England and Wales High Court (Administrative Court) Decisions

24. She gave evidence to the Tribunal. She was 18. Six allegations arose from her evidence.

i) An incident in December 1996. RE said she was lying on the floor refusing to do her interdependence programme work and that Mr Hyland came in and said she was being pathetic and a "drama queen" and he picked her up and shouted at her, at which point she slapped herself in the face and hurt herself. She also said he held her up against the wall. Mr Hyland's evidence was that she was already slapping herself when she was on the floor. He picked her up, but didn't shout at her. The Tribunal pointed out that the incident had occurred 3½ years before and that it was not sure either account reflected fully what had happened in a highly charged situation. Nor was it satisfied that in the circumstances picking RE up, holding her against the wall and shouting at her was inappropriate.

ii) and (iii) These allegations concerned abusive and sexualised language. Without being satisfied about exactly what was said and the exact context, the Tribunal was unable to go further than conclude that there "may well have been an element of misjudgment in Mr Hyland's use of sexualised language".

iv) The Respondent unreasonably sought to control RE's contact with Mrs Yabsley at the end of May 1995. Mrs Yabsley was the Head of Student Services at the local 6^th Form College. Mr Hyland's position was that RE tended to make inappropriately intense relationships with people and that the relationship with Mrs Yabsley was undermining her relationship with the Respondent. RE was making unjustified criticism of the Respondent to Mrs Yabsley with a view to enlisting her support against the Respondent in a destructive way. RE took a drug overdose on 1 June 1999. The Tribunal's conclusion was that the Respondent did not handle the situation well, virtually instructing Mrs Yabsley to break off relations with RE and being very cavalier with RE. They could have worked better with Mrs Yabsley.

v) Vetting letters and not allowing private telephone calls. The Tribunal found that the Respondent was in breach of Regulation 7 (5) of the 1991 Regulations and not just with regard to R.E. Regulation 7 (5) provides:

"The responsible authority shall ensure that a telephone is available for children accommodated in the home in a setting where it is possible to make and receive telephone calls in private."

I shall return to the circumstances later. As to vetting letters, the Tribunal's finding was that it was not satisfied the Respondent was deliberately trying to control her correspondence, albeit there were occasions when she felt her privacy was not being respected.

vi) Mr Hyland unjustifiably stopped her from taking a part time waitressing job in a restaurant. The Tribunal's conclusion was that Mr Hyland was entitled to take the view that the job was unsuitable.

S.B.

25. The allegation was that Mr Hyland called SB a "disgusting slut", "whore" and "fucking cunt." Evidence of this was given by Ms Hayman, who worked as a care worker at the Respondent between December 1997 and October 1998. SB was about 14 or 15 at the time, and the context was that SB had absconded and Mr Hyland told Ms Hayman that this was how SB thought of herself and he was trying to work with her. Despite the context, Ms Hayman considered the language inappropriate, albeit she could not remember the exact words. Mr Hyland was shouting. Mr Hyland denied using the words alleged, however the Tribunal saw no reason to disbelieve Ms Hayman. But at the same time it concluded Mr Hyland's lack recollection could simply indicate he could not remember anything untoward. Although making no specific finding it said it suspected Ms Hayman's reaction to the event indicated an element of misjudgment on Mr Hyland's part. Later in its reasons the Tribunal said there was no evidence of sexual impropriety towards the young people.

D.A.W

26. DAW was a twelve-year-old who had absconded. He was of low intelligence. The complaint, accepted by the tribunal, was that Mr Hyland overpowered him twice to show him that he was wrong to believe he could defend himself successfully against adults. The evidence was that when Mr Hyland did this DAW looked shocked and bewildered. The Tribunal agreed that the action was inappropriate but accepted it was not intended to hurt DAW and that if Mr Hyland had first made clear why he was doing what he did it would at least arguably have been a reasonable way of demonstrating his point. There is no suggestion that DAW suffered any actual harm.

K.L.

27. In September 1999 Mr Hyland wanted KL to come to his office to discuss having burnt a shower curtain. She refused and Mr Hyland instead went to see her in her home. Mrs Clarke, who was a resident care worker at the time, thought that this was a misjudgment on Mr Hyland's part as it was likely to provoke KL to violence. Mrs Clarke talked to KL to try and prevent that happening. It worked; she was not violent when Mr Hyland arrived and spoke softly to her. The Tribunal accepted that it was a misjudgment on Mr Hyland's part to go to KL's home.

