Family


Administrative decision-making - care plans - compensation - just satisfaction - rehabilitation

Re P: CA (Civ Div) (Lords Justice Thorpe, Tuckey, Wilson): 3 January 2007

The appellant (P) appealed against the judge's refusal to award her damages in addition to his declaration that the respondent local authority had breached her human rights by deciding to abandon the care plan for her rehabilitation with her only child, without giving her an opportunity to participate in the decision-making process.



P was 18 years of age and had spent all but the first six years of her life in care. When 14, she had given birth to a son (M). P and M had been accommodated in a specialist unit. Soon afterwards, M had been moved to a foster placement, and a care order had been made by consent. The care plan gave P six months to show that she had the capacity to care for M independently and long term. Thereafter, P moved to a new foster placement, which was terminated within weeks, on the grounds that P's care of M had deteriorated, that she had made serious threats against the foster mother, and that P and M were separated.



The judge held that, in the circumstances, the local authority had been entitled to remove M from P's care as an emergency, but that there had been a breach of P's rights under article 8 of the European Convention on Human Rights (the right to respect for private and family life) in deciding to abandon the care plan for rehabilitation without fuller consultation with P. He concluded that just satisfaction would be achieved by a declaration without monetary compensation.



M had later been freed for adoption. P submitted that the judge should have held that an award of damages was necessary to afford just satisfaction within the meaning of section 8(3) of the Human Rights Act 1998, and that in not awarding damages the judge had wrongly failed to take into account the principles applied by the European Court of Human Rights as required by section 8(4). The local authority submitted that the breach was purely procedural, and that the damages sought were for the failure to invite P to attend a meeting and make representations about planning when the evidence indicated that, at the material time, she would have been unlikely to have attended and, even had she done so, the outcome was unlikely to have been any different.



Held, the judge had been wrong to hold that the concept of damages did not sit easily with the welfare jurisdiction of family law. The court had awarded pecuniary damages for loss of opportunity in child-care cases, such as insufficient involvement of the parents in the decision-making process, W v United Kingdom (1987) 10 EHRR 29, H v United Kingdom (1988) 13 EHRR 449, and Venema v The Netherlands [2003] 1 FLR 552 considered.



The evidence established that, at the relevant time, P was threatening serious if not fatal harm to others and possibly to herself and M, and that it would have been dangerous to have given P notice of the removal of M or to involve her directly in planning. In all the circumstances, P was not entitled to compensation for loss of opportunity. The lost opportunity could only have been the possibility of a different outcome if proceedings had been issued at the relevant time, but the local authority had given P every chance to issue a legal challenge, and her circumstances and emotional state effectively precluded the option of an emergency application.



The breach was purely procedural. It was not the decision to proceed to adoption but the procedural failure in reaching that decision without consulting P. The evidence strongly suggested that P did not have the capacity to participate at the material time and that P's emotional outrage either preceded the removal or flowed from it. There was no evidence that exclusion from the decision-making process was the cause of any independent or additional injury to P. Accordingly, it was not necessary to afford to P any just satisfaction other than that resulting from the declaration finding a violation of her rights.



Appeal dismissed.



R Tolson QC (instructed by Foster & Partners) for the appellant; J Crowley QC, E Hudson (instructed by the local authority solicitor) for the respondent.





Legal Profession



Bad faith - Bar Council - barristers - disciplinary procedures - professional conduct - striking-out - summary judgments

Paul Diamond v (1) Guy Mansfield (2) David Etherington (3) Richard Price (4) Neil Mallon: QBD (Mr Justice Nelson): 20 December 2006
The applicant Bar Council members (M) applied for an order that the claim of the respondent barrister (D) be struck out or, alternatively, that summary judgment be entered

in their favour.



D claimed that the council had treated him unfairly in its pursuit of a complaint against him through its professional conduct and complaints committee, and he sought relief under several different causes of action. The complaint against D was that he had, in breach of paragraph 709 of the Code of Conduct of the Bar of England and Wales, written an article expressing his opinion about the issues in a case in which he was at the time instructed.



