Scottish Court of Session Decisions

At advising, on 30th June 1989;—

LORD JUSTICE-CLERK (ROSS).—[After the narrative quoted supra his Lordship continued:] After hearing parties on the petition and answers, the Lord Ordinary sustained the first plea-in-law for the petitioner under deletion of the words "and/or an abuse of the respondents' power" and proceeded to reduce the decisions of the respondents dated 11th January 1989. It is against that decision of the Lord Ordinary that the reclaiming motion has now been taken.

On behalf of the respondents it was contended that the decision of the respondents was not amenable to judicial review under Rule of Court 260B and that the petition was accordingly incompetent. Alternatively it was submitted that, if the decision was susceptible to judicial review the Lord Ordinary had applied the wrong tests and in particular had failed to recognise that the proper test was whether in the circumstances a reasonable health board could reasonably have concluded that the petitioner was in material breach of his contract so that they were entitled to dismiss him summarily. They submitted that the Lord Ordinary had misdirected himself both as to the test to be applied in relation to summary dismissal, and also as to the test of unreasonableness if that indeed arose. Counsel intimated that they were no longer to argue that the petition was incompetent on the ground that the petitioner had failed to exhaust other remedies available to him.

The petitioner on the other hand maintained that the decision was amenable to judicial review since a matter of public law was present in the contract of service between the respondents and the petitioner. Counsel for the petitioner made it clear that the real complaint of the petitioner was that he had been dismissed summarily. They pointed out that what was sought was reduction of the respondents' decision to that effect; if reduction were granted it would then be open to the respondents to dismiss the petitioner upon notice, and if that course were followed the petitioner would then have a right of appeal to the Secretary of State in terms of para. 190 of the National Health Service Hospital Medical and Dental Staff Scotland—Terms and Conditions of Service (February 1987) (Revised). It should be observed that the petitioner does not aver bad faith on the part of the respondents.

The first matter to be determined is whether the petition is in the circumstances competent. In holding that the dismissal of the petitioner by the respondents was amenable to judicial review, the Lord Ordinary relied upon the terms of Rule of Court 260B and Malloch v. Aberdeen Corporation 1971 S.C. (H.L.) 85. He was also referred to R. v. East Berkshire Health Authority, ex p. Walsh [1985] QB 152, and to two Outer House cases in Scotland where that decision was applied. The Lord Ordinary expressed the view that the distinction in English law between public law and private law in this context did not necessarily apply in Scotland.

Rule of Court 260B contains inter alia the following provisions: [his Lordship quoted the terms of rule 260B (1) and (4) as set out supra and continued thereafter]. We were reminded that the origin of this rule is to be found in the speech of Lord Fraser of Tullybelton in Brown v. Hamilton District Council 1983 SC (HL) 1 at p. 43. Our attention was also drawn to the Report by the Working Party on Procedure for Judicial Review of Administrative Action under the chairmanship of Lord Dunpark. Counsel for the respondents suggested that it was legitimate to look at the report of the working party in order to identify the mischief to which the new rule of court was addressed. In my opinion, however, it is sufficient to have regard to what Lord Fraser of Tullybelton said in his speech in Brown v. Hamilton District Council . We were also referred, as was the Lord Ordinary to Forbes v. Underwood (1886) 13 R. 465, and to what Lord President Inglis said at p. 467 regarding the supereminent jurisdiction of the Court of Session. In my opinion, however, what is stated by Lord Fraser of Tullybelton is a sufficient explanation of what is meant by "the supervisory jurisdiction of the court":

"The supervisory jurisdiction over inferior courts and tribunals is vested exclusively in the Court of Session, as supreme court"

(p. 43). Under reference to Forbes v. Underwood Lord Fraser of Tullybelton added (at p. 44):

"I accordingly regard the passage that I have quoted as authority for two propositions relevant to this appeal; first, the Court of Session has a supervisory jurisdiction over decisions of administrative bodies such as local authorities, whether the decisions are administrative, judicial or quasi-judicial; and secondly, that supervisory jurisdiction is privative to the Court of Session and is not shared by the sheriff court."

Subsequently in his speech, Lord Fraser said (at p. 49):

"Secondly, it is for consideration whether there might not be advantages in developing special procedure in Scotland for dealing with questions in the public law area, comparable to the English prerogative orders. Now that the technical restrictions which previously applied to the prerogative orders have been removed by amendment of the rules of court in 1977, and by sec. 31 of the Supreme Court Act 1981, they have advantages over ordinary procedure such as declaration, particularly by making available remedies which are speedy and cheap and which protect public authorities from unreasonable actions, as explained by Lord Diplock in O'Reilly v. Mackman [1983] 2 AC 237. Similar advantage might possibly be derived in Scotland from reviving what Lord President Cooper in J. and J. v. C's Tutor 1948 S.L.T. 479 referred to at p. 481 as ‘obsolete advocation and obsolescent suspension’ as methods of review of decisions in the public law field, which are not subject to appeal to the court."

In the event, the remedy provided by Rule of Court 260B was not to revive advocation and suspension, but to utilise existing remedies such as reduction and declarator in an accelerated procedure. It is plain from the speech of Lord Fraser of Tullybelton that what he envisaged being introduced was a special procedure to deal with questions in the public law area.

Counsel for the respondents pointed out that in some cases stress has been laid upon the distinction between public and private law. It was pointed out that the supervisory jurisdiction of the Court of Session which enables it to provide certain remedies in the area of public law may also under private law enable it to review decisions taken by voluntary associations (McDonald v. Burns 1940 SC 376; St Johnstone Football Club Ltd. v. Scottish Football Association Ltd . 1965 S.L.T. 171 and Brentnall v. Free Presbyterian Church of Scotland 1986 S.L.T. 471). Although there was some discussion upon it, I am satisfied that in the present case it is not necessary to determine in any comprehensive way the scope of the Scottish procedure of judicial review under Rule of Court 260B. So far as the present case is concerned, counsel for the petitioner accepted that in order for the petitioner to succeed in this application he must be able to focus upon a matter of public law. In this context he regarded public law as synonymous with administrative law:

"Administrative law is concerned with the composition, procedures, powers, duties, rights and liabilities of the organs of central and local government and of other public authorities. More concisely, administrative law regulates the organisation, functions and powers of administrative officials and departments"

(Stair Memorial Encyclopaedia, Vol. 1, para. 201).

