Damages


Local government - personal injury - social welfare - capital - care expenses - community care - income - local authorities' powers and duties - means testing - payments

Crofton (a patient suing by his father and litigation friend John Crofton) v National Health Service Litigation Authority: CA (Civ Div) (Lords Justice May, Dyson, Lady Justice Smith): 8 February 2007

C appealed against a decision ([2006] Lloyd's Rep Med 168) awarding him damages in respect of the negligence of a hospital, represented by the respondent NHS authority.



C, aged 26, was severely disabled as a result of brain damage suffered soon after his birth. At the date of the trial, he was living in supervised accommodation where his carers were paid for by the local authority. The judge accepted his claim that damages for future care should be assessed on the basis that it was reasonable for him to purchase his own accommodation and employ carers.



The judge decided that the local authority would make yearly direct payments towards C's care costs, which should be offset against the total care costs.



The judge applied a whole-life multiplier of 25.42 to arrive at a total award for future care of £1,387,525. The issues were whether the judge should have allowed the respondent to raise the issue of direct payments at all; whether the local authority could be satisfied - C having been awarded substantial damages - that it was necessary to meet his care needs under section 29 of the National Assistance Act 1948, and section 2 of the Chronically Sick and Disabled Persons Act 1970; whether the local authority could have regard to C's damages at the means-testing stage; and whether, if the local authority would make direct payments to C, that fact was properly taken into account by the judge in his assessment of damages.



Held, it had not been part of the respondent's case that C would receive direct payments and that those should be taken into account in the assessment of damages. The issue was raised in the course of the evidence-in-chief of a local authority employee, and he was not cross-examined on it.



It was most unfortunate that the direct payments issue arose in the way it did, but the judge had been correct to allow the respondent to take the point, given its importance and potential impact on the amount of the award. However, the decision to allow the point to be taken at the time, rather than following an adjournment, had resulted in unfairness, and an important lacuna in the evidence necessary for the judge's decision (Sowden v Lodge [2004] EWCA Civ 1370, [2005] 1 WLR 2129 considered).



With regard to section 21 of the 1948 Act, which dealt with the provision of accommodation, where a claimant was awarded damages for personal injury that were administered by the Court of Protection, the sum awarded and any income from it were disregarded at the threshold stage: the sums could not be taken into account for the purposes of deciding whether the claimant was in need of care and attention which was not otherwise available.



While it was striking that there was no provision in section 29 of the 1948 Act or in section 2 of the 1970 Act, which corresponded to sections 21(2A) and 22(5) of the 1948 Act, that did not mean it was necessary to infer that Parliament intended that an award of damages for personal injury should be disregarded at the threshold stage in relation to section 21 of the 1948 Act, but taken into account in relation to section 29 of the 1948 Act and section 2 of the 1970 Act.



A local authority was obliged, in deciding the threshold question, to disregard personal injury damages administered by the Court of Protection (R v Sefton MBC, ex parte Help the Aged (1998) 38 BMLR 135 applied).



The guidance issued by the Department of Health in September 2003 as to the exercise of discretion under section 17 of the Health and Social Services and Social Security Adjudications Act 1983 provided that the capital value of personal injury damages administered by the Court of Protection was to be disregarded in the means-testing exercise. The position regarding income deriving from capital was far from clear (Freeman v Lockett [2006] EWHC 102 (QB), [2006] PIQR P23 considered).



The judge had not had sufficient material before him to enable him to decide whether the income would be taken into account by the local authority, and the instant court was in a no better position to do so. However, the judge had been correct to find that the local authority could and would make direct payments to C despite the award of damages, and that those payments should be taken into account in the assessment of damages.



The judge had erred in applying the agreed whole-life multiplier to the direct payments. He had identified various uncertainties regarding the security of funding for direct payments; those uncertainties should have led him to conclude that a substantial discount to the multiplier was necessary.



The whole issue of direct payments was remitted to the judge for further consideration.



Appeal allowed.