D had been instructed to make an application to the European Court of Human Rights in respect of a case involving the conviction for public order offences of an evangelical Christian preacher. The article had been written for the Evangelical Alliance and was published on its website and in a Christian magazine. D had thought that the article was to have been a private circular and had, moreover, had doubts as to whether paragraph 709 applied to European proceedings. He had therefore not applied foran exemption. Ultimately, the complaint against D had been withdrawn on the basis that there was insufficient evidence of the requisite mens rea.



D submitted that the council owed him a contractual duty to act fairly and reasonably, but in breach of that duty had pursued the complaint against him in bad faith, in an unfair manner, and without evidential foundation. He submitted that the duty to

act fairly was both procedural and substantive, and included the obligation to comply with article 6 of the European Convention on Human Rights (the right to a fair trial). He argued that the withdrawal of the complaint had deprived him of the opportunity of properly challenging the council's motives and conduct. He submitted that the purpose of his claim was to ensure judicial oversight of the conduct of the council.



Held, while the council, when considering or dealing with a prosecution in respect of a disciplinary matter, had to apply the principles of natural justice and could not act out of improper motive, malice or bad faith, that was a duty owed to all members and did not arise out of a contract with one individual member. The council's duty was to consider the interests of its members as a whole, and there was no basis for implying into the relationship between an individual member of the bar and the council any such contractual term as was contended for by D. Moreover, no duty of care in negligence was owed by the council to any individual member of the bar in respect of disciplinary proceedings, Calveley v Chief Constable of Merseyside [1989] 1 All ER 1025 applied.



The case of Gregory v Portsmouth City Council [2000] LGR 203 established that the tort of malicious prosecution was

not available in disciplinary proceedings. D's allegations were broad and implied a conspiracy on the part of some in the council to prosecute him for improper motives; however,there was no evidence whatsoever to suggest bad faith, malice, improper motiveor any conspiracy by the council, the committee or its investigating officers.



At the heart of D's claim was the assertion that the prosecution of the complaint against him had been unfounded, and that the fair trial provisions of article 6 had been violated. However, there was little doubt that paragraph 709 applied to European proceedings, and on the evidence it was clear that there had been a prima facie breach of paragraph 709 and that D had had a case to answer on the issue of mens rea. A prima facie case against D had existed and the council had been acting within its powers to proceed in the way that it had. While the court might have considered D's informal attendance a better course than summary hearing, the decision was in no way unfair, unreasonable or improper, and did not fail to show reasonable or proper cause. Moreover, when the committee decided that there was no longer a prima facie case, it had to withdraw the proceedings, and there was no right to a confrontation if the prosecution was withdrawn before trial.



Application granted.



Roger Stewart QC, Andrew Nicol (instructed by Berrymans Lace Mawer) for the applicants; the respondent appeared in person.





Commission - costs - disciplinary procedures - local searches - payments - professional conduct

Law Society v (1) Mark Hedley Adcock (2) Neil Kenneth Mocroft: QBD (Admin) (Lord Justice Waller, Mr Justice Treacy): 20 December 2006
The appellant Law Society appealed against a decision of the Solicitors Disciplinary Tribunal to dismiss disciplinary proceedings issued against the respondent solicitors (S). S cross-appealed against the tribunal's decision to order the Law Society to pay only half of their costs.



S had entered into an arrangement with a company (P), under which P carried out local authority and other searches in conveyancing matters on S's behalf. The client would be charged the nominal full cost of the searches but, after that fee had been paid by S, S would invoice P for 'commission' in

the gross amount of £20. No mention of the 'commission' arrangement was made to S's clients, who were charged the cost of the searches as a disbursement.



The Law Society had alleged that S had been guilty of conduct unbefitting a solicitor in that they had 'provided misleading information to clients regarding the cost of local searches' and had 'delivered inaccurate bills to clients... while receiving commission'. It also alleged that S's actions had been dishonest. The tribunal dismissed the case on a summary basis, having considered rule 10 of the Solicitors Practice Rules 1990, which provided that solicitors should account to their clients for any commission received of more than £20 unless, having disclosed to the client in writing the amount or basis of calculation of the commission, they had the client's agreement to retain it.