28. Finally Miss Moore relied on a more general finding namely that:

"The Prospects Organisation have sometimes put inappropriate pressure on young people with divided loyalties."

29. This was in the context that where there was a disagreement between the Respondent and a placing authority the Respondent made the disagreement plain and sought to persuade the youngsters that its plan was better. An example was given that when BW was moved at short notice a number of staff gathered to say their good byes and were openly crying. The Tribunal, whilst not finding that inappropriate pressure was consciously applied, said that it could have been avoided.

In summary therefore the Tribunal found that in relation to four children and one general matter the Respondent's conduct fell short of what was appropriate. In another case (S.B), without making a specific finding, the Tribunal "suspected an element of misjudgment." It is of course for the Tribunal to assess the gravity of the failure both in the individual instances and collectively. In no instance was there found to be any hostile motive on the part of Mr Hyland or his staff, rather the failures seem to have been essentially errors of judgment or omissions.

Relationship with the Inspectorate and Local Authorities

30. Miss Moore drew my attention to a number of passages in the Tribunal's decision and it is unnecessary for me to repeat them all. At the beginning of the section in the decision headed: "Relationship with the Inspectorate" the Tribunal said:

"Part of the problem in this case is the Prospects Organisation and the Social Services Inspectorate have both regarded themselves as pre-eminent in their fields, have resisted challenges to their ways of thinking and have failed to engage in constructive dialogue with each other.

The major part of the blame for the lack of constructive dialogue lies with Mr Hyland. He is not just confrontational (which is not always a bad thing) but he has bombarded the Inspectorate with very large numbers of very long letters full of invective and unnecessary criticism. On occasions he has preferred to pursue minor criticisms of the Inspectorate rather than address their legitimate criticisms of the Prospects Organisation and this approach has tended to obscure a number of perfectly reasonable points that he has made. On the other hand, the Inspectorate have invited some of the correspondence and criticism by failing adequately to deal with those of Mr Hyland's points that are reasonable."

31. A little later the Tribunal said:

"The Inspectorate have also shown a remarkable reluctance to give Mr Hyland practical advice."

It pointed out that if he was told some aspect of running a home was not acceptable it was perfectly proper for him to ask the Inspectorate for guidance of what they expected him to do.

32. There is no doubt that Mr Hyland was a difficult person for the Inspectorate to deal with and that he wrote unhelpful letters. On the other hand, it is clear that the Tribunal felt the Inspectorate shared some of the blame for the poor relationship that had developed between them. Neither side acted in bad faith but the relationship was clearly very unsatisfactory. This appears to have led to the Inspectorate's failure to discuss things with the Respondent before making its report to the Secretary of State with the result that the report was very one sided.

33. As to the Respondent's relationship with the local authorities the Tribunal's conclusion was this:

"No local authority is forced to place a young person with the Prospects Organisation so that, if the Organisation gains for itself a reputation for being impossible to work with, they will ultimately go out of business. There is no doubt that they can be difficult to work with. On the other hand, the local authorities are not always right and ought to be able to cope with challenges. The Inspectorate wrote to every authority that placed young people with the Prospects Organisation. We have heard complaints from only a few of them, and even some of those with complaints have also spoken positively about the Prospects Organisation. Our view is that Mr Hyland is motivated by genuine concern for the young people in the Organisation's care and we are not satisfied that the decisions about the care of young people are motivated by commercial concerns as was suggested to us but he does not understand how local authorities work and so does not challenge them in acceptable - and effective - ways. We have already mentioned his letter writing style. We accept that he is also hectoring in his manner when dealing with some social workers face to face."

34. The critical question, it seems to me, is whether the relationship between Mr Hyland and his company with the Inspectorate and/or the local authorities had deteriorated to such a point that there was a significant risk of harm to the young people in his care. Absent such a risk, it does not seem to me that any misjudgment on the part of Mr Hyland in the way that he dealt with Inspectorate or the local authorities is material to cancelling the registration of the homes. The point applies with even greater force where My Hyland is not given a specific opportunity to remedy his deficiencies. Nowhere in the decision of the Tribunal is it suggested that the welfare of the children was seriously prejudiced.