Accordingly, in determining whether or not the present petition is competent, the question is whether a matter of public law is raised in the application. Counsel for the respondents maintained that no issue of public law arose. The dismissal of the petitioner arose out of the private contractual relationship between him and the respondents as his employers. On the other hand, counsel for the petitioner maintained that there was a public law element in this case. They contended that a number of public law elements could be detected in this case, and the principal of these was that the appellant under the Hospital and Medical Dental Staff Scotland—Terms and Conditions of Service had a right to appeal against his dismissal to the Secretary of State, but that, by dismissing him, the respondents had effectively eliminated this. This it was said, injected the necessary public element into the situation to make the dismissal of the petitioner by the respondents susceptible to judicial review.

In the light of these submissions it is critical to examine the provisions of the National Health Service Hospital Medical and Dental Staff Scotland—Terms and Conditions of Service. It is matter of agreement between the parties that the petitioner's employment with the respondents is governed by inter alia para. 190 of the terms and conditions of service. (Art. 5 (vii) and ans. 5 (vii) of the petition and answers.) Paragraph 190 provides as follows: [his Lordship quoted the terms of para. 190 and continued thereafter]. This right of appeal under para. 190 is to be contrasted with the right to appeal under sec. 40–10 of the Whitley Council conditions of service since action on the latter is at the discretion of the Secretary of State.

The committee of inquiry were appointed by the respondents to conduct an inquiry into the professional conduct of the petitioner at Inverclyde Royal Hospital with a view to possible disciplinary action by the respondents against him. Their terms of reference required them to make findings on all relevant facts of the case in relation to certain specified matters, and to make a finding as to whether or not the petitioner was at fault in respect of all or any of these specified matters, and to explain the basis upon which their finding was reached. The committee of inquiry was set up in accordance with the guidance on the procedure to be followed in disciplinary cases contained in Scottish Hospital Memorandum No. 49/1968. In terms of para. 16 of the memorandum, it is provided that the terms of reference of a committee of inquiry should normally request that the report of the committee should contain recommendations as to disciplinary action but that the report should not contain such recommendations unless they have been specifically requested. In para. 18 it is provided that the report of the committee of inquiry should, if requested by the disciplinary authority, contain recommendations to the disciplinary authority as to disciplinary action but in no circumstances should the committee of inquiry itself be given disciplinary powers. The memorandum also makes it plain that "disciplinary authority" means the regional hospital board or board of management. In the present case the terms of reference did not request the committee of inquiry to include any recommendations as to disciplinary action in their report and accordingly the report contained no such recommendations. The Lord Ordinary in his opinion regarded para. 16 as of importance because the respondents had not asked the committee of inquiry to make recommendations, but before this court it was accepted that the respondents were fully entitled to refrain from requesting the committee of inquiry to make recommendations.

It is unnecessary in this opinion to narrate in detail the findings of the committee of inquiry. The Lord Ordinary has dealt with these in sufficient detail. However, the particular matters concerning the management of the case of Mrs Clarke upon which they were requested to make findings were:

"(a) that Mr Tehrani failed to attend the patient to examine her and to decide on clinical grounds whether the offer from Glasgow Royal Infirmary's vascular unit to take the patient should be accepted; (b) that he instructed that a laparotomy should be performed without any justifiable plan of action, knowing that a leaking aneurysm was likely to be found and that Mr Wishart would be unable to deal with this; (c) that if he felt that he himself was unable to deal with this lesion, he failed to ascertain whether a suitably qualified local colleague was available to operate on his behalf; (d) that by instructing the Surgical Registrar to close the abdomen he thus either (1) decided not to operate on a potentially remediable lesion; or (2) decided to subject the patient to a second laparotomy."

In their report, the committee of inquiry expressed their position in relation to these subheads as follows:

"(a) In the particular circumstances of this case it was a failure of professional duty by Mr Tehrani not to attend Inverclyde with a view to making a clinical examination in person of Mrs Clarke when considering how he should respond to the conditional offer by Glasgow Royal Infirmary's Vascular Unit; (b) While the instruction by Mr Tehrani that Mr Wishart perform a diagnostic laparotomy was part of a plan designed to satisfy the condition apparently though remarkably laid by Glasgow, it was not in the circumstances a justifiable plan of action. On the contrary, it was a wholly unjustifiable instruction which fell seriously below the standard to be expected of a Consultant Surgeon; (c) This subhead is truly an element of the situation which has been considered under subhead (b). It was unacceptable that in the circumstances a laparotomy be performed on Mrs Clarke at Inverclyde without the presence of a Consultant Surgeon. The presence of Mr Morrice was an alternative to the presence of Mr Tehrani. No assessment of fault separate from that made in (b) falls to be made; (d) Alternative (2) is simply a consequence of the matter described in (b) and requires no separate assessment. Alternative (1) has not been established and Mr Tehrani has not been found to be at fault on this aspect."

The committee of inquiry also made findings upon the matter of the petitioner's poor working relationships with consultant surgeon colleagues and upon steps which he had taken on the day following the death of Mrs Clarke to persuade a junior doctor to sign a statement. The committee of inquiry concluded that the petitioner must accept a significant degree of responsibility for the poor working relationships in the hospital, and they also held that he was wholly to blame for the exacerbation of the working relationship with Mr Morrice due to his then solicitor having made at the fatal accident inquiry an unfounded allegation against Mr Morrice. In addition they held that he was guilty of serious misconduct as regards the attempt to persuade his junior colleague to sign this statement.

Counsel for the petitioner made it clear throughout that his attack on the decision of the tribunal was not on the fact of dismissal as such but upon the mode of dismissal which was chosen. In particular, as already explained, counsel maintained that what was objectionable was that the dismissal was summary dismissal instead of dismissal after notice. The question then arises as to when an employer is entitled to dismiss a servant summarily without notice. In his opinion, the Lord Ordinary stated that there was no fixed rule of law which defined the degree of conduct which would justify dismissal or summary dismissal. Reference was made to Laws v. London Chronicle (Indicator Newspapers) Ltd . [1959] 1 W.L.R. 698. The Lord Ordinary then stated:

"Summary dismissal is dismissal on the spot and in my view it means that in the mind of the employers the conduct of the employee has been such as to make it intolerable for him to remain one moment longer at work."

