Banking Professions Land Practice Mental disorder




Banking



Letter of credit - condition for draw-down - interpretation of commercial contracts - condition satisfied



Sirius International Insurance Co (Publ) v FAI General Insurance Ltd and others: HL (Lord Bingham of Cornhill, Lord Nicholls of Birkenhead, Lord Steyn, Lord Walker of Gestingthorpe and Lord Brown of Eaton-under-Heywood): 2 December 2004

In litigation between the defendant, the party which had set up a letter of credit, and the claimant, the beneficiary, a preliminary issue arose as to whether the first condition for allowing the claimant to draw down the letter of credit had been satisfied by the terms of a Tomlin order settling earlier proceedings between the parties.


The judge found that the first condition had been satisfied and that consequently the claimant was entitled to the proceeds of the letter of credit. The Court of Appeal reversed that decision. The claimant appealed.


Geoffrey Vos QC and Peter Arden (instructed by Reynolds Porter Chamberlain, London) for the claimant; Gabriel Moss QC and Philip Marshall QC (instructed by Ince & Co, London) for the defendant.


Held, that the Tomlin order had to be construed as a commercial instrument; that the aim of the inquiry was not to probe the real intentions of the parties but to ascertain the contextual meaning of the relevant contractual language; that the inquiry was objective and the question was what a reasonable person, circumstanced as the actual parties were, would have understood the parties to have meant by the use of specific language; that the answer to that question was to be gathered from the text under consideration and its relevant contextual scene; that there had been a shift from literal methods of interpretation towards a more commercial approach; that the tendency should, therefore, be against literalism which should if possible it be resisted in the interpretative process; that the judge had been right to conclude that on a correct interpretation of the Tomlin order the first condition had been satisfied; and that with due respect to the members of the Court of Appeal their interpretation had been uncommercial and literalistic. (WLR)



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Professions



Optician referring patient to registered medical practitioner - optician not required to diagnose illness, disease or abnormality - failure to diagnose condition not serious professional misconduct



Threlfall v General Optical Council: QBD (Mr Justice Stanley Burnton): 26 November 2004

The defendant, a registered ophthalmic optician, was charged with failing to examine the right eye of a patient adequately and failing to record her examination of that patient adequately.


Following a hearing before the disciplinary committee of the General Optical Council she was found guilty of serious professional misconduct and a penalty order of £500 was imposed on her. She appealed.


Beverley Lang QC (instructed by the Solicitor, Association of Optometrists) for the defendant; Alison Foster QC (instructed by Blake Lapthorn Linnell, Fareham) for the council.


Held, allowing the appeal, that the disciplinary committee was under a duty both at common law and under article 6 of the European Convention on Human Rights to give adequate reasons for a finding of serious professional misconduct in good time for a defendant's right of appeal to be exercised; that an optician performing an examination to which regulation 3 of the Sight Testing (Examination and Prescription)(No 2) Regulations 1989 applied was not required to diagnose illness, disease or abnormality, and so it followed that rule 3 of the Rules Relating to Injury or Disease of the Eye 1999 did not require or envisage that the optician would have identified the injury or disease of the eye from which the patient suffered, and it was sufficient that the optician concluded that the patient was suffering from some injury or disease of the eye, the diagnosis of which was for the registered medical practitioner to whom the patient was referred; and that the facts found by the disciplinary committee did not justify the finding of serious professional misconduct.



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Land



Landlord delivering lease in escrow - conditions of escrow subsequently satisfied - tenant not treated as liable under the lease as from date of landlord's delivery in escrow



Dyment v Boyden and others: CA (Lords Justice Peter Gibson, Clarke and Keene): 26 November 2004

The applicant and the second and third respondents signed heads of agreement, referring to an annexed lease, under which the second and third respondents gave up their interests in a business run jointly by the three of them, the applicant surrendered her interest in the property at which the business was carried on, and the second and third respondents agreed to lease the property to the company at a rent that was well above the market rent.


The second and third respondents executed the lease and delivered it in escrow to the applicant's solicitors, plus a counterpart lease for sealing by the company. The applicant acquired the second and third respondents' shares in the company. Subsequently the company executed the counterpart lease.


The company having gone into liquidation, the second and third respondents lodged a proof of debt. The applicant sought an order expunging the proof of debt on the basis that the excessive rent constituted unlawful financial assistance for the purpose of her acquisition of the shares under section 151(1) of the Companies Act 1985. The judge refused the application. The applicant appealed.