Mr Hyland's language and behaviour toward staff

35. Miss Moore relied on five matters.

Mrs C.

36. On 28 July 1999 (not 1998 as appears in the Tribunal's decision) an employment tribunal found Mr Hyland had sexually harassed Mrs C, who was at the time a member of staff. The harassment occurred in Jersey on a trip to return ET for hospital treatment following the problems described earlier in this judgment. The Tribunal properly treated itself as bound by the finding of the employment tribunal but did not regard the circumstances as germane to the issue of cancellation of registration. ET was neither present at nor involved in any way in the sexual harassment.

Mrs Foreman

37. The Tribunal accepted her evidence that Mr Hyland made a very unpleasant comment to her when telling her to remove her lipstick, and that he once made a gratuitously offensive remark to her about a passer by. She, however, balanced these incidents against the positive aspects of working for the Respondent and indeed wrote a complimentary letter when she resigned on moving out of the area.

General

38. The other three matters were of a more general non-specific nature. Mr Hyland once said to a member of staff that he had to remind himself that he was her boss. The evidence of Ms Hayman was that it always seemed to be young female members of staff on whom the restraint techniques were demonstrated and thirdly there was evidence from other people that Mr Hyland was in the habit of using crude language when speaking to staff.

39. The Tribunal finding was that conduct towards staff was not very germane to the issue of cancellation of registration. There was a large staff group and although Mrs C's complaint to the Tribunal caused some divisions, it did not seriously disrupt the working of the staff to the disadvantage to the youngsters of the home. The Tribunal said:

"We deplore some of Mr Hyland's conduct towards staff - and it would no doubt attract disciplinary action against him were he an employee - but we are not satisfied that it is currently having a significant detrimental effect on the young people."

I have been unable to find any reason to disagree with this conclusion

Management failings putting the children at risk.

40. Miss Moore relies on seven findings of the tribunal.

i) "It is not in dispute that there were a number occasions when staff commenced employment before police-check forms and references had been received......... we find the Prospects Organisation's cavalier attitude to the lack of references to be inexplicable. This has been one consistent theme through inspection reports and the Prospects Organisation has simply ignored the criticisms.(P.45)."

The Tribunal did, however, point out that there was evidence that new staff to whom this applied were always adequately supervised because they were put on shifts with someone of some seniority and that provided there is no "substantial and unsupervised access to children on a sustained or regular basis" the employment of staff awaiting police checks may be acceptable. (Regulation 5 (3) of the Children's Homes Regulations 1991, as amended).

ii) On several occasions some considerable time elapsed before new staff were given restraint training and in the meantime they were expected to work with very challenging young people. Also, supervision sessions seemed sometimes to have been erratic. (P46).

The Tribunal accepted that the Inspectorate had some legitimate concerns, but pointed out that the staff from whom they had heard appeared generally to have had a good idea what was expected of them and to have been competent. They had seen the files of two of the children and the staff entries in them supported that view.

iii) Failure to hold formal management reviews of incidents.

The Tribunal said at P47 that the Respondent had not held management reviews of any incident in the sense required by the Inspectorate. However, they went on to point out that the Inspectorate had not made it clear what they meant by a "management review" or what they expected the records of such a review to contain. This, however, has now been attended to and the Respondent will hold the appropriate reviews in future.

iv) Handling of an incident on 1 January 2000

The Tribunal said at P47 that there was a failure properly to investigate and take action as regards an incident when a care worker was injured by one of the youngsters. There was a suggestion that a care worker had behaved inappropriately. The Tribunal went on to point out that while the Respondent was at fault, the failure had to be seen in context that the young person had been moved and the care worker was off work for a very considerable time.

v) Professional isolation.

The Tribunal concluded (P48) that the Respondent was to an extent professionally very isolated and that in the long run this was unhealthy. The Respondent's view was that it was different from others and had nothing to learn from them. The Tribunal accepted that it was different but said it had the impression outside influences were more welcome if they were unlikely to be challenging. While it deplored the Respondent's relative professional isolation, it was not satisfied it was having a significantly detrimental effect on the care of young people placed with them.

vi) The telephone call of at least one young person whose calls should not have been monitored was listened to by a member of staff and summarised in the records. This was unacceptable (P49).