Counsel for the respondents challenged that statement and maintained that the Lord Ordinary had misdirected himself as to the conditions which required to be present before summary dismissal could be justified. In my opinion, their criticism of the Lord Ordinary on this point is well-founded. Before this court counsel for both parties accepted that the true test which fell to be applied in the present case was whether a reasonable hospital board could reasonably have concluded that the petitioner was in material breach of his contract so that they were entitled to dismiss him summarily. Reference was made to Blyth v. Scottish Liberal Club 1982 SC 140. In that case at p. 149 Lord Dunpark said:

"If by words or deed one party to a contract demonstrates that he will no longer be bound by his contract, that is actual repudiation which entitles the other party at once to cancel or rescind the contract. But the remedy of cancellation is also given to a party who is not in breach of contract whenever the other party is in breach of an essential condition going to the root of the contract, even if the party in breach is willing to fulfil all his other contractual obligations. In such a case the innocent party may treat the breach of one essential condition as if the party in breach had repudiated all his unperformed contractual duties. He has not actually repudiated these but he is deemed to have done so because he is in breach of one material term or condition of his contract."

In all the circumstances, I am of opinion that the true test of whether summary dismissal is justifiable is not that expressed by the Lord Ordinary but is the test for which the respondents have contended in this reclaiming motion.

Counsel for the respondents then proceeded to maintain that the next question was whether the respondents were entitled to hold that the breaches of contract on the part of the petitioner were material breaches entitling them to rescind. In my opinion having regard to what the committee of inquiry held, and in particular what they found in (a) and (b) as set out above, they were clearly entitled to regard the petitioner as in material breach of his contract so as to entitle them to dismiss him summarily. As I understood it counsel for the petitioner did not dispute that this was so. But for the existence of para. 190. I understood counsel to accept that in the light of these findings the respondents would have been entitled to dismiss the appellant summarily. They further submitted however that they were not entitled to do so since the effect of doing so would be to eliminate the petitioner's right of appeal to the Secretary of State under para. 190. It was this loss of his right of appeal which counsel maintained introduced the necessary public element which rendered the decision reviewable by judicial review.

In my opinion, counsel for the petitioner were not well-founded when they contended that the respondents were not entitled to dismiss the appellant summarily since this would deny him his right of appeal to the Secretary of State under para. 190. In my opinion para. 197 expressly recognises the right of the respondents to terminate the petitioner's employment without notice provided that his conduct has been such as would enable them to dismiss him summarily at common law. Counsel for the petitioner recognised that the findings of the committee of inquiry were such as to entitle the respondents to treat the petitioner as in material breach of contract so as to entitle them to dismiss him summarily. In my opinion, since this right is expressly recognised in para. 197, it cannot be maintained that the effect of para. 190 is to prevent the respondents from exercising a power conferred upon them by para. 197.

Counsel for the petitioner founded strongly upon Malloch v. Aberdeen Corporation, as authority for the proposition that there was a public law element in this case. They contended that the relationship between the petitioner and respondents was not merely one of servant and master. That case concerned the need to observe the rules of natural justice. In his speech, Lord Wilberforce said (at p. 119):

"A comparative list of situations in which persons have been held entitled or not entitled to a hearing, or to observation of rules of natural justice, according to the master and servant test, looks illogical and even bizarre. A specialist surgeon is denied protection which is given to a hospital doctor; a university professor, as a servant, has been denied the right to be heard, a dock labourer and an undergraduate have been granted it; examples can be multiplied (see Barber v. Manchester Regional Hospital Board [1958] 1 W.L.R. 181; Palmer v. Inverness Hospitals Board 1963 SC 311; Vidyodaya University Council v. Silva [1965] 1 WLR 77; Vine v. National Dock Labour Board [1957] A.C. 488; Glynn v. Keele University [1971] 2 All E.R. 89). One may accept that if there are relationships in which all requirements of the observance of rules of natural justice are excluded (and I do not wish to assume that this is inevitably so), these must be confined to what have been called ‘pure master and servant cases’, which I take to mean cases in which there is no element of public employment or service, no support by statute, nothing in the nature of an office or a status which is capable of protection. If any of these elements exist, then, in my opinion, whatever the terminology used, and even though in some inter partes aspects the relationship may be called that of master and servant, there may be essential procedural requirements to be observed, and failure to observe them may result in a dismissal being declared to be void."

Counsel for the petitioner submitted that in the present case there was an element of public employment or service, and that the Scottish Hospital Memorandum No. 49/1968, although not a statute, is a document within the administrative process. Counsel relied upon what the Lord Ordinary said in his opinion where he identified six features as supporting the proposition that there was a public element in this case. The Lord Ordinary observed (1) that the respondents are constituted by Act of Parliament; (2) the board members are appointed by the Secretary of State; (3) the method of appointment of officers or servants of a health board and the qualification, remuneration and conditions of service of such persons are to be prescribed by regulation; (4) reg. 3 (2) of the National Health Service (Remuneration and Conditions of Service) (Scotland) Regulations 1974 (S.I. 1974 No. 276) deals with the situation where conditions of service have been the subject of negotiations by a negotiating body; (5) the respondents are a disciplinary authority operating under the Scottish Hospital Memorandum No. 49/1968; and (6) the memorandum is a circular laying down procedural requirements as does para. 190 of the conditions of service. The Lord Ordinary concluded that the fact that the conditions of service were not formally prescribed by statute or regulation did not affect the matter. He also observed that the court in England has held that it is prepared to take note of such circulars either for any legal effect they may have or as being subject to judicial review (Gillick v. West Norfolk and Wisbech Area Health Authority [1986] AC 112).

I agree with counsel for the respondents that merely to hold that a particular case is one where the principles of natural justice must be observed does not mean that the case is thereby elevated into the domain of public administrative law. In Malloch v. Aberdeen Corporation the power of dismissal was conferred by statute. The case was accordingly different to the present case. In my opinion the present case on its facts is much closer to R. v. East Berkshire Health Authority, ex p. Walsh. That case concerned the dismissal of a senior nursing officer for misconduct. The senior nursing officer was employed by a health authority under a contract which incorporated the Whitley Council agreement on conditions of service in the health service. He was dismissed by a district nursing officer for misconduct and applied for judicial review. The Court of Appeal held that the decision was not susceptible to judicial review. After considering the dictum of Lord Wilberforce in Malloch v. Aberdeen Corporation Sir John Donaldson M.R. stated at p. 164:

"Employment by a public authority does not per se inject any element of public law. Nor does the fact that the employee is in a ‘higher grade’ or is an ‘officer.’ This only makes it more likely that there will be special statutory restrictions upon dismissal, or other underpinning of his employment: see per Lord Reid in Malloch v. Aberdeen Corporation at p. 104. It will be this underpinning and not the seniority which injects the element of public law. Still less can I find any warrant for equating public law with the interest of the public. If the public through Parliament gives effect to that interest by means of statutory provisions, that is quite different, but the interest of the public per se is not sufficient."

