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					Barber v. Manchester Regional Hospital Board and Another

Queen's Bench Division

Barry J.

Judgement
BARRY J.
     stated the facts, read the relevant sections of the National Health Service Act, 1946,
and the National Health Service (Transfer of Officers and Compensation) Regulations,
1948, made thereunder, referred to the Terms and Conditions of Service for Hospital
Medical and Dental Staff (England and Wales) issued by the Minister on June 7, 1949
(clause 16 of which is set out above), and continued: It being admitted that the actual, or
the purported, termination of the plaintiff's appointment was carried into effect before
completion of the procedure laid down in clause 16 of the Terms and Conditions of
Service for Hospital Medical and Dental Staffs, issued by the Minister in June, 1949, the
first question for my consideration is whether or not that clause was incorporated in the
contract under which the plaintiff was serving the board as a consultant on the date when
his services were terminated. From a consideration of the correspondence I should have
thought that the answer to *189 this question was obvious despite Mr. Foster's subtle
and ingenious arguments. After the appointed day, July 5, 1948, there can, I think, be no
doubt that the plaintiff entered into the board's employment under terms similar to those
which were applicable to his contract with the Oldham Borough Council before the
appointed day. If nothing further had been done, and no further contractual arrangements
had been made, I think that there is a great deal to be said in favour of the view of the
Ministry that the terms and conditions of service would have had no application until the
plaintiff had entered into a new contract with the board in which those terms and
conditions were incorporated. In the present case I am entirely satisfied that the plaintiff
did enter into a new contract with the board on the terms indicated in the board's letter of
July, 1949. If anything in that letter is clear it is that from that date, or, from July 5,
1949, four days later, the plaintiff was being offered a continued service with the board
"subject to the terms and conditions of service above referred to," which were the terms
and conditions issued by the Minister on June 7, 1949, and reprinted for the whole
medical profession in the issue of the British Medical Journal of June 11.
     The plaintiff continued to serve the board after the receipt of this letter, and by so
doing I am satisfied that he must be deemed impliedly to have accepted the offer which
it contained. I wholly reject the argument that the letter of July 1, 1949, had no effect
because it purported to refer to whole-time officers. The plaintiff was plainly a
"transferred officer" within the meaning of the National Health Service (Transfer of
Officers and Compensation) Regulations, 1948. There was not, at any time, any possible
doubt on that point. As a transferred officer his position was identical with that of a
whole-time transferred officer, except that, when the terms and conditions came into
force with regard to remuneration, he would, as a part-time officer, be remunerated on a
different basis. Whether by mistake or otherwise, the defendants did in fact address this
letter to the plaintiff, and they never suggested that it was not to be regarded as
governing his terms of employment. Indeed, as the long history of this case shows, they
more than once relied upon the terms and conditions in order to adjust the plaintiff's
salary in various directions. In this connexion one cannot forget the Ministry's direction
which is printed in full in the British Medical Journal of June 11, 1949:
"Remuneration and conditions of service are interdependent and the application
retrospectively of the former should ideally be accompanied by the application
retrospectively of the latter."
    Mr. Foster's second submission, as I understand it, was to this effect: if, contrary to
his submission, any of the terms and conditions were incorporated in this contract, it
does not mean that they became part of the contract in the sense that *190 the applicable
terms and conditions became terms of the contract between the plaintiff and the
defendants. As I understand his argument, the phrase "subject to the terms and
conditions of service" should only be regarded as meaning that the terms and conditions
will regulate the future relationship between the plaintiff and the board as regards leave
and other such matters, and that the regulations will ultimately be incorporated into a
permanent contract. I am bound to say that in my judgment the second paragraph of the
board's letter of July 1, 1949, cannot possibly be held to bear that suggested
interpretation. I say no more about that branch of Mr. Foster's argument.
    Thirdly, he submitted that even if the letter and the words "subject to the terms and
conditions of service above referred to" can be said to incorporate some of the terms and
conditions, they cannot be said to incorporate all of them. In a sense, of course, as Mr.
Scott Henderson conceded, this argument is obviously correct. The terms and conditions
are a code and obviously there cannot be incorporated into the contract with a part-time
