Andreou v Institute of Chartered Accountants in England and Wales

A public body may also enter contractual relations conferring private rights on its members. Public-law functions and a public-law issue do not by themselves require judicial review or make a private action an abuse of process. Where a genuine private-law right is clearly identified, private proceedings may be appropriate, although previously rejected public-law claims cannot be revived. An express power to make disciplinary bye-laws, coupled with an undertaking to be bound by them, leaves no room for a general implied contractual term requiring that power to be exercised fairly and reasonably. A separate implied duty of fair procedure cannot contradict clear bye-law provisions or support a claim with no prospect of success.

Mr Andreou, a member of the Institute, was excluded following disciplinary proceedings. He failed to appeal within the 28-day period in Bye-law 85(c), and his judicial review proceedings were not continued within the required time. The Court of Appeal subsequently ordered that the claim continue as if begun by writ, without deciding whether a private-law right existed.

A deputy High Court judge dismissed the Institute’s application to strike out the claim as misconceived and an abuse of process. The Institute appealed. The issues were whether a private-law action could proceed where the Institute performed public functions and the validity of the bye-law had previously been challenged by judicial review, and whether the alleged implied contractual terms could sustain the claim.

Lord Woolf MR delivered the judgment of the Court.

1. Public and private law. The Institute performed public functions and was a public body amenable to judicial review in relation to some activities. Its important responsibilities were recognised in sections 25, 30 and 32 of the Companies Act 1989. That status did not prevent it entering contractual relations with members and conferring private rights on them.
2. Procedural route. The earlier judicial review challenge to the validity of Bye-law 85(c) had been dismissed. Mr Andreou would therefore abuse process if he sought to rely in the remaining proceedings on the same public-law claims. A private-law claim independently based on contract was different. The general rule in O’Reilly v Mackman did not create an insurmountable barrier where a clearly identified private right also required determination. Procedural flexibility was required, consistently with Mercury Limited v Telecommunications Director, the fifth principle identified in British Steel PLC v Customs and Excise Commissioners, the approach in O’Rourke v The Mayor etc of the London Borough of Camden, and Roy v Kensington & Chelsea & Westminster Family Practitioner Committee.
3. Implied term concerning bye-law-making. The member’s express undertaking to comply with the Charters and Bye-laws, together with Article 15(a) of the Supplemental Charter, left no room for a general implied term requiring the Institute to exercise its express power to make bye-laws fairly and reasonably. The specified two-thirds majority and Privy Council approval provided the contractual framework’s protection. Any further protection was a matter of public law.
4. Implied term concerning disciplinary procedure. The alleged duty to conduct disciplinary proceedings fairly could not require departure from the express bye-laws or extend the fixed appeal period. The alleged delay in notifying Mr Andreou of the disciplinary decision was modest. On his own account, it would not have affected when he read the letter. The private-law claim therefore had no prospect of success.
5. Obiter observation. The Court did not approve the existing bye-law. It considered it undesirable that the appeal period could expire before a member knew of the disciplinary decision. The Institute should consider starting time when the decision was brought to the member’s attention or giving the Appeal Committee power to extend time.

The body of the judgment allowed the appeal and dismissed Mr Andreou’s proceedings. The separately printed final-order line records the opposite result, creating an internal inconsistency in the transcript.

• Court of Appeal (Civil Division): The Institute appealed against the deputy High Court judge’s refusal to strike out the claim. The body of the judgment allowed the appeal and dismissed the proceedings, although the final-order line records the opposite result.
• Queen’s Bench Division: Mr S Goldblatt QC, sitting as a deputy High Court judge, dismissed the Institute’s application under Order 18 rule 19 and the inherent jurisdiction to strike out the claim as an abuse of process.
• Earlier Court of Appeal proceedings: The Court refused leave to appeal against Popplewell J’s refusal to extend time for entering the judicial review notice, but ordered that the claim continue as if begun by writ. It expressed no view on whether a private-law right existed.