Subsequently the Master of the Rolls said:

"The ordinary employer is free to act in breach of his contracts of employment and if he does so his employee will acquire certain private law rights and remedies in damages for wrongful dismissal, compensation for unfair dismissal, an order for reinstatement or re-engagement and so on. Parliament can underpin the position of public authority employees by directly restricting the freedom of the public authority to dismiss, thus giving the employee ‘public law’ rights and at least making him a potential candidate for administrative law remedies. Alternatively it can require the authority to contract with its employees on specified terms with a view to the employee acquiring ‘private law’ rights under the terms of the contract of employment. If the authority fails or refuses to thus create ‘private law’ rights of the employee, the employee will have ‘public law’ rights to compel compliance, the remedy being mandamus requiring the authority so to contract or a declaration that the employee has those rights. If, however, the authority gives the employee the required contractual protection, a breach of that contract is not a matter of ‘public law’ and gives rise to no administrative law remedies."

I respectfully agree with the foregoing reasoning of the Master of the Rolls. He concluded that there was no public law element in the applicant's complaints which could give rise to any entitlement to administrative law remedies. In the same way, and for the same reasons, I am satisfied in the present case that there are no public law elements in the petitioner's case which could give rise to any entitlement to a public law remedy such as judicial review. I do not regard the six features identified by the Lord Ordinary as justifying the conclusion that there is a public element in this case. I would accept that in dealing with the petitioner the respondents required to observe the rules of natural justice. However I agree with counsel for the respondents that that consideration is insufficient to elevate the contract into one within the domain of public administrative law. In my opinion despite the fact that the respondents are a board established by statute, the issue between them and the petitioner regarding his employment was essentially a matter of private law. If the petitioner is aggrieved by the decision of the respondents, he can pursue any remedies which are open to him under private law. He has the remedies described by the Master of the Rolls in Walsh. He is not, however, entitled to seek to have their decision reviewed by judicial review since the case does not fall within the ambit of public administrative law. Senior counsel for the petitioner sought to distinguish the case of Walsh upon the ground that the applicant there was seeking to quash his dismissal whereas the petitioner here was challenging only the fact that the dismissal was summary. I do not, however, regard that consideration as any justification for not adopting the reasoning of the Master of the Rolls in the passages cited. Walsh was in fact very similar to the present case; both were instances of contractual issues arising out of very similar contracts of employment.

I do not find it necessary to review all the cases which were cited to the court in argument. The petitioner relied to some extent upon Council of Civil Service Unions v. Minister for the Civil Service [1985] AC 374. Counsel for the petitioner maintained that that was a case of employer and employee, but it must be remembered that civil servants have no proper contract of employment; they hold their appointments at the pleasure of the Crown (per Lord Fraser of Tullybelton at p. 400). We were also referred to [the Outer House opinion in] Bank of Scotland v. Investment Management Regulatory Organisation Ltd . 1989 S. C. 107. This was a decision of Lord Cullen. The case was a very special one but meantime I would wish to reserve my opinion upon the question of whether that case was correctly decided.

For the foregoing reasons I am of opinion that the Lord Ordinary erred in concluding that the decision of the respondents was amenable to judicial review under Rule of Court 260B. Accordingly in my opinion the petition was incompetent. That is sufficient for the disposal of this reclaiming motion. However it is appropriate that I should express my views also upon the alternative submission advanced by the respondents. That alternative submission was to the effect that esto the petition was competent, the Lord Ordinary had applied the wrong tests, and in particular had failed to apply the proper test which was whether in the circumstances a reasonable health board could reasonably have concluded that the petitioner was in material breach of his contract so that they were entitled to dismiss him summarily.

In my opinion in his approach to this part of the case, the Lord Ordinary clearly erred. I have already concluded that the Lord Ordinary approached the issue of summary dismissal in the wrong way and that he was in error when he concluded that summary dismissal was justifiable only where in the mind of the employers the conduct of the employee had been such as to make it intolerable for him to remain one moment longer at work. In his opinion the Lord Ordinary went on to say:

"In my view the reasons for summary dismissal when compared with the alternative of dismissal with notice have to be particularly compelling. Moreover if the effect of summary dismissal is to cut out a practitioner's right of appeal, or if that possibility of that result exists in the minds of the board, the reasons must be overwhelmingly strong."

Subsequently the Lord Ordinary added:

"The question for examination was whether any board acting reasonably in the circumstances would have concluded that the only course to adopt was to dismiss him forthwith."

In my opinion in these passages the Lord Ordinary has clearly applied the wrong test. On the assumption that the familiar test of Wednesbury unreasonableness (Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1948] 1 KB 223) has to be applied, the proper approach is to ask whether a reasonable board could reasonably have concluded that the petitioner was in material breach of his contract so as to entitle them to dismiss him summarily.

For the petitioner stress was again laid in this connection upon the proposition that the respondents by summarily dismissing the petitioner had deprived him of his right of appeal under para. 190. As senior counsel put it, the deliberate or conscious elimination of the petitioner's right of appeal, although competent under the contract, amounted to an irrational exercise of power. He submitted that conduct on the part of the petitioner could only be regarded as sufficiently material to justify summary dismissal (and the loss of the petitioner's right of appeal) if it could be asserted that any reasonable Secretary of State on an appeal would have been bound to refuse the appeal or would have been unable to grant the appeal. In my opinion, this argument is unsound. For the reasons already advanced above, I have explained what the proper approach is to the issue of summary dismissal in a case such as the present case. Provided that the respondents could reasonably conclude that the petitioner was in material breach of his contract so as to entitle them to dismiss him summarily, they were not precluded from doing so merely because by being dismissed summarily the petitioner would be deprived of his right to appeal under para. 190.