Simon Taylor QC, Lisa Sullivan (instructed by Pannone) for the appellant; John Grace QC, Alexander Antelme (instructed by Kennedys) for the respondent.





Negligence



Damages - employment - personal injury - counselling - depression - foreseeability - future loss - loss of earnings - occupational stress

Intel Incorporation (UK) Ltd v Tracy Ann Daw: CA (Civ Div) (Lords Justice Pill, Wall, Richards): 7 February 2007
An employer (C) appealed against a decision ([2006] EWHC 1097) that it had been negligent in failing to obviate the risk of its employee (D) suffering chronic stress-induced depression caused by overwork.



D had been employed by C for around 13 years before she suffered a significant breakdown in June 2001 and became unable to work. She was initially a finance assistant, during which time she had had two periods off work with post-natal depression. After her return to work following the birth of her second child, she had progressed to payroll analyst.



C was a large international company that frequently acquired other companies and D worked on payroll integration, which was accepted to be a sensitive and complex job. Shortly after assuming her new role, a reorganisation had taken place, leading to an increase in her work and an increase in the number of managers to whom she was accountable. Some of those managers were unaware of her previous post-natal depression.



D made at least 14 written and verbal representations to her managers that there were insufficient resources to deal with the work-load for which she had responsibility, and that she was having to work excessive hours to complete the work. At trial, the judge had found D to be an able, committed and conscientious employee who had suffered stress because of confused reporting lines at work, and because of insufficient assistance in her job. He had found, on the facts, that injury to her health had been reasonably foreseeable by early March 2001, and that C had failed to take appropriate action. He awarded damages in the region of £134,000.



C submitted that the judge had placed too high a burden on it because, although he had conceded that the post-natal depression did not furnish it with knowledge suggesting a susceptibility to work-related depression, he had expected C to take immediate action from the date in March 2001 when it became aware of a potential problem. C maintained that procedures had quickly been put in place, and it could not have known that the window of opportunity to prevent D's serious breakdown before it actually occurred would be so short. C also submitted that its provision of a counselling service for use by employees was a sufficient discharge of its duty of care.



Held, the judge had been fully entitled to hold that D's stress and ill-health had been caused by a failure of management, and that the injury had been foreseeable enough by early March 2001 to require immediate action.



The essential background to her claim was that she had occupied an important administrative position in a large organisation for many years. She was loyal and regarded by C as of the highest calibre, with a capacity for hard work. She had wished to remain in her employment with C and she had had prospects of promotion. She did not readily complain about volume of work, or take time off, or tackle her problems, other than by consulting those who could do something about them. In the context of her frequent complaints of overwork and conflicting pressures on her, the judge had been entitled to find that urgent action was required immediately from March 2001.



On the facts, D had been persuaded to stay in her job by unfulfilled assurances that assistance would be provided, and the fact that she did not give up her job when the stresses grew did not eliminate the duty of care owed to her.



The finding of the trial judge that D could not be criticised for failing to use internal counselling services had to be upheld. Reference to counselling services in Sutherland v Hatton [2002] EWCA Civ 76, [2002] PIQR P241 did not make such services a panacea by which employers could discharge their duty of care in all cases. In this case, the consequences of management failings were not avoided by the provision of counsellors, and the only way of dealing with D's problems would have been for management to reduce her work-load.



The multiplier of six for the damages award for future loss of earnings could not be criticised. The judge had properly considered the risk of future psychiatric illness occurring had there been no illness caused by the instant breach of duty, but he had not been required to conclude whether future episodes would be as severe.



Appeal dismissed.



Martin Porter QC, N Goolamali (instructed by Bevan Brittan) for the appellant; Roderick Moore (instructed by Lemon & Co) for the respondent.





