This case concerns a decision by a magistrate to grant the appellant (Trent) a without notice application to cancel the registration of the owner of a nursing home under s30 of the Registered Homes Act 1984 (now repealed, but substantially re-enacted under s20 Care Standards Act 2000) The principal issue was whether Trent owed a duty of care at common law towards the proprietors (J) in respect of the consequences that followed the closure of the home. Following the grant of the without notice order the home was immediately closed and its residents re-housed in other accommodation. The Registered Homes Tribunal (RHT) allowed an appeal by J against the making of the order by the magistrate’s court and ordered that the order for cancellation should cease to have effect. However by this time J was unable to resuscitate their business. J argued before the High Court that the decision by Trent to apply for a without notice order was made without any justification and was unreasonable in the public law sense. The judge held that there was no emergency and no deficiencies at the nursing home that could have justified the making of an application without notice. He found that the necessary degree of proximity existed between both parties, the losses suffered by J were foreseeable and it was fair just and reasonable to impose a duty of care upon Trent. X v Bedfordshire County Council applied. He rejected the policy argument that by imposing such a duty of care that it would interfere with a local authority’s performance of its statutory functions. He was critical of the way in which the application was made and that it “bordered on the reckless”. Trent had failed to act in accordance with a practice accepted at the time as proper by a responsible body of persons in the same field and that the duty of care had been breached. The judge made an order that Trent was liable for breach of the duty of care in damages for the loss suffered by J.
The issues for the Court of Appeal was firstly whether the losses were as a result of the magistrates decision and secondly whether or not the judge had been correct in finding that J was owed a duty of care by Trent. On the first issue the Court of Appeal held that the in making the application Trent would have anticipated that the magistrates would have made the order therefore they were responsible in law for the losses and these did not arise from the magistrate’s decision.
On the second matter the court considered previous authorities in relation to duty of care in respect of public bodies towards those with whom they had relationships. The starting point was Caparo plc v Dickman in which the House of Lords decided that a purchaser of shares in a company who relied on a negligently produced set of accounts to ascertain its financial position was owed no duty of care by that company since the statutory purpose of the accounts were not provided for prospective purchasers to make investment decisions. It also considered X v Bedfordshire County Council which involved a claim against a local authority in damages by 5 children who claimed damages for personal injuries caused by the authority for failing to take steps to protect them from harm by the children’s parents. The Court of Appeal in that case held that there could be no breach of a statutory duty of care and a claim would only lie if there was a breach of a duty of care at common law. The plaintiff’s arguments were rejected because if such a duty was to be imposed it would apply to all bodies involved in protecting children and that would not be fair. It could also interfere with the delicate task of making difficult decisions and a duty of care might make authorities adopt a defensive and cautious approach which might not be in the best interest of the child. In D v East Berks Community Health Trust. The Court of Appeal found that a local authority owed no duty of care to parents of children where childcare decisions were being taken by health and child protection professionals. The imposition of a duty would impact on the doctor’s approach to his task and create a conflict of interest.
In summary the Court found that previous authorities had frequently held there was no common law duty of care owed by public bodies. The reason was because it was important that the law in this area developed incrementally particularly where the issue of public resources were involved.
Returning to the present case the Court looked at the scheme of requirements imposed by the 1984 Act, in particular s30 which provided for the cancellation of registration of a person in respect of a care home. It was axiomatic that s30 was only to be used in an emergency and in a situation where the need to protect the residents and the urgency of the situation outweighed the right of the registered proprietor to be heard first. It considered a decision in Martine v South East Kent Health Authority in which similar facts arose and the issue was whether it was fair, just and reasonable to impose a duty of care on the defendant local authority. M argued that the magistrate’s decision was merely a “rubber stamp” and that this was not a sufficient check and balance on the actions of the local authority. The court disagreed. It held that the justice of the peace sat in a judicial or quasi-judicial capacity and was under an obligation to fully and properly consider applications before him. A duty of care could not be imposed simply because the magistrates might not fulfil their duties properly.
The Court of Appeal held that the judge had erred in focussing on the extent of the breach by Trent rather than the existence of a duty of care. The High Court should have found case/s analogous and in the same category to the one before it involving public bodies. This case fell within a broad category of cases in which public authorities had a duty to protect vulnerable and infirm persons. There was nothing in the registration provisions concerning the protection of the economic interests of registered persons. The object of s30 was to protect vulnerable persons where there was a serious risk of harm. This risk of harm took precedence over the interests of the proprietor. J also claimed that there was a lack of an effective remedy against the grant of a without notice order. The Court agreed that J could only seek a judicial review which might prove difficult in the circumstances but there was no absolute right to access a court and access could be restricted provided it was for a legitimate object and it was proportionate, Z v UK considered. The court was not persuaded that there was no legitimate object in this case and there was likely to be good reason to prevent a party from obtaining interim remedies involving home closure with infirm residents. Another argument presented by J in favour of imposing a duty of care was that J could not claim compensation from the RHT. The Court sympathised but felt that the court had to be cautious in imposing obligations to pay compensation which might cause a diversion of public funds away from the objects for which Parliament had intended. There may also be a conflict of interests by imposing a duty of care towards proprietors in situations in which residents were at risk.
In his dissenting judgment Jacob LJ argued that there was no good reason for not telling J about the application and that the evidence in support of the application was materially defective and in part misleading. There was an implicit duty on Trent to make a full and frank disclosure and this duty extended to those affected by the order of cancellation obtained as a result of performance of that duty. He saw no reason why persons who were adversely affected by a duty of full and frank disclosure should not be owed a duty of care. He disagreed that there were policy reasons for not imposing a duty of care and that it would not offend the incremental approach in extending the application of the law by imposing a duty of care in negligence to those directly affected.
Held: the Judge had been wrong to hold that it was fair, just and reasonable to impose a duty of care on Trent. Wilson LJ agreed. Appeal allowed.