Iakovlev v ECI New Deal for Communities

A body distributing discretionary public grants owes applicants no private-law duty to fund a project or compensate them for time, earnings or expenditure when an application fails. Its public-law duty to act fairly and lawfully does not ordinarily create a damages claim of that kind. A disappointed applicant may potentially seek judicial review, but that remedy concerns the legality of the decision and may result in quashing and reconsideration, rather than compensation for wasted time. Permission to appeal requires a real prospect of success or another compelling reason for the appeal to be heard.

The applicant sought permission to appeal from a Master’s order striking out his claim against a public body that had declined to fund his proposed educational website project. He alleged breach of duty, professional misconduct, negligence, misrepresentation, deception and fraud, and claimed compensation for loss of time and earnings.

The Master held that there was no contract, no relevant duty of care, and no reasonable basis for the pleaded tort claims. The applicant argued that the application had been mishandled and that the decision was unfair. The central issues were whether the claim disclosed a sustainable cause of action and whether the proposed appeal met the permission threshold.

1. The application for permission to appeal was refused. The Master was right to strike out the claim because it disclosed no reasonable grounds and had no real prospect of success under Civil Procedure Rules 1998 rr 3.4(2)(a) and 24.2.
2. The defendant distributed grants on a discretionary basis. The decision whether to make a grant belonged to the defendant, not to the court. Applicants were free to apply, but were not entitled to compensation for the time spent on an unsuccessful application.
3. The alleged common-law causes of action were unsustainable on the pleaded facts. There was no contract, no duty of care giving rise to the claimed loss, and no sufficient pleading or evidence of misrepresentation, deception or fraud. Encouragement given to the applicant did not create an obligation to award funding.
4. The defendant nevertheless had a public-law duty to act fairly and lawfully. That duty did not provide a claim for compensation for loss of time or earnings. Judicial review was the potentially relevant remedy, but it would at most have led to the decision being quashed and reconsidered. Any such claim was also subject to a three-month time limit, which had expired by late September 2003.
5. The procedural confusion, derogatory internal comment and possible consideration of the wrong application form explained the applicant’s sense of unfairness, but did not establish a claim for damages. The requirements in Civil Procedure Rules 1998 Pt 52.3(6) were not met: the appeal had no real prospect of success and there was no other compelling reason for it to be heard.

• High Court (Queen's Bench Division): refused permission to appeal from the Master’s order dated 16 November 2004.
• Master Fontaine: struck out the claim under Civil Procedure Rules 1998 rr 3.4(2)(a) and 24.2 and entered judgment for the defendant.