Housing



Local government - causation - housing allocation - intentional homelessness - possession - applicant for housing had taken on mortgage knowing repayments could not be sustained - history of rent arrears

Watchman v Ipswich Borough Council: CA (Civ Div) (Lords Justice Laws, Carnwath, Moore-Bick): 8 February 2007
W appealed against a decision, upholding the decision of the reviewing officer of the respondent local authority, that W had made herself intentionally homeless. W had rented a property from the local authority. Despite the fact that she had a history of rent arrears, she and her husband (H) purchased the property with a mortgage with significantly higher monthly repayments than the rent.



The following year, H lost his job, and mortgage arrears built up. The lender eventually issued proceedings and was granted a possession order. W applied to the local authority for accommodation.



The local authority refused on the basis that W was intentionally homeless, as she had taken on a mortgage knowing the repayments could not be kept up. The review officer upheld the decision, and held that H losing his job did not break the chain of causation, as it was inevitable that W would get into severe financial difficulties.



W's appeal was dismissed. W contended that the reviewing officer had looked at irrelevant factors when considering the question of the break in causation, as the material date for the determination of the issue of homelessness was the date the accommodation was actually left. W contended that the reviewing officer had not considered that, otherwise he would have concluded that loss of employment was the cause.



Held, the judge had been right to dismiss W's appeal. There was nothing to suggest that the reviewing officer had shut his mind to what occurred when W became homeless, and anterior events were relevant to that question.



Where there were potentially multiple causes for homelessness, all the facts had to be looked at carefully. The reviewing officer had plainly been entitled to consider what would have happened if H had not lost his job, and to consider the financial history at the date the mortgage was undertaken. He had not asked himself the wrong question, and his conclusion was not displaced by his conclusion that H's unemployment had accelerated the homelessness.



Appeal dismissed.



David Carter (instructed by Kerseys) for the appellant; Wayne Beglan (instructed by the local authority solicitor) for the respondent.





Intellectual Property



Information technology & infringement - inventive step - microcomputers - patents - revocation - software - computing system for access to Internet using hand-held computer - invalidity for obviousness - BlackBerry device

Research in Motion UK Ltd (a company incorporated under the laws of England and Wales) (respondent/first part 20 defendant) v Inpro Licensing Sarl (a company incorporated in Luxembourg) (appellant/part 20 claimant) & T-Mobile (UK) LTD (respondent/second part 20 defendant): CA (Civ Div) (Lords Justice Tuckey, Jacob, Moore-Bick): 7 February 2007
A company (X) appealed against a decision ([2006] EWHC 70 Pat) that its patent was invalid for obviousness. The respondent company (R) had applied for revocation of X's patent for a computing system concerned with how a small field computer, with a small display and limited battery life, could access the Internet.



R owned the BlackBerry device that gave the user access to Internet features via a field computer. The judge found X's patent invalid as it was obvious over three citations, the strongest of which was Mowser.



On appeal, two of X's claims remained outstanding. The concept of X's first claim was to have a proxy server between the field computer and the Internet, and for the field computer to send information about what it could display to the proxy, so that the proxy could transpose what it received from the Internet into what could be displayed by the small field computer screen. The second claim added the feature of assembling text and image files into a single file in the proxy before sending it to the field computer.



X contended that although the judge had said that he would follow the principles laid down in Windsurfing International Inc v Tabur Marine (Great Britain) Ltd [1985] RPC 59, he had not done so, and in particular he failed to identify the differences between the prior art and the inventive concept of the impugned claims in line with step 3 of Windsurfing.



Held, in relation to the first claim, the general idea of a proxy to do the work was disclosed by Mowser. The court could not see, at the most basic level, that it could be inventive over Mowser to tailor the image so that it fitted the screen of the field computer.



Mowser said the size of the image could be reduced, resulting in a smaller image and, given that, one did not have to be an inventor to make a smaller image that would fill the screen (Windsurfing applied). Accordingly, X was far from showing that the judge was wrong and had made an error of principle.



The judge had considered the second claim in the context of all the citations collectively. That was legitimate, given that the feature was an independent idea from that of screen size-matching, and so there was no question of the addition of the two features being an inventive combination.