officer the terms and remuneration applicable to whole-time officers. Similarly, certain
other paragraphs in the terms and conditions are more applicable to the board itself, and
really contain directions to the board rather than directions which may be incorporated
in any contract between either a whole-time or a part-time officer and the board.
    However, in my judgment, clause 16 is a clause which can quite clearly be
incorporated in a contract made with either a whole-time or a part-time consultant, and if
a whole-time or a part-time consultant is employed by the board subject to these terms
and conditions, clause 16 is one of the terms and conditions incorporated into his
contract. That clause gives him a measure of security of tenure in his employment, and
prevents its termination, if he considers such termination to be unfair, until the
procedure laid down in clause 16 has been carried out. I can see no foundation for
saying that the words "subject to the terms and conditions of service" can on any
reasonable interpretation be said to exclude clause 16. If any terms and conditions are to
be incorporated in the contract, why should clause 16 be excluded? I have been unable
to find any satisfactory answer to that question. It is a clause clearly appropriate to
inclusion in the contract of a consultant, just as appropriate as the clauses relating to his
terms of remuneration, leave and other matters of a similar kind. The long-term contract
offered to the plaintiff did include words exactly similar to the words used in the board's
letter of July 1, 1949. It is common ground that it was the intention of the Ministry and
of the board that the terms and conditions should in fact be incorporated in the long-term
contracts, and they were in fact incorporated by the use of words exactly similar to the
words used in the letter of July 1, 1949.
     *191 In my judgment those words clearly mean that those of the terms and
conditions which are applicable to any particular contract are to be incorporated in it,
and I am quite satisfied that under the letter of July 1, 1949, which was never altered or
amended in any way, except as regards remuneration, the plaintiff's employment with
the board was, throughout his service, from that date regulated by those terms and
conditions.
     Mr. Foster, however, went further than the suggestion that clause 16 was not
incorporated in this particular contract. He submitted that in every contract, be it what
might be described as an interim contract of this kind or a permanent contract, that
clause could not form the basis of any contractual and binding agreement between the
board and a consultant. He adduced as one reason for that submission, that the operation
of this clause involved the co-operation of the Minister and that the board could never be
sued on the ground that the Minister had refused that co-operation and denied the right
of appeal to any particular consultant. Even if it does form the basis of some contractual
obligation, Mr. Foster submits, it must be subject to an implied term that its operation
can only be effective if and when the Minister consents to entertain an appeal; if he does
not do so prior to the termination of the consultant's employment, then the clause can
have no operation. In view of the relationship between the Minister and the board, which
is made quite clear in sections 3, 11, 12, 13 and 14 of the National Health Service Act,
1946, I have no hesitation in rejecting that argument. I see no reason to suppose that in
the negotiations which took place between the Ministry and the representatives of the
medical profession it was ever doubted that this clause would have contractual force. I
am quite satisfied that it has contractual force.
     I am unimpressed by the question raised by Mr. Foster as to what would happen if
the Minister failed to entertain an appeal. I do not think that the board would have to
continue to employ a consultant until that consultant's death or until he reached the
retiring age. It is, of course, a very unreal consideration, having regard to the
relationship between the Minister and the board. The board are administering the
hospital and specialist services on behalf of the Minister, and subject to such regulations
and directions as the Minister may give. It that were a real dilemma I see no reason why
its solution should be thrust upon the consultant rather than upon the board. If, indeed, in
the inconceivable event of the Minister refusing to entertain an appeal, although a right
of appeal had under his authority and directions been conferred upon the consultant, the
board were then placed in a difficulty, it would be for the board to apply for an order of
mandamus to compel the Minister to exercise his functions, and not for the consultant.
     I am, therefore, satisfied that at least from July 5, 1949, this term formed part of the
plaintiff's contract with the board. *192 The plaintiff was, of course, not bound to invoke
the clause, and unless he did invoke it, or unless in law he was excused from doing so
before his employment was terminated, he cannot, of course, rely on its provisions.
     Both the defendants, as I understand it, raise the singularly unmeritorious point, that
the plaintiff failed to send a full statement of the facts to the Minister, and that in