In my opinion, the Lord Ordinary misdirected himself both as to the test to be applied in relation to summary dismissal and as to the test of unreasonableness if that arose. It follows that in my opinion the argument of the respondents must prevail both as to competency and as to the application by the Lord Ordinary of the proper tests in this case. I would accordingly move your Lordships to allow this reclaiming motion and to sustain the fourth plea-in-law for the respondents and to dismiss the petition. If I had not been in favour of dismissing the petition as incompetent, I would have been prepared to sustain the first plea-in-law for the respondents and to have dismissed the petition on the ground that the decision was neither unreasonable nor an abuse of the respondents' power. However since the petition is being dismissed as incompetent, there is no need to sustain any other plea-in-law.

LORD WYLIE .—On 15th January 1988 the petitioner was suspended by the respondents from all his duties as a consultant surgeon at Inverclyde Royal Hospital following a complaint arising from the management of a patient who had died there on the previous day. In due course the respondents, to whom I shall refer as "the board", appointed a committee of inquiry to investigate the petitioner's professional conduct in this connection with a view to possible disciplinary action being taken against him and this committee subsequently produced a report dated 6th December 1988. The board met on 11th January 1989 to consider the report and counsel who had represented the petitioner at the proceedings before the committee was afforded an opportunity to make a plea in mitigation. Thereafter, having resumed consideration of the report, the board decided by a majority to dismiss the petitioner summarily from their employment with effect from 5 p.m. that day, and the petitioner was immediately so informed.

The petition was brought to challenge this decision by way of judicial review. Reduction of the decision was sought, in terms of the pleas-in-law for the petitioner on the grounds that: (1) the decision was "unreasonable and/or an abuse of the respondents' power", and (2) that "The petitioner having had a legitimate expectation in the circumstances that the termination of his appointment would be considered by the Secretary of State for Scotland and said consideration being denied him by the respondents' decision … said decision should be reduced."

The board denied that the decision was unreasonable or an abuse of their power and challenged the competency of the petition on two grounds. The first of these grounds was that the petitioner had failed to exhaust the statutory and non-statutory remedies available to him and the second was to the effect that the decision was solely governed by the terms of the contract of employment between the parties and accordingly was not amenable to judicial review under Rule of Court 260B. By interlocutor dated 7th March 1989 the Lord Ordinary sustained the petitioner's first plea-in-law, under deletion of the words "and/or an abuse of the respondents' power" and reduced the decision. It is against that interlocutor that this reclaiming motion has been taken.

In the reclaiming motion the challenge to the competency of the petition was maintained, on the ground that the decision to dismiss summarily was a matter of private law governed by the terms of a contract between master and servant and as such was not amenable to judicial review. The argument that the petitioner had failed to exhaust other remedies open to him was not pursued. As an alternative argument to the primary submission on competency it was submitted that the Lord Ordinary had failed to apply the proper test in circumstances where material breach of contract had been established. I address myself to each of these two lines of argument in that order.

There is no question of course but that the parties were in the contractual relationship of employer and employee. In this situation the normal remedy open to an employee who has been dismissed is either an action of damages at common law for breach of contract, where this can be demonstrated, or proceedings under the Employment Protection Act 1978 which contemplates the broader concept of "unfair dismissal." The principles of public administrative law have no part to play because the issues raised are essentially matters of private law. In this instance however, so it was argued, there were elements of public law in the contract of employment and it was accepted by counsel for the petitioner that such elements had to be traced before a public administrative law remedy could be available.

Certainly there is a statutory background to the contract, and the Lord Ordinary lists these provisions in the course of his opinion in support of his decision to reject the argument that the petitioner's dismissal was not amenable to judicial review. The employers were constituted by Act of Parliament and the board members were appointed by the Secretary of State (National Health Service (Scotland) Act 1978, sec. 2 (1)). The method of appointment of officers or servants of a health board and the qualification, remuneration and conditions of service of such persons (who included the petitioner) were to be prescribed by regulations. In terms of reg. 3 (2) of the National Health Service (Remuneration and Conditions of Service) (Scotland) Regulations 1974 (S.I. 1974 No. 276) where conditions of service have been the subject of negotiation by a negotiating body, or have been approved by the Secretary of State, the conditions of service of any officer belonging to that class shall include the conditions so approved. The board was a disciplinary authority which operated under a circular emanating from the Scottish Home and Health Department which laid down procedural requirements and, in relation to the matter of an appeal to the Secretary of State, para. 190 of the conditions of service applied. It was on this last-mentioned requirement that counsel laid most stress. The provision falls under the general heading "Termination of Employment" and the subheading "Representations against dismissal." It provides, read short, as follows: [his Lordship quoted extensively from para. 190 and continued thereafter]. These provisions clearly relate to the situation where a decision to terminate the employment on notice has been made and in terms of para. 196 the contractual minimum period of notice, so far as the petitioner is concerned, was three months. It was this provision in particular which, it was submitted, introduced the element of public law which justified invoking review of the decision by judicial review procedure. Likewise, it was the conscious elimination of this right of appeal in the circumstances of the case which satisfied the test laid down by Lord Greene M.R. in the well-known passage in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1948] 1 KB 223 at p. 229. The formidable nature of this test is described by Lord Diplock as "a decision which is so outrageous in its defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at it" (Council of Civil Service Unions v. Minister for the Civil Service [1985] AC 374 at p. 410). Having quoted the provisions of paras. 190 and 196 it would only be appropriate to refer to the further qualifying provisions of para. 197, under the heading "Application of Minimum Periods", which is in these terms: [his Lordship quoted para. 197 as set out supraand continued thereafter]. This last-mentioned provision is highly significant in the context of the board's alternative submission.

The Lord Ordinary drew support for his view that the petitioner's dismissal was amenable to judicial review from a passage in the speech of Lord Wilberforce in Malloch v. Aberdeen Corporation 1971 S.C. (H.L.) 85 at pp. 118–119. In the relevant passage, his Lordship makes reference to the "risk of a compartmental approach which, though convenient as a solvent, may lead to narrower distinctions than are appropriate to the broader issues of administrative law." After citing examples of the apparently "illogical and even bizarre" situations which could result according to the master and servant test, his Lordship went on to say:

"One may accept that if there are relationships in which all requirements of the observance of rules of natural justice are excluded (and I do not wish to assume that this is inevitably so), these must be confined to what have been called ‘pure master and servant cases’, which I take to mean cases in which there is no element of public employment or service, no support by statute, nothing in the nature of an office or a status which is capable of protection. If any of these elements exist, then in my opinion, whatever the terminology used, and even though in some inter partes aspects the relationship may be called that of master and servant, there may be essential procedural requirements to be observed, and failure to observe them may result in a dismissal being declared to be void."

