Anandh, Estate of & Anor v Barnet Primary Health Care Trust & Ors

The Court of Appeal allowed the appellant's appeal on the primary repayments claim and allowed the respondents' cross-appeal on the overpayments claim. The court held that there was a real prospect of success for the appellant's defences to the claim for repayment of all fees paid: in particular, that the approval given by the Ophthalmic Qualifications Committee under regulation 4 of the National Health Service (General Ophthalmic Services) Regulations 1986 operated until set aside and that the 1986 Regulations required only that a contractor be included on the ophthalmic list. The court held that section 24 of the Opticians Act 1989 criminalises performance of eye tests by the unqualified but does not of itself render contracts for provision of eye tests void or unlawful. The judge's findings that limitation and quantum meruit were not available to the defendant were not appealed.

Background and parties. The appellant is the estate of a deceased ophthalmic practitioner, Dr Rabindra-Anandh. The respondents were Primary Health Care Trusts (and their predecessors) which had paid the practitioner for sight tests between 1988 and 2000. The Trusts sued for repayment of all fees paid on grounds including mistake of fact, unlawful payments under the National Health Service (General Ophthalmic Services) Regulations 1986 and constructive trust; they also pleaded a subsidiary claim for overpayments for tests not carried out.

Procedural posture. The appeal came from the Chancery Division (Lloyd J) following earlier interlocutory proceedings before Master Bowman; permission to appeal was limited by Chadwick LJ. Lloyd J had ordered judgment for repayment of all sums paid and maintained a judgment in default of defence; he also held that limitation and quantum meruit defences were not available.

Issues framed.

• Whether contracts and payments to the practitioner were unlawful, ultra vires or void ab initio under the 1986 Regulations or by reason of section 24 of the Opticians Act 1989.
• Whether the payments were recoverable in restitution (payments under a mistake) or as proceeds recoverable on account of unlawfulness, or whether the practitioner could resist repayment by defences such as change of position or quantum meruit.
• Whether the overpayments claim should be the subject of an account and enquiry.

Court’s reasoning and disposition. The Court of Appeal held there was a real prospect that the OQC approval under regulation 4 of the 1986 Regulations, though mistakenly given, was effective until set aside and that the 1986 Regulations on their face required only that a person be a contractor listed in the ophthalmic list; therefore it was arguable that formation of the contracts was not unlawful. The court concluded that section 24 of the Opticians Act 1989 created a criminal prohibition on unqualified performance of sight tests but did not, of itself, render contracts for provision of tests void. The court also observed that factual issues (including the practitioner’s knowledge of lack of entitlement) remained to be tried and that the practitioner’s change of position defence was a substantial argument. Accordingly the appeal was allowed in respect of the repayments claim and the appellant was given leave to serve a defence; the cross-appeal on overpayments was allowed and judgment on liability for overpayments was to be entered with directions for an account.

Appeal allowed in respect of the repayments claim and cross-appeal on the overpayments claim allowed. The Court held there was a real prospect of success for the appellant’s defences: the OQC approval under regulation 4 of the 1986 Regulations could be effective until set aside and the 1986 Regulations did not, on their face, render the contracts unlawful. Section 24 of the Opticians Act 1989 criminalises unqualified testing but does not automatically make contracts for eye tests void. The appellant was permitted to serve a defence to the repayments claim; the respondents were entitled to judgment on liability for admitted overpayments and an account was to be directed.

This is an appeal to the Court of Appeal from the High Court of Justice, Chancery Division (Lloyd J) in an order dated 11 April 2003. The interlocutory history includes a decision of Master Bowman dated 12 December 2002 refusing extension of time for service of defences. Limited permission to appeal was granted by Chadwick LJ. The Court of Appeal delivered its judgment on 27 January 2004 (neutral citation [2004] EWCA Civ 5).