quo ante maintained pending the trial of the action. That conclusion is based entirely on the impact of the introduction of the Circular on the plaintiffs’ contractual relations with the defendant.
8. Conclusion 8.2 Noting the undertaking as to damages given by each of the plaintiffs to the Court, there will be an order pending the trial of the action in the terms of paragraph 1 of the notice of motion restraining the defendant from giving effect or purporting to give effect to the Circular. 8.3 The Court will endeavour to facilitate the parties with an early trial of the action.
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