consequence of that failure the machinery of the clause was never invoked by him, and
never came into operation. In addition to its complete lack of merits this point, I think,
fails on two grounds. In the first place, it is clear from the correspondence that the
plaintiff did in fact supply a full statement of facts to the Minister. But that point seems
to me to be of less significance than the second point which I regard as quite fatal to the
defendants' submissions on this point. If ever there was a case of waiver, in my
judgment, this is one.
    On January 14, 1950, the Ministry were saying that no appeal lay. The board, when
they received information to that effect, as they did through the secretary on January 14,
elected to support the Minister's view of the situation which was, I think, based on
wholly inadequate information as to the facts of this particular case. Having done so
with some alacrity, they adopted the same position as that which the Minister had
adopted in relation to this appeal. In any event, I think the Minister can be regarded in
relation to this matter as the principal of the board. If he denied the right of appeal and
the board acquiesced in that view after they, at a very early stage, became apprised of it,
clearly, in my judgment, it does not now lie in the mouth of the board to say:
"We, having said no appeal will lie, now contend that you cannot invoke the provisions
of clause 16 because you did not put into operation the appeal which we said we would
refuse to entertain." I think that there is no substance whatsoever in that submission.
    In those circumstances I am quite satisfied that the plaintiff's contract was governed
by clause 16, and that no omission to send a full statement of facts to the Minister, even
if such omission was established, invalidates his contractual right, which was that his
employment should not be terminated until the machinery envisaged in clause 16 had
been put into effect and a decision reached by the Minister. Clearly, therefore, the
termination of the plaintiff's services on April 30, 1952, was a breach of the board's
contractual obligations to him. That having been established, it necessarily follows that
the plaintiff is entitled to some remedy.
    Before I turn to the question of the remedies or remedy available to the plaintiff, I
must say a few words concerning the other ground upon which he bases his claim,
namely, that the board's decision to dismiss him was made mala fide. The law, I think, is
clear: in ordinary circumstances, by giving the *193 appropriate notice, a master can
terminate his servant's employment and no one can question the motives of the master in
reaching a decision to do so. The position differs somewhat in relation to statutory
bodies which can only act for the purposes for which they are created. A statutory body
has equally an untrammelled right to terminate the services of one of its own employees
by giving appropriate notice, provided that decision is arrived at bona fide and, as I
understand the meaning of the word, it is that the decision must be reached, and honestly
reached, in the belief that it is a decision made in the best interests of the objects of the
statutory body -- in this case, the administration of the health services in the region
under the board's control -- and not made for some wholly extraneous reason. An
obvious one would be shown if it could be proved that a decision to terminate the
employment of a servant was made, not because it was genuinely or perhaps mistakenly
thought by the statutory authority that the termination of his services was in the best
interests of the service which they were administering, but, while knowing that they
were not furthering the interests of that service by dismissing him, they dismissed him
owing to personal spite against him. In that case I think that their decision could be
impugned in the courts.
    One thing is quite clear: the discretion of the authority must be the governing factor
in cases of this kind, and the court cannot substitute its views on whether or not a servant
should, in certain circumstances, have been dismissed for the views of the board,
provided that the views of the board were bona fide held.
    I need not cite a great deal of authority on this point. The law is most fully explained
in the judgment of Warrington L.J. in Short v. Poole Corporation, [FN4] where there are
passages which explain the position very clearly, and I need refer only to a passage from
the judgment of Eve J. in Price v. Rhondda Urban District Council, [FN5] which reads
thus:
"Argument has been addressed to me on the question whether the authority in engaging
and dismissing its employees is to be regarded as acting in a fiduciary capacity, but I do
not think it necessary to deal fully with these arguments, because in my opinion it is
sufficient to point out that this body, being a statutory body entrusted with statutory
powers, can only exercise those powers for the purpose and with the object of giving
effect to the statutory duties imposed upon it, and as one must assume that in dismissing
employees or in doing any other administrative act or adopting any particular policy
consistent with the powers conferred upon it it acts in good faith, it lies upon those who
assert the contrary to establish the truth of that assertion if they can."

