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Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> PRIORY HEALTHCARE LIMITED AGAINST HIGHLAND HEALTH BOARD [2019] ScotCS CSOH_17 (20 February 2019)
URL: http://www.bailii.org/scot/cases/ScotCS/2019/[2019]_CSOH_17.html
Cite as: [2019] ScotCS CSOH_17, 2019 SLT 356, 2019 GWD 8-97, [2019] CSOH 17, 2019 SC 358
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OUTER HOUSE, COURT OF SESSION
[2019] CSOH 17
CA95/18
OPINION OF LORD BANNATYNE
In the cause
PRIORY HEALTHCARE LIMITED
against
HIGHLAND HEALTH BOARD
Pursuer
Defender
20 February 2019
Pursuer: Lindsay QC; Anderson Strathern LLP
Defender: Walker QC, Gardiner; Jones Whyte
Introduction
[1] This matter called before me for a debate in the commercial court at the insistence of
the defender.
[2] The defender sought dismissal of the action in terms of its first and second
pleas-in-law which were pleas respectively attacking the relevancy and specification of the
pursuer’s action.
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2
Background
[3] The pursuer is an independent healthcare provider. It has a number of facilities
across the United Kingdom including a hospital and rehabilitation facility in Woking,
England (“the pursuer’s facility”). The defender is the health board for the Highland area.
It was not disputed by the defender that for the purposes of section 25 of the Mental Health
(Care and Treatment) (Scotland) Act 2003 (“the 2003 Act”) it is a “local authority”.
[4] Mrs AB (“the patient”) prior to voluntarily leaving Nairn in or about early
October 2016 was ordinarily resident there. She was at that time under the care of the social
work department and the community health team. Said care was being provided in terms of
section 25 of the 2003 Act.
[5] In or about early October 2016 the patient on her own volition took a taxi to
Cambridge. On 2 October 2016 she was initially admitted to Addenbrookes Hospital,
Cambridge. She was assessed at the time as being a vulnerable adult at risk of self-neglect
due to non-compliance with medication and delusional beliefs. She was transferred to the
pursuer’s facility on 7 October 2016 by NHS Cambridgeshire (“Cambridge”) who managed
Addenbrookes Hospital.
[6] On or about 7 October 2016 a funding agreement (“the contract”) in respect to the
patient was entered into by Cambridge and the pursuer. Said document makes no reference
to the defender.
[7] The patient when admitted to Addenbrookes Hospital on 2 October 2016 was
detained under the Mental Health Act 1983 (“the 1983 Act”). She remained subject to said
detention order until 31 October 2016. Since that date she has remained at the pursuer’s
facility.
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3
[8] Sometime after her transfer to the pursuer’s facility the defender started paying
without challenge the pursuer’s invoices in respect of the patient. This continued until
25 April 2017. At this point the defender advised the pursuer that it would not pay fees
incurred by the patient after 31 April 2017.
The issue
[9] The dispute between the parties in summary is this: despite the defender expressly
stating that it would not pay fees in respect of the patient incurred after 31 April 2017 the
pursuer contends that the defender is contractually obliged to meet the continuing cost of
the patient’s care. The cost of that care is £540.00 per day. The defender denies that it is
contractually bound to meet the said charges. The issue at debate was in short this: were
the pursuer’s averments anent first contract formation and secondly the contended for
implied term (which I set out in full later in this opinion) irrelevant and separately lacking in
specification?
The pursuer’s case
[10] In summary the pursuer’s case as to how the defender’s obligation to make payment
arose was this: it had three strands, the primary case was in contract and based on agency,
the case in agency was pled in this way:
[11] The contract “was entered into by NHS Cambridgeshire on behalf of [the
defenders]…”
[12] The second strand, was a fall-back position founded on adoption and was pled in
this way:
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4
“The defender adopted and ratified the funding agreement by accepting all of the
obligations imposed by the funding agreement and by paying the agreed cost of care
for the patient without challenge until 25 April 2017.”
[13] There was a third strand, being a further fall-back position, in this instance based on
personal bar and founded in particular on the following averments:
“…the defender is personally barred from now disputing its contractual liability to
make payment for the patient’s cost of care under the funding agreement.”
[14] Thereafter on the basis of the contract thus formed the pursuer contended that a term
as follows was implied into the contract:
“That [the Contract] could not be terminated by the defender if such termination
breached the statutory duties that it owed to the patient under section 25 of the
2003 Act and would place her at material risk of harm [‘the implied term’].”
[15] Mr Walker in his note of argument advanced detailed arguments in respect to the
relevancy of each of the said three strands of the pursuer’s case regarding contract
formation. In addition he advanced substantial criticisms in respect to the relevancy of the
implied term.
[16] The pursuer’s principal response in respect to the contract formation arguments
advanced by Mr Walker was a short one, and is perhaps best summarised at paragraph 25 of
Mr Lindsay’s note of argument:
“…the defender’s lengthy criticisms of the pursuer’s averments relating to agency,
adoption, ratification and personal bar are nothing to the point. All these averments
relate to the formation of the contract between the parties. As the defender, in
substance and effect, admits that there was a contract between the parties this is not a
matter that is truly in dispute between the parties. It is the existence of the implied
terms and whether or not the defender can terminate the contract in the
circumstances averred by the pursuer that are in dispute between the parties.”
[17] In addition to the above the pursuer advanced a short argument to the effect that in
any event the averments were sufficient to found a case of agency of necessity. The
pursuer’s argument in brief was that when Cambridge entered into the contract with the
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pursuer it was acting as an agent of necessity for the defender. Thus the contract was
entered into on behalf of the defender. Mr Lindsay did not seek to advance any argument in
response to the criticisms of the pursuer’s case so far as founded on adoption or personal
bar.
[18] Given the pursuer’s position regarding contract formation I believe it appropriate to
set out first the detailed submissions of the pursuer in support of its position on this issue
and thereafter to look at the position developed by Mr Walker in response to this.
