Rahman and Partners (a firm) v North Central London Integrated Care Board

Where a contract requires a public decision-maker to act reasonably in the Wednesbury sense, the decision-maker must consider relevant matters, disregard irrelevant matters and reach a conclusion open to a reasonable authority. That test concerns the decision-maker’s thought process and outcome; it does not impose a separate requirement of procedural fairness.

An express contractual duty of good faith is context-dependent but ordinarily requires an honest and genuine consideration of termination. Predetermination or a closed mind may breach that duty. Where termination authority is vested in a committee, officers cannot rely on additional termination grounds that the committee never considered or decided.

The claimant partnership provided primary medical services under a General Medical Services contract. The defendant Integrated Care Board served three remedial notices concerning regulatory compliance, clinical governance, performance and infection control. It later terminated the contract, relying on clauses 569 and 571 and alleged failures to comply with the notices.

The claimant sought declarations that termination was ineffective or unlawful. The central questions were whether termination under clause 569 was reasonable and in good faith; whether a First-tier Tribunal decision concerning the Care Quality Commission’s suspension bound the defendant; and whether the defendant could rely on termination grounds not considered by the Primary Care Commissioning Committee.

1. Claim dismissed. The defendant was entitled to terminate under clause 569 because it was satisfied that the claimant had not taken the required steps in the Second and Third Remedial Notices.
2. The parties had agreed that reasonableness under clause 10 was to be assessed in the Wednesbury sense. That requires both limbs identified in Associated Provincial Picture Houses Ltd v Wednesbury Corporation: relevant considerations must be taken into account and irrelevant considerations excluded; and the conclusion must not be so unreasonable that no reasonable authority could have reached it. The claimant’s procedural-fairness complaints were outside that test and were not pleaded or included in the agreed issues. The court rejected the suggested reading of Braganza: its reference to the decision-making process concerned the decision-maker’s mental process, not procedural fairness.
3. The defendant’s assessment of non-compliance was reasonable. The responses to the Second Remedial Notice were materially incomplete across every category. The defendant was also entitled to conclude that 41 of the 44 requirements in the Third Remedial Notice had not been met.
4. The defendant acted in good faith. In context, clause 10 required an honest and genuine consideration of termination. Predetermination or a closed mind could in principle breach that obligation, but the evidence showed repeated opportunities to remedy deficiencies rather than a settled intention to terminate.
5. The First-tier Tribunal’s decision lifting the CQC suspension was not binding on the defendant and created no issue estoppel. The CQC was not the defendant’s privy. The proceedings involved different parties, issues, legal frameworks and evidence.
6. The PCCC had decided only to terminate under clause 569 for failure to remediate the Second and Third Remedial Notices. The defendant could not rely on clause 571 or alleged failure to remediate the First Remedial Notice because those grounds had not been considered or decided by the PCCC.