FN4 [1926] Ch. 66, 90; 42 T.L.R. 107.

FN5 [1923] 2 Ch. 372, 389.

    Mr. Scott Henderson, on behalf of the plaintiff, asks me to say that in the present
case the board, through their members *194 and officials, were not acting bona fide or in
the proper performance of their statutory powers when they reached their decision to
terminate the plaintiff's employment.
    [His Lordship referred to the events following the report of the panel of
investigators, and said that, in his judgment, the plaintiff was in the result unfairly
treated, but that no one individual who took part in the consideration of those matters
had and intention to act unfairly. He was satisfied that both the senior medical
administrative officer and the secretary of the board had, for a long time prior to the
plaintiff's ultimate dismissal, formed the conclusion that he was a nuisance and that it
would be in everybody's interests if his services were terminated. His Lordship
continued:] I am not, however, satisfied that, however wrong they may have been in
reaching that conclusion, they were in any way lacking in bona fides, or that they
reached that conclusion on any ground other than the belief (albeit a mistaken belief)
that it would be in the best interests of the health service if the plaintiff were excluded
from it. Similarly with regard to those who sat on the various committees, I am far from
saying that I agree with a great deal of their conduct, or with a number of decisions
which they made. None the less, I am satisfied that none of those people intended to act
unfairly.
    The fact that certain officials of the board were prejudiced against the plaintiff; the
fact that he might have been given a much greater opportunity of presenting his own
case to the board if they decided to reject the panel's report; the fact that they might well,
having misled him about his right of appeal, have been somewhat more generous in
renewing their offer of a contract when they found the Minister was refusing to
recognize that right, are all matters which might affect the judgment of the court, if it
was for the court to decide whether or not the plaintiff's services were to be determined,
but that is not the legal position. The court has to be satisfied that these people were
acting mala fide, and I am not so satisfied; indeed I am satisfied that throughout,
however mistakenly, they were all acting in what they honestly believed to be the best
interests of the service.
     I come now to the question of the plaintiff's remedies, which I regard as perhaps the
most difficult problem in the present case. In the statement of claim the plaintiff asked
for a declaration that his employment was subject to the "Terms and Conditions of
Service for Hospital Medical and Dental Staff." I have already found that it was so
subject and whether or not that declaration is made, is a matter which is only of
academic importance. The second claim is for a declaration that his employment with
the board has never been validly determined. The significant word is the word "validly."
If the declaration asked for was one which merely declared that the plaintiff's
employment had never been lawfully or rightly *195 determined, that is a declaration
which, if necessary at all, would follow from the findings which I have already made.
     However, Mr. Scott Henderson's case is that the termination of the plaintiff's
employment on April 30, 1952, was not only a breach of the plaintiff's contractual
rights, but was in fact a nullity. In law, Mr. Scott Henderson submits, the plaintiff's
services were not terminated on April 30, 1952, and have never been terminated up to
today. In consequence he relies on the third prayer, namely, for an order for payment of
salary at the full rate of £2,375 per annum from May 1, 1952, to the date of the writ. Mr.
Scott Henderson puts the case in a way which, at first sight, appears attractive. The
terms and conditions, as he points out, provide in the clearest possible terms that the
procedure laid down in clause 16 shall be completed before the board's decision to
terminate a consultant's appointment is carried into effect. That procedure was never
completed and, therefore, he argues, the board's decision to terminate the plaintiff's
appointment can never have become effective; he is still in their service, and is still
entitled to his agreed rate of remuneration.
     Mr. Scott Henderson relied on certain authorities and in particular on Vine v.
National Dock Labour Board, [FN6] and on the judgment of Jenkins L.J. when the case
came before the Court of Appeal, [FN7] a judgment which was approved on appeal to
the House of Lords. [FN8]

FN6 [1957] 2 W.L.R. 106; [1956] 3 All E.R. 939.