Held, the question was whether, on the allegations made by the Law Society, there had been a case for S to answer. A critical issue in considering that question was the true construction of rule 10. The rule was concerned with commission, but what S had been doing had nothing to do with receiving a commission. This case was not one where S was putting a third party in touch with a client and thereafter receiving a commission for having done so. What S had done was to have an arrangement, under which they effectively received a discount from the price that P was charging them, dressed up as a commission. Rule 10 therefore provided no answer to S's conduct. It followed that the tribunal had been wrong in its construction of rule 10.



It would not be appropriate to remit the case to the tribunal. Among other things, it was unlikely that the tribunal would hold that S had acted in a way unbefitting a solicitor, and a finding of dishonesty was inconceivable. Further, S had had an allegation of dishonesty hanging over them for a considerable time, and it was time that a line was drawn under the matter.



As to the order for costs, the tribunal had erred by failing to take account of the fact that the Law Society had made an improper allegation of dishonesty, and had in reality been seeking to bring a test case on the proper construction of rule 10. The court should therefore exercise its discretion afresh. For that purpose, it was important to have regard to the tribunal's view that S's conduct was not beyond criticism. Further, the fact that the Law Society had a public duty to investigate was a relevant factor, Bradford MDC v Booth (2000) The Times, 31 May applied, and Baxendale-Walker v Law Society [2006] EWHC 643 (Admin), [2006] 3 All ER 675 considered. The Law Society should not have to pay S's costs of dealing with the relevant investigation, but it should pay their costs in relation to the proceedings before the tribunal.



Judgment accordingly.



Gregory Treverton-Jones QC, Fenella Morris (instructed by Penningtons) for the appellant; Andrew Hopper QC (instructed by Hacking Ashton) for the respondent.





Criminal



Authorisations - demonstrations in vicinity of Parliament - freedom of peaceful assembly

(1) Stephen Blum (2) Aqil Shaer (3) Maya Anne Evans (4) Milan Rai (appellants) v (1) Director of Public Prosecutions (2) Crown Prosecution Service (respondents) & Secretary of State for the Home Department (intervener): QBD (Admin) (Lord Justice Waller, Mr Justice Lloyd Jones): 20 December 2006
The first, second and third appellants appealed against their convictions for taking part in a demonstration in a public place in a designated area, contrary to section 132(1)(b) of the Serious Organised Crime and Police Act 2005, where authorisation for the demonstration had not been given under section 134(2). The fourth appellant appealed against his conviction for organising an unauthorised demonstration in a public place in a designated area, contrary to section 132(1)(a).



The demonstrations had been peaceful and good-humoured. The appellants argued that the decision of the police to arrest, the decision of the Crown Prosecution Service (CPS) to prosecute and the decision of the court to convict had interfered with important rights under the European Convention on Human Rights, and therefore had to be justified under convention law. They submitted that the police, CPS and courts should have looked not just at the failure to obtain authorisation but also at the conduct of the demonstrators.



Held, since each of the appellants had been charged simply with a failure to obtain authorisation, the starting point was to consider the proper attitude to an authorisation procedure. European jurisprudence showed that an authorisation procedure would normally be compliant with the requirements of article 11(1) of the convention, Ziliberberg v Moldova (unreported) 4 May 2004 applied. Once it was accepted that the sections requiring authorisation were compatible with articles 10 and 11, it simply could not be a legitimate line of argument to say 'that may be so, but you must look at the activity taking place without authorisation, when considering whether there has been an infringement of article 11 itself'. Once an authorisation procedure was article 11 compliant, Parliament had to be entitled to impose sanctions where authorisation had not been obtained; otherwise, the finding that the sections were compatible was illusory.



Appeals dismissed.



Peter Thornton QC, Julian Knowles (instructed by Hickman & Rose, Imran Khan & Partners, Bindman & Partners, Liberty) for the appellants; David Pannick QC, David Pievsky (instructed by the Treasury Solicitor) for the respondents.