Counsel for the petitioner accordingly submitted that the presence of a contractual relationship did not per se preclude procedure by judicial review provided that a public law element arose.

The fact that the employer is a public body does not per seinject an element of public law into the contract of service, nor does the fact that the employee has the benefit of statutory provisions in relation to conditions of service. As Sir John Donaldson M.R. observed in R. v. East Berkshire Health Authority, ex p. Walsh [1985] QB 152 at p. 166, it would otherwise be open to all National Health Service employees to whom the Whitley Council agreement on conditions of service applied to seek judicial review. The facts in Walsh bear a close resemblance to those in the present case. It concerned the dismissal of a senior nursing officer employed by a health authority in terms of a contract which likewise incorporated the Whitley Council agreement on conditions and service, and the Court of Appeal held that the decision to dismiss was not amenable to judicial review. The applicant was seeking to enforce private contractual rights and accordingly his application was a misuse of the procedure for judicial review. The decision in Malloch's case was distinguished on the basis that the ratio of that decision was the fact that his entitlement to a hearing was a statutory provision implied in the principal statute regulating the relationship between education authorities and the teachers in their employment. It requires a particular statutory provision, expressly stated or plainly implied, to inject the element of public law which attracts the administrative law remedy. Purchas L.J. observed, at p. 176:

"There is a danger of confusing the rights with their appropriate remedies enjoyed by an employee arising out of a private contract of employment with the performance by a public body of the duties imposed upon it as part of the statutory terms under which it exercises its powers."

In the present case, after considering the various factors to which I have already referred, and under reference to para. 190 of the conditions of service, the Lord Ordinary concluded:

"The fact that the conditions of service and in particular the provisions governing dismissal procedure are not formally and directly prescribed by statute or regulation does not seem to me, in principle, to affect the matter."

With all respect to the Lord Ordinary it seems to me that he has confused the two quite distinct issues to which Purchas L.J. referred, although to be fair to the Lord Ordinary he expressly stated that he was declining to follow English authority in this field of law having regard to what he described as the distinctive origins and development of the remedies covered by judicial review in both countries. I think however that he was wrong to do so. The two procedures and the distinctive remedies provided are of course different but their purposes and the mischief for which they seek to provide remedies are the same in both jurisdictions. Judicial review procedure in Scotland springs from the observations in the speech of Lord Fraser of Tullybelton in Brown v. Hamilton District Council 1983 SC (HL) 1 at p. 49 where his Lordship suggested:

"it is for consideration whether there might not be advantages in developing special procedure in Scotland for dealing with questions in the public law area, comparable to the English prerogative orders."

Its purpose is to provide a simple form of procedure, capable of being operated expeditiously, for bringing before the court complaints in relation to the exercise of statutory or prerogative powers by the executive and public bodies. It is not concerned with private contractual rights and obligations. I agree with counsel for the respondents that there is no good reason for differences between the two jurisdictions to develop in this field and indeed that it would be regrettable if they did.

I have reached the conclusion that when the decision was taken to dismiss the petitioner the board was exercising rights arising out of a private contract of employment, and, notwithstanding the statutory background, it was not an exercise of powers conferred by statute. In such circumstances the issue is essentially a matter of private law and it is accordingly in my opinion not open to judicial review. It follows that I would allow the reclaiming motion.

As I have already indicated, an alternative argument was advanced on the esto basis that judicial review was competent and that the Wednesbury test of "unreasonableness" applied. I find some difficulty in applying this concept at all in the context of the common law relationship of master and servant and the notion underlying the petitioner's complaint that the manner of his dismissal was unfair carries with it echoes of the remedies available under the employment protection legislation. Be that as it may, if the concept applies at all it must in some broad sense be related to the materiality of the petitioner's own breach of contract. Indeed, it was on this aspect of the case that it became apparent how very narrow was the issue between the parties. It was conceded, as I understood it, that the petitioner was in material breach of contract and, having regard to the findings of the committee of inquiry it would be difficult to withhold such a concession. The petitioner's complaint was not the fact of his dismissal but the manner in which this had been done. In particular, by invoking the provisions of para. 197 (d), to which I have already referred, the board had deprived the petitioner of the right conferred by the provisions of para. 190, if he felt that his appointment had been "unfairly terminated", to appeal to the Secretary of State. It was the conscious elimination of this right of appeal which, in counsel for the petitioner's submission, constituted an irrational exercise of the board's powers and all that in effect was being sought was the reinstatement of this right by dismissal on notice.

LORD MURRAY .—The salient facts of the case and the contentions of the parties in the Outer House are set out by the Lord Ordinary in his opinion, supra. In the Inner House it was conceded for the petitioner that, for the purposes of this case, the respondent board (who are the reclaimers) were entitled to dismiss the petitioner from the office of consultant hospital surgeon in respect of material breach of contract by him. The petitioner does not complain that the board acted in bad faith. Before the Inner House the board did not argue their third plea-in-law to the effect that the petitioner had not exhausted the remedies already open to him.

The petitioner's central contention before the Lord Ordinary, and in the reclaiming motion, was that, although the board were entitled to dismiss him for breach of contract, they were not in the circumstances entitled to proceed by way of summary dismissal which, standing the accepted reading of the terms and conditions of his appointment, had the consequence of depriving him of an express right of appeal against dismissal to the Secretary of State for Scotland.

It was argued by the board both before the Lord Ordinary and in the reclaiming motion that the application by the petitioner for judicial review was incompetent in that the issue between the parties was essentially a matter of private law concerning breach of contract and not a public law issue of the kind which could attract the court's supervisory jurisdiction and so open the door to judicial review. At pp. 349–352 the Lord Ordinary considers the arguments and the cases cited to him and rejects the board's argument. At p. 352 he expands his reasons for concluding that the decision of the board in this case was amenable to judicial review. The Lord Ordinary then proceeds to examine the decision of the board on the basis essentially of the Wednesbury test of "reasonableness" (Associated Provincial Picture Houses v. Wednesbury Corporation [1948] 1 KB 223). At pp. 358–359 of his opinion he gives the reasons for his conclusion that the board acted unreasonably in opting for summary dismissal of the petitioner rather than dismissal with notice without giving any compelling reason for rejecting dismissal with notice (and so depriving the petitioner of a right which would otherwise be open to him to appeal to the Secretary of State for Scotland). Accordingly, at the stage of the first hearing on the petition and answers, he sustained the first part of the petitioner's first plea-in-law, repelled the pleas-in-law for the board and reduced their decision. It is against the interlocutor so doing that the present reclaiming motion is directed.