The pursuer’s position regarding contract formation
[19] Mr Lindsay commenced his submissions by submitting that to understand the
pursuer’s position it was necessary to consider the defender’s obligations in respect to the
patient in terms of statute as this provided the essential background. The starting point for
any such analysis is section 25 of the 2003 Act. It provides as follows:
“(1) A local authority –
(a) shall –
(i) provide, for persons who are not in hospital and who have or
have had a mental disorder, services which provide care and
support; or
(ii) secure the provision of such services for such persons; and
(b) may –
(i) provide such services for persons who are in hospital and who
have or have had a mental disorder; or
(ii) secure the provisions of such services for such persons.
(2) Services provided by virtue of subsection (1) above shall be designed to –
(a) minimise the effect of the mental disorder on such persons; and
(b) give such persons the opportunity to lead lives which are as normal as
possible.
(3) In subsection (1) above, ‘care and support’ –
(a) includes, without prejudice to the generality of that expression –
(i) residential accommodation; and
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(ii) personal care and personal support (each of those expressions
having the meaning given by [paragraph 20 of schedule 12 to
the Public Services Reform (Scotland) Act 2010)]; but
(b) does not include nursing care.”
[20] Applying this section to the circumstances of the present case Mr Lindsay submitted
that when the patient was resident in Nairn, the defender provided care and support to the
patient for her mental disorder under and in terms of section 25(1)(a)(i). Thereafter, the
patient moved to the pursuer’s facility, the defender secured the provision of care and
support services by the pursuer in accordance with section 25(1)(a)(ii) of the 2003 Act.
Section 25(3)(a)(i) makes clear that securing such care and support may also include
residential accommodation.
[21] Although Cambridge was entered as the “responsible CCG” in the funding
agreement, the defender continued to accept responsibility for the patient and paid all
invoices for her care until 25 April 2017. These payments were made by the defender in
fulfilment of the duties imposed upon it by section 25(1)(a)(ii) of the 2003 Act. There is no
other statutory provision that would enable the defender to make such payments to the
pursuer. The defender as a statutory body has no powers to make an ex gratia payment to a
private body such as the pursuer. Accordingly it followed that there must have been a
contractual relationship between the pursuer and the defender founded upon the foregoing
section of the 2003 Act.
[22] The defender admitted on record that it made payments to the pursuer in respect of
the patient until April 2017 and they clearly establish that there is a contract between the
pursuer and defender in respect of the patient.
[23] Moreover, the defender’s payment of the invoices until April 2017 was in accordance
with the provisions of the Care Act 2014 (“the 2014 Act”).
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[24] In particular Mr Lindsay relied on the provisions contained in schedule 1
paragraph 3 of the 2014 Act which provide:
“(1) Where a local authority in Scotland is discharging its duty under section 12 or
13A of the Social Work (Scotland) Act 1968 or section 25 of the Mental Health (Care
and Treatment) (Scotland) Act 2003 by securing the provision of accommodation in
England, the adult in question is not to be treated for the purposes of this Part of this
Act as ordinarily resident anywhere in England.”
[25] Mr Lindsay’s position was that the above ensured that where a local authority in
Scotland placed an adult in residential accommodation in England, in general, this does not
result in the transfer of that authority’s responsibility for that adult.
[26] Accordingly it was his position that the effect of the above provision in the present
case was that the defender remains responsible for the provision of care and support
services to the patient in fulfilment of its duties imposed by section 25 of the 2003 Act and
that this statutory responsibility is unaffected by her transfer to the pursuer’s facility. The
patient is deemed to remain ordinarily resident in Highland and any duties that Cambridge
would otherwise have owed to the patient are dis-applied.
[27] Mr Lindsay then moved to consider the Care and Support (Cross Border Placements
and Business Failure: Temporary Duty) (Dispute Resolution) Regulations 2014 (“the
2014 Regulations).
[28] The particular provision upon which Mr Lindsay relied was in terms of Regulation 5
which provides:
“(1) The authorities which are parties to a dispute must not allow the existence of
the dispute to prevent, delay, interrupt or otherwise adversely affect the meeting of
the needs of the adult (‘the adult’) or carer to whom the dispute relates.
(2) This paragraph applies where a dispute concerns –
(a) section 48(2), 50(3) or 51(3) of the Act (temporary duty to meet needs);
or
(b) any of paragraphs 1 to 4 of Schedule 1.
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(3) Where paragraph (2) applies –
(a) the authority which is meeting any needs for accommodation of the
adult on the date on which the dispute arises must continue to meet
those needs; and
(b) if no authority is meeting those needs as at that date, the authority in
whose area the adult is living as at that date must do so from that
date.
(4) The duty under paragraph (3) must be discharged until the dispute in
question is resolved.
(5) The meeting of an adult’s needs by an authority pursuant to paragraph (3)
does not affect the liability of that authority or any other authority for the
meeting of those needs in respect of the period during which those needs are
met.”
[29] On the basis of the above provision it was his position that the responsibility for the
patient remains with the defender pending the determination of any dispute between it and
Cambridge. In addition he relied on Regulation 8 which provides:
“8. Stage at which dispute must be referred
If the authorities which are parties to a dispute cannot resolve the dispute between
themselves within four months of the date on which it arose, they must refer it for
determination to the appropriate Responsible Person or, in a case within regulation
2(6), to all persons who are Responsible Persons in relation to the authorities in
dispute.”
[30] Thus in the absence of any agreement with Cambridge, the defender could not
unilaterally relinquish responsibility for the patient and is obliged to refer the dispute to the
responsible person for determination within 4 months of the dispute arising.
[31] It follows from the above that if the defender considers that the patient is no longer
ordinarily resident in Highland for the purposes of section 25 of the 2003 Act and that
Cambridge has become responsible for the provision of care and support for the patient it is
incumbent upon the defender to request that Cambridge assumes responsibility for the
patient. If the defender is dissatisfied with the response to any such request it requires to
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9
invoke the dispute resolution procedures within the 2014 Regulations. The pursuer is
unaware of any such request.