Tax



Capital gains tax - loan stock - non-residents - share exchanges - tax avoidance

Vincent Snell v Revenue & Customs Commissioners: ChD (Sir Andrew Morritt, Chancellor): 21 December 2006
The appellant taxpayer (S) appealed against a decision of the special commissioners ([2006] SpC 532, [2006] STC (SCD) 296) that he was liable for capital gains tax. The respondent commissioners cross-appealed against the decision that the exchange by S of shares for loan stock had been 'effected for bona fide commercial reasons' within section 137(1) of the Taxation of Chargeable Gains Act 1992.



S had sold his 91% holding in his company in exchange for three different types of loan stock. He had then become non-resident and not ordinarily resident in the UK, and redeemed the loan stock in the following tax year. The commissioners took the view that S could not claim the benefit of section 135 of the Act, under which the gain that would otherwise have arisen was deferred until redemption of the loan stocks, because the exchange had not been effected for bona fide commercial reasons and formed part of a scheme, one of the main purposes of which was avoidance of liability to capital gains tax within section 137.



S appealed and the commissioners held that the exchange by S of his shares for the loan stock had been effected for bona fide commercial reasons, but that such exchange formed part of a scheme or arrangement of which the main purpose, or one of the main purposes, was the avoidance of liability to capital gains tax, because, at the date of the exchange, S had the intention of becoming non-resident after selling his company to redeem the loan notes while non-resident.



The Revenue contended that the commissioners were wrong in their approach to the construction of section 137 and that, since the protected transaction was an exchange, it was essential to examine the form of the exchange and the reasons for it, otherwise the statutory condition had no effective scope. S submitted that the commissioners had either misinterpreted the statutory requirement of a main purpose, or their conclusion on that issue was perverse because no such main purpose could exist, given their finding that there remained a possibility that S might not become non-resident.



Held, the purpose of section 137 was to limit the application of sections 135 and 136. Sections 127 to 131 provided that where a company's share capital was reorganised, shares received in place of those previously held should be treated as the same holding. Sections 135 and 136 applied those provisions to exchanges of securities, whether involving a scheme of reconstruction or amalgamation or not, in which more than two persons were involved.



In such circumstances, it was obviously necessary for the exchanges to be for commercial reasons if the new and old holdings were to be treated as the same. But, if there was appropriate identity and value commensurate with bona fide commercial reasons, there was no reason why Parliament should have been concerned with whether the same result might have been achieved by some other legal form or means. The issue was whether the exchange in question was effected for bona fide commercial reasons. If it was, it was irrelevant to consider the reasons why the parties chose to structure their transaction in that way. The conclusion of the commissioners was correct and the commissioners' cross-appeal was dismissed.



The purpose of S was relevant to the identification of the elements of the scheme or arrangements. Once they had been identified, then it had to be ascertained whether their main purpose was the avoidance of a liability to capital gains tax. The commissioners had not misdirected themselves in relation to the relevance of S's purpose or intention, and the evidence was more than sufficient to justify the inference that they drew. Section 137 was concerned with the terms on which a liability to capital gains tax might be deferred. It provided for a right of deferral to be lost if it was to be used for the purpose not of deferral but of avoidance altogether. If that was the main purpose of the scheme or arrangements, it did not matter whether the scheme was formed for the purposes of tax mitigation, avoidance or evasion.



It was clear that the scheme's main purpose in this case was the avoidance of a liability to capital gains tax. The word 'liability' in section 137(1) could not be limited to an actual liability. By definition, such a liability could not be avoided, only evaded. Where, as in this case, the liability might be deferred on certain conditions, there was no reason to restrict the ambit of the word 'liability'

so as to exclude that which had been deferred. The decision of the commissioners was correct and S's appeal was dismissed, Inland Revenue Commissioners v Willoughby [1997] 1 WLR 1071 considered.



Appeal dismissed, cross-appeal dismissed.



Jonathan Peacock QC (instructed by DLA Piper) for the appellant; David Ewart QC (instructed by Revenue & Customs solicitor) for the respondents.