FN7 Reversing [1956] 1 Q.B. 658, 673; [1956] 1 All E.R. 1.

FN8 [1957] 2 W.L.R. 106.

    In reply to this argument, Mr. Foster submits that this is an ordinary relationship of
master and servant. In his submission, the law in relation to master and servant is clear: a
contract for personal services cannot be enforced by an order for specific performance,
nor is it open to a servant to refuse to accept the repudiation of the contract of service by
his master and to sit back saying that the contract had never been validly terminated and
insist on the payment of his wages for the remainder of his working days. Mr. Foster
rightly said that it could not be suggested that a servant who, by the terms of his
contract, was entitled to three months' notice on dismissal, could say, if he was instantly
dismissed without notice, that that dismissal was ineffective, because no lawful
dismissal could take place without the giving of the requisite period of notice. Similarly
he says here that the plaintiff cannot say that the de facto determination of his services,
which undoubtedly took place on April 30, 1952, or just after -- as he was threatened
with criminal proceedings if he entered Boundary Park Hospital -- can be said to be a
nullity because it was in breach of a contractual obligation not to put that decision to
terminate into effect until after clause 16 had been allowed to operate.
    *196 Lord Keith, in considering this question in Vine's case, [FN9] used these
words:
"This is not a straightforward relationship of master and servant. Normally, and apart
from the intervention of statute, there would never be a nullity in terminating an
ordinary contract of master and servant. Dismissal might be in breach of contract and so
unlawful but could only sound in damages."

FN9 [1957] 2 W.L.R. 106, 118.

    Giving this matter the best consideration I can, I am unable to equate this case to the
circumstances which were being considered by the Court of Appeal and the House of
Lords in Vine v. National Dock Labour Board. [FN10] There the plaintiff was working
under a statutory scheme of employment, and clearly in those circumstances all the
Lords of Appeal who dealt with the case in the House of Lords [FN11] took the view
that it could not be dealt with as though is were an ordinary master and servant claim in
which the rights of the parties were regulated solely by contract. Here, despite the strong
statutory flavour attaching to the plaintiff's contract, I have reached the conclusion that
in essence it was an ordinary contract between master and servant and nothing more. In
those circumstances I feel bound to apply the general rule stated by Lord Keith, [FN12]
and to reach the conclusion here that the plaintiff's only remedy against the board is the
recovery of damages.

FN10 [1956] 1 Q.B. 658.

FN11 [1957] 2 W.L.R. 106.

FN12 Ibid. 118.

    [On the question of damages, his Lordship said that although, on the evidence, three
months' notice seemed to be the appropriate period, as he had held that the plaintiff's
contract was subject to clause 16 of the Terms and Conditions of Service for Hospital
Staffs, it was subject to three months' notice only if, on appeal to the Minister, the
Minister took the view that his services had not been unfairly terminated. He was
reasonably satisfied that if the appeal procedure under clause 16 had been put into effect
the Minister would have been advised that a substantial element of unfairness had
entered into the termination of the contract and that the Minister would have accepted
that advice. It was almost certain that as a result the plaintiff would have continued to be
a consultant at the hospital on the basis of eight notional half-days a week, for which the
basic salary was £2,375; but it did not necessarily follow that he would have held that
position for the rest of his working life and a fair period to take in relation to loss of
remuneration was five years. In addition, he assessed the loss to the plaintiff's private
practice arising from the termination of his employment at £1,500, and taking into
account tax deductible awarded total damages of £7,437 10s He gave judgment for the
plaintiff against the board for that sum. He declined to make the declarations asked for
by the plaintiff against the board but against the Minister, against whom judgment was
also given, he made the declaration asked *197 for by the plaintiff, namely, that in
failing to comply with the terms of clause 16 he had acted wrongfully and in breach of
his statutory duty under the National Health Service Act, 1946.]

				
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