[32] In conclusion having regard to the entire statutory background as above explained,
the defender remains responsible for the patient and is subject to the duties imposed by
section 25(1)(a)(ii) of the 2003 Act. The defender cannot release itself from its said
obligations to the patient without reference to the 2014 Regulations.
[33] The patient’s refusal of the care package provides no lawful basis for doing so. The
refusal of the offer of a care package in Nairn, by a woman who suffers from dementia,
schizophrenia and delusions, does not entitle the defender to effectively wash its hands of
the patient and to abandon her to her fate of homelessness without any care and support. It
would be a ludicrous and absurd interpretation of section 25 of the 2003 Act if that were so.
Such a callous and inhumane outcome cannot have been the intention of Parliament.
[34] Mr Lindsay then, against that statutory landscape moved to consider the defender’s
contractual obligations and in particular the issue of contract formation.
[35] The primary argument Mr Lindsay advanced was this: the cumulative effect of the
defender’s admissions and positive averments in the defences is an acceptance that the
defender and the pursuer were in a contractual relationship in respect to the provision of
care to the patient from 7 October 2016 to 25 April 2017. In answer 8 the defender admits
“that invoices were issued by the pursuer to, and paid by, the defender without challenge
until 25 April 2017”. The admission that invoices, for the cost of the care of the patient, were
paid by the defender without challenge given that it has no power to make donations or ex
gratia payments is, in substance and effect an admission that there was a contractual
obligation to do so.
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10
[36] Beyond that, the admission made by the defender that the invoices were not
challenged amounted to an implicit admission that the amount invoiced was the agreed
contractual sum. Lastly, the acceptance of a contract between the parties can also be seen in
the carefully drafted nature of many of the defender’s averments. For example, in answer 8
it is averred that “the defender incurred no contractual liability to the pursuer regarding [the
patient’s] care from 30 April 2017 onwards”. Significantly, there is no averment the
defender had no such contractual liability prior to 30 April 2017.
[37] It flowed from the above averments on behalf of the defender that when the
relevancy of the pursuer’s averments relating to the contract between the parties is being
assessed by the court, it requires to be carried out on the basis that, in substance, there is no
dispute between the parties that they were in a contractual relationship from 7 October 2016
to 25 April 2017. Thus what is in dispute between the parties is not whether there was a
contract between them, but whether the defender could unilaterally terminate the contract
with effect from on or about 25 April 2017.
[38] As a fall-back position Mr Lindsay submitted that in any event the pursuer’s
averments, relating to agency and the constitution of the contract between the parties, were
relevant and provided adequate and reasonable specification. It was his position that it was
obvious from these averments that an agency of necessity was created by the patient’s
emergency admission as a consequence of her urgent need for medical assistance. This he
submitted was a category of agency long recognised by the common law.
[39] The general principles as regards formation of an agency of necessity were identified
where he opines:
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“That there exists in the common law a principle of necessity which may justify
action which would otherwise be unlawful is not in doubt. But historically the
principle has been seen to be restricted to two groups of cases, which have been
called cases of public necessity and cases of private necessity. The former occurred
when a man interfered with another man’s property in the public interest – for
example (in the days before we could dial 999 for the fire brigade) the destruction of
another man’s house to prevent the spread of a catastrophic fire, as indeed occurred
in the Great Fire of London in 1666. The latter cases occurred when a man interfered
with another’s property to save his own person or property from imminent danger –
for example, when he entered upon his neighbour’s land without his consent, in
order to prevent the spread of fire onto his own land.
There is, however, a third group of cases, which is also properly described as
founded upon the principle of necessity and which is more pertinent to the
resolution of the problem in the present case. These cases are concerned with action
taken as a matter of necessity to assist another person without his consent. To give a
simple example, a man who seizes another and forcibly drags him from the path of
an oncoming vehicle, thereby saving him from injury or even death, commits no
wrong. But there are many emanations of this principle, to be found scattered
through the books. These are concerned not only with the preservation of the life or
health of the assisted person, but also with the preservation of his property
(sometimes an animal, sometimes an ordinary chattel) and even to certain conduct
on his behalf in the administration of his affairs. Where there is a pre-existing
relationship between the parties, the intervenor is usually said to act as an agent of
necessity on behalf of the principal in whose interests he acts.”
[40] It was in the third category identified by Lord Goff that Mr Lindsay said the present
case, on the averments made on behalf of the pursuer, clearly fell.
[41] Lastly, turning to the question of specification, he submitted that in circumstances
where the defender is fully aware of the nature of its relationship with Cambridge and has
chosen not to aver on record the nature of this relationship no criticism can be made of the
degree of specification provided by the pursuer’s pleadings on this issue.
[42] In a further chapter of his submissions Mr Lindsay referred to the defender’s duty to
act intra vires. In particular he said this in his written submissions:
“28. The defender’s ability to terminate its contract with the pursuer is constrained
by the statutory duties which are incumbent upon it. The defender is a
statutory body. Unlike the Crown it does not have any common law powers.
The defender can only act in accordance with its statutory powers. If it acts in
a way which breaches its statutory duties or in circumstances where it has no
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statutory power to do a particular act, it would be acting ultra vires and any
such act would be unlawful.
29. In the present case, terminating the contract for the provision of care to the
Patient in circumstances where: (i) no adequate arrangements had been made
for her safe return to Nairn; (ii) no accommodation was available for the
Patient in Nairn as she had lost her tenancy due to her long absence from the
property; (iii) no care package was in place for the Patient in Nairn because
of this loss of accommodation; (iv) no other local authority had accepted
responsibility for providing care to the Patient; (v) no family members were
willing or able to look after the Patient; (vi) the Patient’s reasons for not
wishing to return to Nairn are delusional; and (vii) the undisputed medical
evidence was that the Patient was ‘at considerable risk of harm without a
very full support package on discharge from hospital care’; would be a clear
breach of the duties owed by the defender to the Patient under and in terms
of section 25 of the 2003 Act.”