Robert Hantusch (instructed by Hunt & Morgan, Cardiff) for the applicant; David Chivers QC and Jeremy Bamford (instructed by Roy Thomas, Begley & Co, Swansea) for the respondents.


Held, dismissing the appeal, that it was in principle wrong that an intended party to a lease should be treated as bound at a time before he had committed himself to the lease merely because the other party had delivered the lease in escrow and the escrow conditions were subsequently satisfied; that that was all the clearer where the other party had prepared a counterpart lease for execution and exchange and penal consequences would otherwise follow; that, therefore, the company was not to be treated as bound as and from the date of the second and third respondents' delivery in escrow; and that, accordingly, no financial assistance had been given by the company before or at the same time as the acquisition of the shares.



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Practice



Documents seized by Serious Fraud Office disclosed to Government department to assist civil proceedings - disclosure not inappropriate - unfair not to give owner of documents sufficient notice to enable it to raise objections



R (Kent Pharmaceuticals Ltd) v Serious Fraud Office: CA (Lords Justice Kennedy, Chadwick and Dyson): 11 November 2004

The Serious Fraud Office (SFO), in the course of its investigation into allegation of price fixing by a cartel of pharmaceutical companies supplying generic drugs to the National Health Service, seized several documents belonging to the claimant for the purpose of commencing criminal proceedings against the drug companies under suspicion.


The allegation also prompted the Department of Health to commence civil proceedings for damages against those companies. The SFO, in response to a request from the Department of Health, informed the claimant that it proposed so to disclose copies of the seized documents.


The claimant, contending that it had been given inadequate time to raise any objection, sought judicial review by way of a declaration that the decision of SFO to disclose the copies of documents was unlawful contrary to article 8 of the European Convention on Human Rights, and sought an order for damages. The Queen's Bench Divisional Court dismissed the claim. The claimant appealed.



Stuart Isaacs QC and Clive Lewis (instructed by Brachers, Maidstone) for the claimant; David Perry, Mark Lucraft and Ben Hooper (instructed by the Treasury Solicitor) for the SFO; David Perry and Ben Hooper (instructed by the Treasury Solicitor) for the Home Secretary; Philip Jones (instructed by Peters & Peters, London) for the Secretary of State for Health.


Held, dismissing the appeal, that section 3(5)(a) of the Criminal Justice Act 1987 was clearly intended to allow the nominated representative of the Serious Fraud Office to disclose copies of seized documents to a government department to assist the department to prosecute a civil action to recover losses allegedly caused by the fraud under investigation; but that (Lord Justice Kennedy dissenting) the failure of the SFO to give adequate notice of its intention to disclose was unfair.



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Mental disorder



Detained patient - detention extended pending determination of social worker's application to displace nearest relative - statutory scheme incompatible with right to liberty



R (MH) v Secretary of State for Health: CA (Lords Justice Buxton and Wall and Mr Justice Lindsay): 3 December 2004

The claimant, who had been detained in hospital under section 2 of the Mental Health Act 1983, was mentally incompetent to exercise her statutory right to apply to a mental health review tribunal.


The day before the expiry of the 28-day time limit on her detention provided by section 2(4) an approved social worker applied to the county court for an order directing that the functions of the claimant's nearest relative under the Act be exercisable by the social worker rather than by the claimant's mother.


By virtue of section 29(4), the period for which the claimant was to be detained was accordingly extended until the application was finally disposed of. The claimant's claim for judicial review, in which she sought declarations that the 1983 Act was incompatible with article 5(4) of the European Convention on Human Rights, was dismissed. The claimant appealed.


Paul Bowen (instructed by Elliott Bridgman, Telford) for the claimant; Timothy Morshead (instructed by the Treasury Solicitor) for the secretary of state.


Held, allowing the appeal, that the state was obliged by the general principles of protection that informed article 5 of the convention to make provision for the reference to a court of the case of a patient detained pursuant to section 2 of the 1983 Act who was incapable of exercising his right to apply to a mental health tribunal; and that a patient whose detention had been extended by reason of the operation of section 29(4) of the 1983 Act should have the right to apply to a mental health tribunal in respect of that detention; and that, accordingly, the scheme of the 1983 Act was in those respects incompatible with article 5(4).



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The law reports are prepared by the reporters to the Incorporated Council of Law Reporting for England and Wales. WLR means that a report has been submitted for publication in the Weekly Law Reports