NHS Commissioning Board (known as NHS England) v Dr Manjul Vasant (t/a Mk Vasant & Associates)
| Jurisdiction | England & Wales |
| Judge | Lord Justice Lewison,Lord Justice Coulson,Lord Justice Longmore |
| Judgment Date | 16 July 2019 |
| Neutral Citation | [2019] EWCA Civ 1245 |
| Date | 16 July 2019 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A2/2018/2908 |
Lord Justice Longmore
Lord Justice Lewison
and
Lord Justice Coulson
Case No: A2/2018/2908
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE, QUEEN'S BENCH DIVISION
Mr Justice Murray
HQ17X02248
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Rhodri Williams QC (instructed by Hill Dickinson LLP) for the Appellant
Ms Marie Demetriou QC & Mr Simon Butler (instructed by Simon Butler) for the Respondents
Hearing date: 4 th July 2019
Approved Judgment
The issue
The essential issue on this appeal is whether NHS England, as successor to Croydon PCT, is entitled to terminate contractual arrangements under which three dentists supply an Intermediate Minor Oral Surgery (“IMOS”) service to the NHS. That, in turn, requires consideration of the contractual effect of a purported variation to the General Dental Services Contract (“the GDS contract”) under which the three dentists supplied general dental services. Murray J held that NHS England was not entitled to terminate those contractual arrangements. His judgment is at [2018] EWHC 3002 (QB). NHS England appeals. The three dentists advanced an alternative argument based on estoppel; but in view of his conclusion on the contractual arrangements, the judge did not need to deal with it. It forms no part of this appeal either. There has been no claim to rectify the variation.
The initial contractual framework
Each of the dentists provided general dental services under a GDS contract originally made with Croydon PCT in 2006. NHS England is the successor to Croydon PCT. The GDS contract is a lengthy and detailed standard form contract. Many of its provisions are mandated by the terms of the National Health Service (General Dental Services) Regulations 2006. Although we were taken to many of the regulations, in the end I do not consider that they add to a consideration of the GDS contract itself. Clauses 16 and 17 of the GDS contract provide:
“16. Subject to clause 17 the Contract shall subsist until it is terminated in accordance with the terms of this Contract or the general law.
17. Additional Services provided by the Contractor will be negotiated separately to this contract. These will include services listed in clauses 18–20.”
Part 8 of the GDS contract (clauses 74 to 76) specifies the mandatory services which each contractor must supply. They are specified in some detail; but the contract provides expressly that they do not include “additional services”. “Additional services” are defined by clause 1 of the GDS contract. The definition includes “advanced mandatory services”; which are, in turn also defined by clause 1. It is common ground that the definition of “advanced mandatory services” is wide enough to encompass IMOS. Part 9 is the section of the GDS contract that deals with Additional Services.
In many places the clause numbers contained in the GDS contract are not accompanied by any contractual text. Instead they are said to be “reserved”. Clause 4 explains that where the parties have agreed in writing that a clause is reserved, that clause is not relevant and has no application to the contract.
Part 10 of the GDS contract is headed “Further Services”. It consists of clauses 168 to 172, each of which is “reserved”. Thus, unlike Part 9 (which contains substantive provisions about Additional Services), Part 10 contains no substantive clauses at all.
As the judge explained, clauses 77 to 100 in Part 8 of the GDS contract set out the basic mechanism by which the contractor accounts and is compensated for mandatory services provided to patients, namely, using “units of dental activity” (“UDAs”). Schedule 4 to the GDS contract stipulates a number of UDAs that must be provided during the course of a year and the sum to be paid to the contractor in respect of that number of UDAs for that year. The value of a UDA is subject to annual adjustment; and the contract specifies the evidence that a contractor must submit to the PCT or NHS England in order to justify the number of UDAs performed.
Part 21 of the GDS contract contains a number of clauses all concerned with dispute resolution.
The GDS contract may be terminated by mutual agreement; or by notice given by the dentist. Clauses 305 to 362 set out detailed circumstances in which NHS England may terminate the contract. But it is common ground that none of them apply in present circumstances. NHS England has no general right to terminate the GDS contract without default by the dentist.