The question was whether, given the idea of a proxy server, using that to combine files so that a single file was sent to the field computer was obvious, Windsurfing applied. The judge's view that the use of a single file, and the appropriate changes to the protocol between mobile and proxy, was entirely trivial could not be wrong, and especially not in principle. The fact that single files combined from several were actually proposed in earlier proposals for Internet protocols, provided some good confirmation that the idea was obvious.



Appeal dismissed.



Guy Burkill QC, Andrew Lykiardopoulos (instructed by Dechert) for the appellant; Antony Watson QC, Tom Hinchliffe (instructed by Lovells) for the respondents.





Family



Local government - adoption - children - parental consent - special guardianship orders - dispensing with parental consent for adoption - parental agreement - duty to promote welfare of child - best interests - permanent and secure placement - distortion of family relationships - judicial discretion

Re AJ (a child): CA (Civ Div) (Lords Justice Scott Baker, Wall): 6 February 2007
The parents (P) appealed against an order to dispense with their consent to the adoption of their child (J) by the first respondent paternal aunt and uncle (U).



The relationship between J's parents had been marred by incidents of domestic violence and separation, and the father had a considerable history of criminal offending. J and his mother had been at a refuge when a referral was made to the second respondent local authority.



J was then removed from P's care, when he was about six months old, and placed with U. A care order was made to the effect that J should remain with U as long-term foster parents, and P should have contact with him. P's commitment to contact with J was inconsistent and it was eventually agreed that contact should take place six times a year.



Following the local authority's recommendation that it would be in J's best interests to change the care plan from long-term fostering to adoption, U applied for an adoption order under the Adoption Act 1976.



The judge rejected a special guardianship order under section 14A(6)(b) of the Children Act 1989, introduced by section 115 of the Adoption and Children Act 2002, as a viable alternative to adoption; found that the test in section 6 of the 1976 Act was satisfied, and P were unreasonably withholding their consent to J's adoption; and held that J should be made the subject of an adoption order.



P submitted that the judge had failed properly to consider the availability of a special guardianship order, which was more appropriate than adoption, to provide for J's needs for security and stability within his new family, and that they could not be said to be withholding their consent to J's adoption unreasonably within section 16(2)(b) of the 1976 Act when they were prepared to agree to J continuing to live with U under the security of a special guardianship order, with a restriction order under section 91(14) of the 1989 Act.



U submitted that the instant appeal was no different from any other case involving exercise of a judicial discretion in relation to the welfare of children, and that the judge had directed himself carefully as to the law, made clear and unassailable findings of fact, and had exercised his discretion appropriately.



Held, special guardianship orders did not effectively replace adoption orders in cases where children were to be placed permanently within their wider families. No doubt there were many cases in which a special guardianship order would be the appropriate order, but each case had to be decided on what was in the best interests of the particular child on the particular facts of the case, Re S (A Child) [2007] EWCA Civ 54 applied.



Each decision would involve the careful exercise of a judicial discretion applied to the facts as found. In this case, the judge's findings of fact and his assessments of the parties were determinative of outcome.



J had been with U since the age of six months. He and his carers both plainly needed the assurance that the security of that placement could not be disturbed. That assurance could not be provided by a special guardianship order but could only be provided by adoption.



The judge had plainly been entitled to find as a fact that the mother in particular had never given up on regaining J's care. His findings that there was a real possibility of future applications to the court, and that those applications would be disruptive of the placement were manifestly open to him on the evidence.



On the issue of adoption, it had been open to the judge on the facts properly to find that the test contained in section 6 of the 1976 Act was satisfied.



On the question of dispensation with parental consent to adoption, the judge could not be faulted either on his analysis of the correct, albeit repealed, law or on his application of that law to the facts of this case. A hypothetical reasonable parent would see that J's welfare was the decisive issue, that it required his permanent and secure placement with U, and that accordingly adoption was the right course for him. Such parents would have given their agreement to his adoption, and could legitimately be described as 'unreasonably' withholding their agreement, Re W (An Infant) [1972] AC 682 and Re C (A Minor) (Adoption: Parental Agreement: Contact) [1993] 2 FLR 260 applied).