The defender’s response in respect to contract formation
[43] Mr Walker maintained his position that the pursuer’s pleadings in respect to this
matter were irrelevant.
[44] He first turned to the issue of the statutory background.
[45] He made three, sharp points. First, that at all relevant points Cambridge was
fulfilling its statutory obligations in terms of sections 2 and 3 of the Mental Health (Scotland)
Act 1983 (“the 1983 Act”).
[46] Sections 2 and 3 provide as follows:
“2. Admission for assessment
(1) A patient may be admitted to a hospital and detained there for the
period allowed by subsection (4) below in pursuance of an application
(in this Act referred to as ‘an application for admission for assessment’)
made in accordance with subsections (2) and (3) below.
(2) An application for admission for assessment may be made in respect
of a patient on the grounds that –
(a) he is suffering from mental disorder of a nature or degree
which warrants the detention of the patient in a hospital for
assessment (or for assessment followed by medical treatment)
for at least a limited period; and
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(b) he ought to be so detained in the interests of his own health or
safety or with a view to the protection of other persons.
(3) An application for admission for assessment shall be founded on the
written recommendations in the prescribed form of two registered
medical practitioners, including in each case a statement that in the
opinion of the practitioner the conditions set out in subsection (2)
above are complied with.
(4) Subject to the provisions of section 29(4) below, a patient admitted to
hospital in pursuance of an application for admission for assessment
may be detained for a period not exceeding 28 days beginning with
the day on which he is admitted, but shall not be detained after the
expiration of that period unless before it has expired he has become
liable to be detained by virtue of a subsequent application, order or
direction under the following provisions of this Act.
…
3. Admission for treatment.
(1) A patient may be admitted to a hospital and detained there for the
period allowed by the following provisions of this Act in pursuance of
an application (in this Act referred to as ‘an application for admission for
treatment’) made in accordance with this section.
(2) An application for admission for treatment may be made in respect of
a patient on the grounds that –
(a) he is suffering from [mental disorder] of a nature or degree
which makes it appropriate for him to receive medical
treatment in a hospital; and
[…]
(c) it is necessary for the health or safety of the patient or for the
protection of other persons that he should receive such treatment and
it cannot be provided unless he is detained under this section [;and]
[
(d) appropriate medical treatment is available for him.
]
(3) An application for admission for treatment shall be founded on the
written recommendations in the prescribed form of two registered
medical practitioners, including in each case a statement that in the
opinion of the practitioner the conditions set out in subsection (2)
above are complied with; and each such recommendation shall
include –
(a) such particulars as may be prescribed of the grounds for that
opinion so far as it relates to the conditions set out in
paragraphs (a) and [(d)]of that subsection; and
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(b) a statement of the reasons for that opinion so far as it relates to
the conditions set out in paragraph (c) of that subsection,
specifying whether other methods of dealing with the patient
are available and, if so, why they are not appropriate.
[
(4) In this Act, references to appropriate medical treatment, in relation to
a person suffering from mental disorder, are references to medical
treatment which is appropriate in his case, taking into account the
nature and degree of the mental disorder and all other circumstances
of his case.”
[47] The patient’s admission to Addenbrookes was compulsory in terms of the above
provisions. When she was transferred by Cambridge to the pursuer’s facility she continued
to be detained in terms of the above provisions. She continued to be detained in terms of the
said provisions until 31 October. Thus the accommodation at the pursuer’s facility was
secured by Cambridge in fulfilment of its obligations in terms of the above provisions of the
1983 Act.
[48] Secondly, it was important to note that in terms of section 25(1)(b)(ii) of the 2003 Act
there is no absolute obligation for a local authority such as the defender to provide care and
support services to a relevant person who is in hospital. Rather in terms of
section 25(1)(b)(ii) the wording is that the local authority “may” secure the provision of such
services. At the date of entry into the contract the patient was in hospital.
[49] Thirdly, it was Mr Walker’s submission that on a proper reading of paragraph 3(1) of
the 2014 Act it applied where a local authority made a decision to fulfil its obligations in
terms of section 25 by securing the provision of accommodation in England and transferred
the patient to that accommodation in England. What the section did not cover was the
situation in the present case.
[50] Thus he submitted that the statutory background did not support the relevancy of
the pursuer’s position in respect to the issue of contract formation.
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15
[51] Turning to the issue of agency Mr Walker argued that generally there were no
relevant averments of agency made on behalf of the pursuer.
[52] It was his general position that the pursuer failed to make any averments supporting
its contention that Cambridge was the defender’s agent. There was no basis on which the
court could infer that it was. In particular he, in his written argument, made three points in
support of his above position as follows:
“i. No averments of any contact – much less agreement – between Highland HB
and NHS Cambridgeshire prior to the Funding Agreement whereby the latter
was appointed to act as the former’s agent or that the latter agreed so to act.
ii. No averments that Highland HB gave NHS Cambridgeshire express or
ostensible authority or that the latter ever purported to be acting for and on
behalf of the former.
iii. No averments that Highland HB was even aware of the Funding Agreement
at the time it was entered into nor that The Priory was aware of there being
any connection between the Patient and Highland HB.”
[53] In respect to the specific type of agency which Mr Lindsay had submitted was
created, it was Mr Walker’s position that:
In securing the patient’s place in the pursuer’s facility Cambridge was not
discharging obligations incumbent on the defender, for the reasons he had earlier
argued. No agency of necessity thus was created.
In any event the necessary elements for the creation of an agency of necessity
were not present. In the circumstances as averred there was no urgency. When
the contract was entered into and the accommodation was secured some days
had passed after the patient had been detained by Cambridge. In these
circumstances there were no circumstances justifying Cambridge acting without
the authority of the defender.