Part 22 of the GDS contract contains terms about variations to the contract. Clause 287 (which is in Part 22) provides:
“287. Subject to clause 200, no amendment or variation shall have effect unless it is in writing and signed by or on behalf of the PCT and the Contractor.
Clauses 366 and 367 provide:
“366. Subject to clause 200 and any variations made in accordance with Part 22, this Contract constitutes the entire agreement between the parties with respect to its subject matter.
367. The Contract supersedes any prior agreements, negotiations, promises, conditions or representations, whether written or oral…”
Clause 200 is not relevant for present purposes.
In 2007 Croydon PCT established a pilot scheme designed to transfer IMOS from hospital to primary care, in order to reduce waiting lists and to save cost. The three dentists in this case participated in that scheme. For that purpose, they entered into separate contracts with Croydon PCT. Each contract had a fixed duration of 12 months from 1 December 2007, although the term was extendable by agreement. In relation to this 12-month pilot scheme, there was a triage system to decide which patients referred by general practitioners for an IMOS treatment should be seen at the Hospital and which should be seen by one of the four IMOS services providers. The terms of the service were set out in a contract headed “Contract for the Provision of an Intermediate Minor Oral Surgery (IMOS) Service in a Primary Care Setting” (“the IMOS contract”). Although shorter than the GDS contract, the IMOS contract runs to 62 clauses, one Appendix and four annexes. The IMOS contract includes provision about its scope (clauses 5 and 6); service quality (clauses 10 to 13); compliance with national standards (clauses 14); incident management (clause 16); monitoring and information requirements (clauses 19 to 25); contract volume (clauses 29 to 33) and so on. Clause 17 of the IMOS contract provided:
“This service is for the provision of an IMOS service as identified in the advanced mandatory service specification for IMOS (Appendix 1)”
Payment under the IMOS contract was not tied to UDAs, as it was under the GDS contract. Instead, each dentist was entitled to a fixed sum payment per treatment. Although in the first instance the IMOS contract ran for a fixed term, clauses 51 and 52 provided for earlier termination by one month's notice.
As foreshadowed by clause 17, Appendix 1 contains a more detailed description of the services to be provided as the IMOS service. It includes provisions for triage, three possible care pathways, eligibility for the IMOS service, and provisions dealing with payment. Under the heading “Costs” the Appendix states that the PCT will negotiate with the providers a “fee per patient” and a “sessional rate” for oral surgeons and triage.
The fixed term of the IMOS contract expired on 30 November 2008. The dentists continued to supply IMOS to Croydon PCT; and continued to be paid at the rates specified in the IMOS contract. The judge held at [81] that the IMOS contract continued by conduct. There is no challenge to that conclusion. The essential question on this appeal is whether that state of affairs continues, or whether the provision of IMOS had been incorporated into the GDS contract. NHS England says that the state of affairs continues, with the result that it is entitled to terminate the ongoing contract by notice under clauses 51 and 52 of the IMOS contract. The dentists, on the other hand, say that the provision of IMOS has been incorporated into the GDS contract, with the consequence that NHS England has no right to terminate the IMOS service without default by the dentist.
The purported variation of the GDS contract
On 7 April 2009, Mr Butcher of Croydon PCT sent the following e-mail to the dentists:
“Dear all,
You will shortly be receiving two copies of a GDS contract variation form from the PCT. These make a clause change to the contract, in order for you to provide advanced mandatory services under GDS arrangements. This seems a far more sensible approach to me [than] re-signing the present IMOS contract. All governance arrangements now fall under the GDS contractual arrangements, rather than a contract which was originally intended for the PCT's dermatology service! Can you please sign both copies of the form, and return one to me?
Whilst I'm writing, I'm pleased to announce that the fee for a procedure as of 1/04/09 will be £157.50. All other tariffs remain the same as last year.”
At about the same time each of them received a Contract Variation Agreement Form (a “VAF”) signed on behalf of Croydon PCT. The VAF consists of a single page. The upper part of the form is entitled “Nature of Contract Variation” and consists of a number of boxes for ticking. Two boxes are ticked: “Clause Change” and “Additional Services”. The next part of the form is for the description of the variation. It contains the following text:
“Part 10 ‘Further Services’
Clause 168 changed from ‘ Reserved’ to ‘Providing an Advanced Mandatory...
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