It was argued on behalf of the board in the reclaiming motion that the only real issue was whether the board were or were not entitled to dismiss the petitioner summarily for material breach of contract. Prima facie it was a matter to be resolved by the law of contract, and if the board were wrong, the petitioner's remedy was an action of damages. If so, reduction of the board's decision would be inappropriate as would an investigation into the reasonableness or otherwise of their decision-making process.

In essence the Lord Ordinary had accepted the petitioner's submission that this was not a simple master and servant case and that, in regard to dismissal on any ground, the petitioner was entitled to application of the rules of natural justice and to an appeal to the Secretary of State for Scotland. Unlike the Gillick case (Gillick v. West Norfolk and Wisbech Area Health Authority [1986] AC 112), however, the rights of members of the public were not affected by the board's decision. Nor was there a relevant public element in that part of the contract which was under consideration. The contractual right of summary dismissal had been expressly reserved and separated from the provisions for dismissal by notice in the terms and conditions of appointment. The petitioner was indeed entitled to the application of natural justice in regard to possible termination of his employment. But that required that he be given fair notice of the complaints against him and a reasonable opportunity to make representations on his own behalf. In fact he had had the benefit of two hearings and of inquiry by a committee into the complaints. It was a mistake to suppose, on the basis of R. v. East Berkshire Health Authority, ex p. Walsh [1985] QB 152 and Higgs v. Northern Regional Health Authority (The Independent, 5th April 1989; The Times, 7th April 1989), that these circumstances elevated the case into one of public administrative law for the purposes of judicial review and the application of the Wednesbury "reasonableness" test.

The Lord Ordinary had misread Lord Wilberforce's speech in Malloch v. Aberdeen Corporation 1971 S.C. (H.L.) 85 at p. 118. Lord Wilberforce was speaking about the rules of natural law as part of administrative law, not public administrative law. This was made clear in Walsh. Malloch had nothing to do with administrative public law as such; see p. 181 of Walsh. The Lord Ordinary had distinguished Walsh and rejected its modification of what was said in Malloch without proper consideration of the principles involved.

What was meant by the supervisory jurisdiction of the Court of Session? It was nowhere defined. There was no reason to equate it with the supereminent jurisdiction of the Court of Session or with its high equitable jurisdiction or nobile officium as in Forbes v. Underwood (1886) 13 R. 465. To understand the scope of Rule of Court 260B one had to look at the mischief which it was intended to redress. This was set out by the Dunpark committee in its report and was based, as was the reference to the committee, on Lord Fraser's comments in Brown v. Hamilton D.C . 1983 SC (HL) 1 at pp. 48 and 49. The reference in the rule to the court's supervisory jurisdiction must be read in the context of Lord Fraser's remarks which were clearly related to public law matters. It could be inferred properly from the foregoing that the object of introducing judicial review was not to provide an additional remedy for private law matters but to give the citizen a practical mode of redress not then open to him against abuse of power by the executive or by a public authority. Rule 260B fell to be interpreted in that restricted sense. The Lord Ordinary had identified an element of a public nature in this contract and so wrongly elevated it to the domain of public administrative law.

Judicial review was incompetent in this case both as a matter of form and of substance. The correct remedy under the law of contract for the petitioner was to sue for damages for wrongful dismissal not to seek reduction of the board's decision.

Alternatively if judicial review was competent, this could not by itself alter the law that material breach of contract justified summary dismissal in master and servant cases. It was sought to impose upon these common law rules the Wednesbury test of reasonableness. But why should this be done? This test had not previously been extended beyond the range of abuse of statutory power or of the royal prerogative and there was no reason to extend it to ordinary private contract law. The reclaiming motion should be allowed and the Lord Ordinary's interlocutor recalled.

In reply it was accepted for the petitioner that competency was just one side of the essential problem in the present case which was whether there was a public law remedy available to the petitioner here. As a matter of principle the supervisory jurisdiction of the Court of Session could embrace not only public law matters but also private law to control voluntary associations or clubs and ensure that they acted within their rules of jurisdiction. The court could intervene in the private law area as the case of McDonald v. Burns 1940 SC 376 illustrated. The Rule of Court did not expressly restrict its ambit to public law matters. But for the purposes of the present case the court did not have to choose between a restricted and a wider interpretation of the Rule of Court. The petitioner accepted that for the purposes of this case the question was whether the petitioner had the public law remedy for which he contended. If he failed to show that he had, the case would not be open to judicial review. The petitioner accordingly did not deny or concede the application of judicial review to cases such as Forbes or McDonald.

The board appeared to be contending that the existence of the master and servant contractual relationship took the present case out of the ambit of judicial review. But the existence of a master-servant relationship did not exclude per se a public element being present. The presence of that public element might or might not attract the remedies of judicial review. If there was such an element it need not apply judicial review to the whole area of the contract—it could apply only to the material public element. This was the inference to be drawn from the decided cases on the matter.

In ordinary breach of contract cases it would not be appropriate to provide a remedy by way of judicial review. But where a relevant public element was present then the conduct of the employer could be a relevant consideration and, if the other conditions were met, could provide a basis for judicial review. The case of Walsh could be distinguished because that was an attempt to have the court review the merits of an administrative decision. In the present case the petitioner was not asking the court to consider the merits of the board's decision to dismiss him summarily but to consider the propriety of the procedure which the board adopted with the effect of depriving the petitioner of his right to appeal to the Secretary of State for Scotland. The submission was that it was the duty of the board having regard to the terms and conditions of appointment as a whole, not only (1) to examine whether they had the right to dismiss the petitioner for breach of contract, but (2) to examine in accordance with the public law element introduced by para. 190 of the terms and conditions of appointment whether they would be justified in dismissing summarily under para. 197 and so depriving the petitioner of his right of appeal to the Secretary of State. The complaint was essentially the same as that of the pursuer in Malloch. The contention for the petitioner was that the board had opted for para. 197 rather than para. 190 procedure without giving any reason for so doing when there was a duty upon them to act reasonably in that regard. Their decision accordingly failed the Wednesburyreasonableness test. This argument did not appear to have been canvassed in Walsh.