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16
Moreover, the pursuer’s argument conflated the position of the defender and the
patient. In order for there to be an agency of necessity created the defender had
urgently to require Cambridge to act not the patient.
Thus he argued that the averments anent agency of necessity being created were
irrelevant.
[54] In respect to the argument that there was an implied admission on the part of the
defender that a contract had been formed Mr Walker argued that this was not correct. He
submitted that on a fair reading of the pleadings the defender clearly denied the formation
of the contract. He also strenuously denied that there was any lack of candour in the
pleadings on behalf of the defender. In respect to this matter he particularly relied on the
following averment made in answer 4 at page 9 of the record:
“Explained and averred that there was no contract between the defender and the
pursuer in terms of any funding agreement entered into between the pursuer and
NHS Cambridgeshire.”
He argued that given the above averment it could not be held that the defender had
admitted the existence of the contract.
Discussion
[55] I initially found the arguments, very powerfully and eloquently advanced by
Mr Lindsay, in respect of the primary issue of contract formation to be attractive ones.
However, I believe, that on detailed consideration they have a number of fundamental
flaws.
[56] First, it is Mr Lindsay’s position that the defender entered into the contract in
fulfilment of the duties imposed upon it by section 25(1)(a)(ii) of the 2003 Act, which
obligation can include the securing of residential accommodation (see: section 25(3)(a)(i)).
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17
[57] Section 25(1)(a)(ii) of the 2003 Act provides for care and support to be secured by a
local authority for those: “who are not in hospital”. However, at the date of entry into the
contract the pursuer was in Addenbrookes Hospital and was being transferred from there to
the pursuer’s facility. Accordingly, the actings of Cambridge which the pursuer contends
were in fulfilment of the defender’s obligations in terms of section 25(1)(a)(ii) could not on
that simple basis have fallen within the ambit of that provision.
[58] Rather the position of persons “who are in hospital” is dealt with separately in terms
of sub-section(1)(b) of section 25 of the 2003 Act.
[59] Moreover, I observe that sub-section(1)(b) gives a discretion to the local authority to
provide care and support for a patient. It is therefore fundamentally different from
sub-section(1)(a) founded upon by the pursuer, which places an obligation on the local
authority to provide care and support.
[60] Secondly, I am not persuaded that paragraph 3 of schedule 1 of the 2014 Act is
applicable to the circumstances of the patient. On a sound construction I believe this section
is intended to cover a situation where residential accommodation is being provided by a
local authority to a patient in Scotland and that patient wishes to move to England where he
or she will continue to require care and support in residential accommodation or where the
local authority (in consultation with the patient) requires to move such a patient to
residential accommodation in England. In those circumstances if the Scottish local authority
secures, on the patient’s behalf, provision of the accommodation in England then in terms of
this provision the responsibility for the patient remains with the Scottish local authority. I
do not believe Parliament in this provision intended to place a continuing obligation on the
Scottish local authority where it had no control in respect of the patient’s move to England
and entry into residential accommodation.
Page 18 ⇓
18
[61] The circumstances in the present case are entirely different from that envisaged in
the provision and accordingly this provision is not engaged.
The patient was not in residential accommodation in Scotland before her move to
England.
The defender was not involved in arranging her move to England and thus did
not secure “the provision of accommodation (for her) in England”.
Her admission to Addenbrookes Hospital was in terms of section 2 and 3 of the
1983 Act. Cambridge was obliged, given the patient’s medical condition, in
terms of the said provisions of the 1983 Act to take steps to have the patient
compulsorily detained. It was not acting on behalf of the defender in terms of
section 25 of the 2003 Act in detaining the patient. It was her presence in
Cambridge and her mental condition which required Cambridge to admit her.
That is how the patient became the responsibility of Cambridge.
It would deprive the word “securing” of any meaning, if the circumstances of the
present case were said to amount to the defender “securing” accommodation in
England. The word “securing” applying its ordinary meaning requires some
form of act on the part of the defender whereby the residential accommodation is
obtained. There is, I think, no such act in the present case. It appears to me that
Cambridge acting in terms of sections 2 and 3 of the 1983 Act cannot be said to be
the defender “securing accommodation” in terms of section 25(1)(a)(ii) of the
2003 Act.
[62] Thirdly, and this overlaps with what I have said above at secondly, at the relevant
time, namely: the date at which the contract was entered into Cambridge was fulfilling
obligations which were incumbent on it in terms of the 1983 Act. It was Cambridge which
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did not have a bed for the patient and which was not able to fulfil its obligations in terms of
section 2 or 3 of the 1983 Act without the transfer of the patient to the pursuer’s facility.
[63] Cambridge on its own volition decided that it was required to act in terms of the
above provisions of the 1983 Act to safeguard the patient. It was not, in any sense, acting in
terms of section 25 of the 2003 Act on behalf of the defender.
[64] The issue can perhaps be tested in this way: if the patient had been in Nairn when
she had become unwell to the extent that she did in Cambridge the defender would not have
relied on section 25 of the 2003 Act to deal with the situation. Rather, I think that it would
have exercised the equivalent Scottish provisions in relation to the compulsory detention of
the patient. This I believe illustrates why it cannot be said that what Cambridge was doing
was acting on behalf of the defender.
[65] In conclusion it appears to me that when the contract was entered into the patient
was still compulsorily detained in terms of the 1983 Act and thus in entering into it
Cambridge was fulfilling its obligations which it owed to the patient in terms of the
1983 Act.
[66] I think the argument that what Cambridge was doing was acting on behalf of the
defender in fulfilment of its section 25 obligations for the above reasons is misconceived.
[67] Now I turn to Mr Lindsay’s argument in respect to agency of necessity. His
argument in summary is this: an agency of necessity was created by the patient’s emergency
admission as a consequence of her urgent need for medical assistance.