An adoption order in this case did not unduly distort the family dynamics. The question of the likely distortion of family relationships by an adoption order was very fact-specific and should not be overplayed. J knew precisely who he was, that his birth parents were unable to look after him, that he was living with his aunt and uncle, and was not confused.



Appeal dismissed.



Ruth Henke QC, Matthew Rees (instructed by T Llewellyn Jones and Gaskell & Walker) for the appellants; Lorna Meyer QC, solicitor advocates David Crowley, Graham Jones (instructed by Cameron Jones Hussell & Howe and Smith Llewellyn) for the first and third respondents; Sue Jenkins (instructed by local authority solicitor) for the second respondent.



Local government - adoption orders - children's welfare - parental contact - parental responsibility - special guardianship orders - welfare of child - long-term security and stability of child's placement

Re MJ (A Child): CA (Civ Div) (Lords Justice Thorpe, Carnwath, Wall): 6 February 2007
The mother (M) appealed against an order that her son (C) be adopted by her maternal half-sister (S), with whom C had been placed pursuant to a care order.



C had been placed with S as a result of M's problems with alcohol and drug dependency. The care order provided that C would be returned to live with M, subject to M successfully completing a rehabilitation and detoxification programme at a residential unit.



Although M completed the first stage of her programme, she then relapsed, and as a result C was placed with S. M subsequently completed her recovery programme.



S applied to adopt C under section 46 of the Adoption and Children Act 2002. Although M initially supported S's application for adoption, and acknowledged that she was not in a position to care for C on account of her problems with alcohol and drug dependency, she later changed her stance and wanted C to remain with S under a special guardianship order rather than be adopted.



The recorder found as fact that M had never truly accepted the contingency plan for adoption, but concluded that no lesser order than adoption would meet C's welfare. The recorder then dispensed with M's consent, applying the test under section 52 of the 2002 Act. Furthermore, the recorder found that it was not in C's interests to have contact with M in the short term.



M argued that the recorder had given insufficient weight to the proposition that special guardianship orders were designed as an alternative method of securing legal permanence, and had given too much weight to her own assessment of M, particularly to her findings that M had never truly accepted the final care plan, hoping that C would return to her care, and that she had initially consented to the care plan.



M also submitted that the recorder had overlooked the fact that, even where the court had made an adoption order, a former parent could still at any time seek the leave of the court to make an application for contact with the child, and that the recorder had thus been wrong to make an adoption order.



Furthermore, M submitted that the recorder had not ruled out the prospect of contact between her and C in the future, and there was no evidence that the placement with S would fail if a special guardianship order rather than an adoption order was made.



Held, although it was impossible not to feel sympathy for M, in the circumstances, it was impossible to say that the exercise of the recorder's discretion was flawed and that her decision was plainly wrong (G v G [1985] 1 WLR 647 applied).



The recorder had reached a carefully reasoned discretionary decision based on her assessment of C's welfare, which in turn had been informed by her assessment of the parties. She had been entitled to reach the conclusion that adoption was in C's best interests. Insofar as she made any errors of law, they were errors that largely favoured M and did not vitiate her final decision.



This case was one in which the recorder had been entitled to find on the facts that C's particular welfare needs required the making of an adoption order, and that a special guardianship order would be insufficient to ensure the long-term security and stability of the placement.



Appeal dismissed.



Abigail Bond (instructed by Winterbothams) for the appellant; Sian Parry (instructed by the local authority solicitor and Humphreys respectively) for the first and third respondents; Paul Hartley-Davies (instructed by Devonalds) for the second respondent.