The case of Malloch was and remained good law. The principles embodied in Lord Wilberforce's speech at p. 118 had not been overtaken by events or by any subsequent case. The presence of a relevant public law element opened the door to administrative remedies which enabled the court to intervene whether on the basis of natural justice or Wednesbury reasonableness. The present case had such a public law element in terms of Lord Wilberforce's dictum. The petitioner was involved in a public service based on statute. He had an office or status capable of protection which was given protection under para. 190 of the terms and conditions of service under which the Secretary of State was the ultimate appeal authority. It could not be said that the petitioner was acting in a private capacity in respect of the grounds upon which he was dismissed. [See also Walsh, p. 165E–F]. On this basis there was a genuine public element in the present case. Walsh was not authority for the proposition that because the petitioner had been dismissed for material breach of contract a public law remedy was excluded. The dicta of the appeal court judges in Walsh revealed some misconceptions about the case of Malloch; see, for instance, Purchas L.J. at p. 181E. Malloch could have been dealt with by way of judicial review. What the board did in knowingly depriving the petitioner of his right of appeal was unreasonable in the circumstances and there was no other remedy but judicial review whereby that right of appeal could be restored to him. An administrative remedy was open where, as in the present case, complaint was made of a procedural defect which could be cured thereby. [See Lord Diplock in Council of Civil Service Unions v. Minister for the Civil Service [1985] AC 374 at p. 410C]. In the circumstances here there was a positive duty upon the board to consider the implications for the petitioner of summary dismissal as distinct from dismissal under notice. In that situation it was only in the most extreme case that summary dismissal could be considered rational, for example if it could be said that any reasonable Secretary of State would be bound to refuse any appeal. It was open to the Secretary of State at least to consider whether some alternative to dismissal was appropriate. It was irrational for the board to go for the option which alone excluded consideration of alternative disciplinary action. The board were entitled, but did not have, to dismiss the petitioner summarily. [See Lord Dunpark in Blyth v. Scottish Liberal Club 1982 SC 140 at p. 148]. The decision of the board here was irrational in its context and it should not be allowed to stand. The remedy of reduction sought would restore the petitioner not to his employment but to a situation where by administrative means the Secretary of State could review the board's decision. The reclaiming motion should be refused and the Lord Ordinary's interlocutor allowed to stand.

As senior counsel for the petitioner accepted that the board's plea to the competency of the present petition was just the other side of the same coin as the petitioner's contention that there was a relevant public law element in the petitioner's contract which opened the door to an administrative remedy, it is no longer necessary for this court to decide between a restrictive and a liberal interpretation of Rule of Court 260B. It is with some relief therefore that I reserve judgment on this point. It would be unfortunate if this court had to decide upon that matter without a full consideration of the nature and scope of the supervisory jurisdiction which the Court of Session has exercised in the past and a more detailed consideration of the contents of the Dunpark committee report. I am not persuaded that the Lord Ordinary has been shown to be wrong in his approach to this aspect of the case. It is more difficult to support the line of reasoning thereafter by which the Lord Ordinary reached the conclusion which he did.

The Lord Ordinary appears to have assumed that the presence of para. 190 in the terms and conditions of service was sufficient to introduce an administrative element which imposed upon the board a duty to decide not only whether the petitioner's material breach of contract was serious enough to justify summary dismissal but also whether it was reasonable to exercise that option under para. 197 as that would have the effect of depriving the petitioner of his right of appeal under para. 190. In this he seems to assume, as does the petitioner's argument before this court, that there is a sufficient nexus between paras. 190 and 197 to prevent the terms of para. 197 being considered or operated in isolation. Yet the express terms of para. 197 seem to point the other way. Reservation of the parties' right to treat the contract as terminable without notice at common law appears to me to excise this provision from the context which might otherwise be set by para. 190 and so to exclude any nexus of the kind contended for by the petitioner. There is, I think, an intelligible justification for regarding the provisions of paras. 190 and 197 as separate and exclusive rather than as complementary. The appeal to the Secretary of State under para. 190 seems appropriate to cases, for instance, where professional conduct is called in question and the appropriate disciplinary action is under consideration. It may well be prudent in that field to have the Secretary of State able to review a decision and consider alternative measures to those decided upon by a board. Material breach of contract is, on the face of it, a legal matter raising issues which are wider than and may well be different from questions of professional competence. If for example a practitioner, though perfectly competent professionally, persistently failed to attend when he was supposed to be on duty or failed to fulfil his contractual duty in some other significant non-medical respect, it might well be appropriate for the board to hold him to have terminated his contract by such material breach and to dismiss him summarily. The decision of the board would rightly stand or fall according to the common law of contract. In the ordinary case it would be quite inappropriate for such a legal issue to be referred to the Secretary of State for his administrative review. In event of a dispute between the parties the latter should go to a court of law. The same result would of course follow in a case where the material breach of contract happened to relate to professional incompetence. If there is no legal restriction upon the board exercising their common law right to rescind a contract upon material breach in the one case there is little logic, it seems to me, in requiring it in the other. When the terms and conditions of service for the National Health Service were drafted for the authorities concerned it would have been open to the draftsman to exclude from the ambit of para. 197 (d) breach of contract based on professional incompetence. Had that been done the Secretary of State's oversight of dismissals for professional incompetence would have been complete. But as matters stand, in my view, the provisions of para. 190 do not qualify para. 197 (d).

I consider that the Lord Ordinary erred in his opinion, at p. 359, in adopting as the proper test of the issues in this case whether any board acting reasonably in the circumstances would have reached the conclusion that the only course open to it was summary dismissal of the petitioner. I agree with the board that the proper test is whether a reasonable board could reasonably have concluded that the petitioner had by his conduct repudiated his contract so entitling the board to dismiss him summarily. This issue is a pure matter of the law of contract without any public law element. As it is accepted for the purposes of the present proceedings that the board were entitled to hold the petitioner to have been in material breach of contract, the petitioner's case fails that test.

I agree with your Lordship in the chair that the reclaiming motion should be allowed, the respondents' fourth plea-in-law sustained and the petition dismissed.