[68] The underlying reason for the principle of necessity is to justify an action which
would otherwise be unlawful or tortious thus in the third category of cases identified by
Lord Goff an agency of necessity is created in the circumstances of a person of unsound
mind, who cannot consent to necessary medical treatment. The hospital can by reliance on
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an agency of necessity carry out the treatment on the patient which would otherwise be
unlawful.
[69] Lord Goff made certain further observations in relation to agency of necessity in R v
Bournewood Community and Mental Health Board [1999] 1 AC 458 at page 490 where he accepts
that the principle of necessity could cover the following proposition:
“That the common law permitted the detention of those who were a danger, or
potential danger to, themselves or others in so far as this was shown to be
necessary.”
[70] Neither of the above situations, where Lord Goff holds that an agency of necessity
could exist, covers the circumstances of the present case. The detention of the patient did
not require an agency of necessity to justify it and to make it lawful and not tortious.
Cambridge’s actions were justified by its acting in accordance with the above provisions of
the 1983 Act. The same applies in respect to any treatment which was given by Cambridge.
[71] Cambridge did not require the consent of the defender to act as it did. It had the
authority to act in terms of the above provisions of the 1983 Act. It was in no sense acting
unlawfully or in some way which would give rise to liability in delict in respect to the
patient when it detained her. It was not acting unlawfully or in some way which could give
rise to liability in delict when it obtained for the patient a bed at the pursuer’s facility. It was
not acting in terms of section 25 of the 2003 Act at the relevant time. Rather it was exercising
entirely separate statutory powers in terms of the 1983 Act.
[72] I am of the view for the above reasons that no agency of necessity was created and
thus Cambridge did not enter into the contract on behalf of the defender.
[73] In conclusion I am satisfied that when the statutory background is properly analysed
there was at the relevant time no obligation in terms of section 25 of the 2003 Act incumbent
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on the defender in respect to the patient and Cambridge was not acting as an agent of
necessity for the defender at the relevant time.
[74] The pursuer separately argues that in any event the defences amount to an implied
admission that a contract was created between the pursuer and defender.
[75] Before turning to look at the pleadings I would wish to make a preliminary
observation relative to this argument. I earlier observed that in response to criticisms made
by Mr Walker, in his note of argument, of the pursuer’s case based on ratification and
personal bar no argument was advanced by Mr Lindsay seeking to deal with these
criticisms. I believe it is implicit from the approach of Mr Lindsay that these criticisms could
not be answered except by saying that they were nothing to the point as there was a deemed
acceptance of the existence of a contract. I note that in the pleadings the basis of both the
ratification and personal bar cases is the payment of invoices by the defender until 2017. It is
the admission of those payments which is said to found the argument that the defender
accepts that a contract existed. I believe it would be a very odd result if that admission,
which is insufficient to found a relevant case of ratification or adoption, could nevertheless
amount to an admission of contract formation. I have also held that the contract formation
case based on agency of necessity is also irrelevant. Thus, for the court to hold that there
was an admission of contract formation it would have to do so where it had rejected the
three bases on which it was pleaded that a contract had been formed. The foregoing
consideration is I believe a powerful indicator that Mr Lindsay’s argument is wrong. The
defender has at no point in its pleadings accepted that any of the bases advanced by the
pursuer for contract formation are relevant and accordingly cannot be said to have accepted
that a contract has been formed.
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[76] Turning to the detail of Mr Lindsay’s argument under this head the first point made
was this: the defender had to have a statutory basis to make the above payments. Thus
acceptance of payment is acceptance that a contract was formed. I do not think that this is
correct. I accept to an extent the first part of the argument: a statutory body making
payments must in making such payments have believed when it made the payments that it
had statutory authority to make them. However, the statutory body may have believed it
had authority, at the time it made them, to make certain payments, yet at a later stage form
the view that it was not obliged to make these payments. Thus acceptance of payment can
sit perfectly happily alongside a position that it was not obliged to make these payments.
Accordingly acceptance of payment does not inexorably lead to acceptance of contract
formation.
[77] As regards the defender’s averments anent payment I consider that these cannot be
looked at in isolation. They have to be looked at in the context of the whole averments made
on behalf of the defender. Thus these averments require to be read alongside the following
averment:
“Explained and averred that there was no contract between the defender and the
pursuer in terms of any funding agreement entered into between the pursuer and
NHS Cambridgeshire.”
[78] It is the funding agreement which is averred by the pursuer to be the contract which
has been entered into by Cambridge on the defender’s behalf. Accordingly there is an
explicit, clear and unequivocal denial of the core of the pursuer’s case in respect of contract
formation.
[79] When considering the defender’s averments anent payment they must be looked at
in the context of this explicit denial of the core of the pursuer’s case. To hold that there was
an admission in respect of contract formation I believe would be to ignore the said
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averment. I would go further and say that to hold as the pursuer contends would be to turn
a clear denial into an admission. I do not believe that in light of the said averment the
defender’s pleadings can be read as the deemed admission contended for by Mr Lindsay.
[80] Moreover, the defender’s averments at page 18 of the record relative to payment
state no more than this “The defender was willing to fund [the patient’s] accommodation
with the pursuer until 30 April 2017”. The word “willing” in the said averment is not
synonymous with the word “obliged”. It amounts on an ordinary reading of the word to no
more than the defender saying it was ready, disposed, prepared or inclined to make those
payments for that period of time. In particular said word cannot be construed as amounting
to “obliged” when viewed in terms of the background of the other averments made on
behalf of the defender.
[81] Finally, I believe, that in considering whether the defender’s averments could be said
to amount to an implied admission of the formation of a contract, a matter which has to be
considered is the fourth plea-in-law for the defender which is in the following terms:
“In particular, there having been no relevant contract between the pursuer and
defender, decree of absolvitor should be pronounced.”
[82] Once more the above plea makes it clear that the defender does not accept that a
contract was formed.