Tax



VAT - torts - carousel fraud - cheating the Revenue - missing trader fraud - precedent - unlawful means conspiracy - need to show actionable claim against conspirator - statutory scheme for recovery of VAT wrongly paid or credited - stare decisis

Total Network SL v Customs & Excise Commissioners: CA (Civ Div) (Lords Justice Ward, Chadwick, Gage): 31 January 2007
A Spanish company (T) appealed against a decision ([2005] EWHC 1 (QB)), following the trial of a preliminary issue, that the respondent commissioners had a cause of action against T in conspiracy where the unlawful means alleged was a common law offence of cheating the public revenue.



The commissioners' claim arose out of a series of alleged carousel frauds, involving mobile telephones being imported VAT-free from other EU member states, being sold through contrived business-transaction chains, and subsequently exported. A loss of tax occurred when the VAT charge on the initial sale of the goods in the UK was not paid to the commissioners because the seller disappeared. The purchaser could still reclaim VAT, so the loss crystallised when the trader that exported the goods from the UK made a repayment claim.



The particulars of claim alleged 13 separate conspiracies, all following a broadly similar pattern. In each conspiracy, all the transactions were carried out on the same day. T was the first and last link in the chain of transactions in all of the conspiracies. In nine of the conspiracies, the same company (C) was the final company in the UK that sold to T outside the UK and claimed repayment of VAT from the commissioners.



T applied to strike out the particulars of claim on grounds that the conspiracy claim circumvented the statutory scheme for the recovery of VAT, and that there was no unlawful means conspiracy on the facts. Those grounds were tried as a preliminary issue and rejected.



T submitted that there was a comprehensive scheme for the collection of VAT under statute, and that if none of the available remedies could be directed at T, which was outside the UK and not a taxable person, then T could not be held to account, and that attempting to recover money from T by a common law cause of action for damages for conspiracy was in effect the levying of taxation without the authority of Parliament, contrary to the Bill of Rights 1688; an unlawful means conspiracy could only arise if the unlawful means were actionable at the suit of the claimant against at least one of the alleged conspirators.



Held, assuming that a claim in conspiracy did lie, then the commissioners' claim was for damages for a perfectly proper, well-recognised tort of conspiring together to defraud the commissioners. That the measure of damages suffered might be measured by reference to the amount by which the Exchequer's income was depleted, did not alter the essential character of the claim as one for damages, not as a levy of money for the use of the Crown without grant of Parliament (Attorney General v Wilts United Dairies Ltd (1922) 38 TLR 781 distinguished). Properly characterised, the claim by the commissioners was not a direct claim for VAT.



The Court of Appeal was bound to hold that an unlawful act actionable at the suit of the claimant was a necessary ingredient of unlawful means conspiracy (Powell v Boldaz [1998] Lloyd's Rep Med 116 followed, Williams v Fawcett [1986] QB 604 applied). Were it not for the authority of Powell, the court would hold that the allegation of conspiracy to cheat the commissioners, provided there was an intention to injure them, albeit not a predominant intention, was sufficient (Sorrell v Smith [1925] AC 700, Lonrho Plc v Fayed [1991] 3 WLR 188, and Mbasogo v Logo Ltd [2005] EWHC 2034 (QB) considered).



The commissioners did not have an independent actionable remedy against C as the conspirator company that had claimed repayment of VAT from the commissioners. Sections 73(2) and 77 of the Value Added Tax Act 1994 provided a statutory method for the commissioners to claw back tax wrongly paid or credited to a trader. A common law claim would be met by the defence that the only remedy was one provided by the statute. In that respect, the statutory provisions could properly be said to provide a comprehensive regime for collecting tax that had been wrongly paid or credited to a trader (Deutsche Morgan Grenfell Group Plc v Inland Revenue Commissioners [2006] UKHL 49, [2006] 3 WLR 781 applied).



Appeal allowed.



Charles Flint QC, Tom Weisselberg (instructed by Byrne & Partners) for the appellant; John Martin QC, Philip Coppel (instructed by the Revenue & Customs Solicitor) for the respondents.