[83] In respect to the argument advanced by Mr Lindsay that there is a lack of candour in
the defender’s pleading regarding the formation of the contract I am not persuaded by this.
It appears to me rather that the position is entirely clearly pled. The defender has denied
outright any contract based on the funding agreement. In the course of its answer it makes
it apparent that none of the bases of contract formation advanced by the pursuer are
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accepted. In its note of argument and in oral submissions the defender has expanded upon
that position.
[84] The defender’s pleadings are undoubtedly carefully drafted. However, I do not
think that they lack candour. The defender has explicitly answered the pursuer’s case
regarding contract formation. It has accepted making payments and not disputing these and
advanced a clear argument in law that such payments could not amount to formation of a
contract.
[85] The defender does not say why it made such payments. It perhaps could have done
so. However, that failure does not I think amount to a lack of candour in its pleadings when
it is properly seen in the context of the rest of its averments.
[86] For all of the above reasons I am satisfied that on none of the bases contended for on
behalf of the pursuer has it averred on record a relevant case that a contract was formed
between the parties. The foregoing conclusion is sufficient to decide the matters before me.
However, I was addressed at some length on the issue of the incorporation of the implied
term and accordingly turn to consider these.
The implied term
[87] Mr Walker began his submissions in respect of this issue by saying this: the law with
regard to implied terms is set out by the Supreme Court in Marks and Spencer Plc v BNP
Paribas Security Services Trust Co (Jersey) Limited [2016] AC 742. At paragraph 18,
Lord Neuberger approvingly quoted the dictum of Lord Simon in BP Refinery (Westernport)
“For a term to be implied, the following conditions (which may overlap) must be
satisfied: (1) it must be reasonable and equitable; (2) it must be necessary to give
business efficacy to the contract, so that no term will be implied if the contract is
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effective without it; (3) it must be so obvious that ‘it goes without saying’; (4) it must
be capable of clear expression; (5) it must not contradict any express term of the
contract.”
[88] Lord Neuberger further, at paragraph 21, developed the above points. He stated
that:
“…a term should not be implied into a detailed commercial contract merely because
it appears fair or merely because one considers that the parties would have agreed it
if it had been suggested to them. Those are necessary but not sufficient grounds for
including a term.”
[89] The first branch of Mr Walker’s argument was to stress the voluntary nature of the
patient’s continuing presence in the pursuer’s facility. In particular since 31 October 2016,
she has been perfectly free to walk out at any time. The pursuer does not aver that it had
any legal compulsion to let her stay in its facility. Nor does it aver any legal or other
obligation on the patient to accept care from the defender or, for that matter, any other
public body. Instead the pursuer’s case seems to be that it is reasonable and equitable for a
term to be applied into the agreement which enables a private hospital and a private
individual to voluntarily, and unilaterally, decide that the latter will stay in the former’s
private facility for as long as she wishes at public expense, despite the paying body having
made clear that it is no longer willing to pay. He submitted that that is neither reasonable
nor equitable.
[90] Secondly, given the statutory regime which governs mental health care, he described
the proposition that underlay the pursuer’s position that the only thing standing between
the patient and harm was the implied term as fanciful.
[91] He submitted that there were a number of safeguards of the patient’s position.
[92] The first safeguard to which he referred was this: the patient’s care and support is
provided for in terms of the 2014 Regulations. There is an overarching duty on the defender
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and Cambridge not to allow care to be adversely affected by any dispute. There are detailed
rules regarding which authority is to pay for care and support while any dispute is ongoing.
He in particular referred to Regulation 5 which provides:
“(1) The authorities which are parties to a dispute must not allow the existence of
the dispute to prevent, delay, interrupt or otherwise adversely affect the
meeting of the needs of the adult (“the adult”) or carer to whom the dispute
relates.
…
(3) Where paragraph (2) applies –
(a) the authority which is meeting any needs for accommodation of the
adult on the date on which the dispute arises must continue to meet
those needs; and
(b) if no authority is meeting those needs as at that date, the authority in
whose area the adult is living as at that date must do so from that
date.”
[93] He submitted that in terms of Regulation 5(3)(b), by May 2017 Cambridge would
clearly have interim responsibility. By then: the defender was not paying the pursuer and
so was not meeting the patient’s needs for accommodation, and the patient was living in the
area of Cambridge and had been for several months.
[94] The second safeguard was this: in what he described as the wildly implausible event
that Cambridge were willing to breach their statutory duties and allow care and support to
be interrupted, the patient had public law remedies available to her. He noted that there is
no averment that the patient has not got the capacity to issue instructions.
[95] The third safeguard was this: should the situation which the pursuer hypothesised
occur then the patient would be detained either under section 2 or section 3 of the 1983 Act.
That is what happened when the patient first arrived in Cambridge and she was detained
and taken to Addenbrookes hospital.
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[96] It was accordingly his position that the implied term is not necessary. Nor he
submitted is it so obvious as to go without saying. No reasonable public authority would
agree to the suggested term.
[97] In respect to business efficacy Mr Walker next argued that the implied term
purported to serve the interests of the patient. However, the patient was not a party to the
contract and her interests had nothing to do with the business efficacy of the contract.
[98] Mr Walker further argued that even if the implied term was incorporated the
patient’s discharge would not breach the term. In development of this he said:
There would be no “material risk of harm” if discharged given the statutory
safety net to which he had already referred.
By May 2017 the patient was ordinarily resident in Cambridge and not within the
defender’s area, and thus on her discharge from at least that date onwards the
defender could have no obligations in respect of her.
He repeated his argument in respect of the non-applicability of the 2014 Act
provisions and thus he submitted there could be no breach of the implied term.
Lastly he sought to argue two points in respect of provision of services to the
patient:
(a) the patient’s discharge did not result in breach as it was not an obligation
incumbent on the defender to provide care at a place of the patient’s choosing
and
(b) the 2003 Act only obliges the defender to make care available not to actually
deliver care.
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The pursuer’s reply in respect to the implied term
[99] The way in which the breach of the statutory duty owed by the defender to the
patient dovetails with the contract between the parties is that there is an implied term that
the defender cannot terminate the contract if that would result in a breach of the statutory
duties it owes to the patient in circumstances where such a breach would present a material
risk of harm to the patient. Such a duty is implied by the common law into the contract on
the grounds of business efficacy. This is because the contract between the parties would be
completely unworkable without such a term being implied into it.
[100] He accepted that the law in respect to implying terms had been set out by the
Supreme Court in Marks & Spencer v PNB Paribas. It was his submission that all five of the
conditions identified in that case which are necessary for a term to be implied are present in
the instant case. He submitted that the implied term would be reasonable and equitable, it is
necessary to make the contract effective, it is obvious, it is capable of clear expression and it
does not contradict any express term.
[101] In elaboration of this argument he made the following points:
“33. In the absence of such a term, patients could be effectively abandoned in the
care of the pursuer where their subsequent discharge would be hazardous to them;
thereby making their discharge morally and ethically impossible. The pursuer
provides medical and care services. Its employees are bound by the codes of conduct
and ethics which apply to their respective professions. They are regulated by the
responsible regulatory and professional bodies. Discharging, or effectively ejecting,
the Patient without appropriate support and care would breach a multitude of such
professional duties.
34. As a health board, the defenders are well aware that medical practitioners
require to act in the best interests of their patients. In the circumstances averred by
the pursuer, it is self-evident that discharging the Patient without accommodation
and without a care package would not have been in her best interests. The Patient
suffers from dementia, schizophrenia and delusions.
35. In other words, the absence of such an implied term would place the pursuer
between Scylla and Charybdis: incidit in scyllam cupiens vitare charybdim. The
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pursuer could either accept liability to pay for the Patient’s care indefinitely or it
could abandon her to her fate thereby breaching the moral, ethical and professional
duties discussed above. This impossible choice, between two equally unacceptable
alternatives, demonstrates why it is necessary to imply such a term into the contract
between the parties; and why the high test for the implication of a contractual terms
on the grounds of business efficacy is met in the present case. The contract would be
unworkable without this term being implied into it, as otherwise impossible and
unworkable burdens would be placed upon the pursuer.”
Discussion
[102] In respect to the issue of the implied term there was no dispute regarding the
applicable law. It was accepted by both parties that the law regarding implied terms is
authoritatively stated in the passages earlier quoted in the judgment of Lord Neuberger in
Marks & Spencer v BNP Paribas.
[103] Even if I am wrong in respect to the issue of the formation of the contract, I do not
believe that the implied term would be implied into the contract.
[104] In my view the conditions for the implication of the implied term are not satisfied.
[105] In particular I consider that it has not been shown that given the statutory
framework to which I was directed, which protects persons such as the patient who have
mental health difficulties, the term is necessary. It is my view that having regard to the
statutory framework the implied condition is shown to be unnecessary.
[106] If it were judged that the patient would be at “material risk of harm” if she were to
be released from the pursuer’s facility then I am persuaded that this would engage the
relevant provisions of the 1983 Act, namely: sections 2 and 3 and the patient would not
therefore be placed “at material risk of harm”.
[107] Moreover, if as argued by the pursuer the 2014 regulations are applicable then in
terms of regulation 3 at the date of the hypothesised event a dispute in terms of the
regulations would exist (if it had not earlier arisen when the defender stopped paying the
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pursuer’s invoices, namely: as at April 2017). In those circumstances regulation 5(3)(b)
provides:
“If no authority is meeting those needs as at that date, the authority in whose area
the adult is living as at that date must do so from that date.”
[108] Accordingly in those circumstances Cambridge would be bound to meet the needs of
the patient.
[109] Beyond that the patient would at the date of the hypothesised event have public law
remedies available to her and it is not averred on behalf of the pursuer that she has no
capacity to issue instructions. This provides a further safeguard if neither of the first two
safeguards properly protect the patient.
[110] I am unable against the above statutory background to envisage circumstances in
which the hypothesised situation which underpins the alleged necessity for the implied term
could occur. The patient is fully protected by the statutory safety net which is in place.
[111] Even if it is argued that the patient is not able to instruct that her statutory rights
should be protected then of course steps could be taken to appoint a person to act on her
behalf.
[112] Further looking to the issues of whether the condition is reasonable and equitable I
believe that there is merit in the arguments advanced by Mr Walker.
[113] Lastly assuming that the implied term is incorporated Mr Walker argued that the
person for whom the implied term is necessary according to the pursuer is the patient and
not the pursuer. Therefore he argued that given that the patient was not a party to the
contract this could not support a business efficacy argument. I think this is too narrow an
approach. It seems to me that what the pursuer is saying is that it is placed in an impossible
position by what would happen to the patient if an implied term was not put in place. It is
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31
saying that it could not work the contract without that term for the reasons it explains in its
averments. In my view Mr Walker’s argument relative to this is wrong.
[114] Lastly, assuming that the implied term was part of the contract and the defender has
any obligations in terms of section 25 as at the relevant date Mr Walker argued that there
would be no breach of section 25 by her release. I agree that on a proper construction of
section 25 it is not for the patient unilaterally to decide what care and support should be
provided by the local authority and nor is it for the patient on her own to decide where such
care and support should be provided. However, in the circumstances of this case if the
defender in respect of section 25 owes duties to the patient at the date at which it was
intended the patient should be released it seems to me (assuming I am wrong about the
statutory safety net) that her release would breach the section 25 obligations in that
according to the pursuer there are no other support and care provisions in place for her.
Decision
[115] Accordingly for the foregoing reasons I am of the view that the pursuer’s case is
irrelevant.
Disposal
[116] I have put this case out by order in order that I may be addressed on the orders that
remain to be made in light of the terms of my opinion.