The problem however appeared to have been overcome by pay-as-you-go mobile phones, albeit the solution was late in coming.

vii) Regulation 19 (2) (c) of the 1991 Regulations.

Regulation 19 provides for the notification of significant events. One such event is the suffering of serious harm by a child accommodated at the home.

There was an issue about this before the Tribunal. Four cases of self-harm by LT were relied upon as requiring notification. Two had resulted in LT being taken to hospital; two not. The Tribunal concluded the former required notification but the latter did not. In fact the placing authority was notified of both the hospital incidents, but the regulations required that notification should also have been given to LT's parents, the District Health Authority, the Somerset County Council and the Secretary of State. The Tribunal pointed out the Respondent had been criticised in the spring of 1998 for failing to report incidents of self harm when youngsters had been taken to hospital.

The whole question of notification was ventilated before the Tribunal at some length. It was obviously not an entirely a straightforward one and the Tribunal made some helpful suggestion for the future. The Respondent was found to have breached Regulation 19 (2) (c) but to a lesser extent than the Inspectorate had alleged.

41. In considering the allegation of perversity it has been necessary to examine the findings relied on by Miss Moore in some depth. This was a Tribunal that had considerable experience in the field of childcare. It heard evidence and argument over a period of eleven days. It was in a particularly good position to weigh the gravity of the findings that it had made and consider their relevance both individually and collectively to the welfare of the children in the care of the Respondent. The most serious findings are those that relate to the children directly. However, none of them involves a deliberate error on the part of Mr Hyland or his employees. Rather, they are errors of judgment in difficult situations. As the Tribunal observed, the failures have to be looked at not in isolation but collectively and it had to balance the faults of the Respondent against the positive aspects of what it was doing. The Respondent was, of course, coping with particularly challenging young people.

42. The Tribunal was concerned it had no power to propose any sanction short of closure. It pointed out that voluntary organisations are not agents of the Secretary of State and that those carrying on voluntary children's homes are not employees of the Secretary of State and are not obliged to do things the way the Secretary of State would wish so long as they comply with the legislation and take account of his guidance. Whether a failure to follow what is conventionally regarded as good practice means that the conduct of a home is "unsatisfactory" is a matter of judgment. The Tribunal added that voluntary organisations are entitled to a margin of appreciation. I am not entirely clear what the Tribunal meant by a margin of appreciation in this context. Running the home unsatisfactorily, like breaching the regulations, is a trigger to the exercise of a discretion to cancel the registration. Not every breach of the regulations or unsatisfactory feature in running the home necessarily leads to cancellation. That is where the exercise of discretion comes in. The Secretary of State, and likewise in this case the Tribunal, had to weigh up several factors including the nature and extent of the breaches of the Regulations and unsatisfactory features, the effect on the children of what had occurred, whether there was likely to be a recurrence, as well as the disadvantages to the children in the homes if they were closed. They concluded on balance, albeit with some hesitation, that the breaches of the regulations and other unsatisfactory elements of the conduct of the homes did not justify that sanction and that the Respondent should be allowed to continue the valuable work it did with young people. That is a conclusion that I am unable to say is perverse or, putting it in different words, that no reasonable tribunal could have come to.

43. Miss Moore's next series of submissions was on the basis that some of the Tribunal's findings of fact were perverse. This she put under seven headings.

R.E.

44. I have already referred in some detail to RE in relation to Miss Moore's first series of submissions. Miss Moore picks on the findings about the 1996 incident:

"We are not satisfied that it was inappropriate for Mr Hyland to pick RE up or even to hold her against the wall if that is what he did. Nor are we satisfied that it was inappropriate for him to raise his voice if she was hitting herself."

45. Miss Moore argues that the Tribunal effectively concluded that it was not inappropriate for a manager of a children's residential care home to pin a child against the wall and shout at her. There can, she said, be no occasion when this kind of behaviour is appropriate and the finding sends the wrong message to those who manage and run children's homes. But the sentences picked on by Miss Moore must be seen on context. What the Tribunal was saying was that it was unable to find exactly what had happened 3½ years before in a highly charged situation and that if Mr Hyland had held her against the wall or raised his voice it was not satisfied it was inappropriate.

46. Secondly, Miss Moore challenges the Tribunal's conclusion about Mr Hyland's Language to RE. Some of it is set out in the determination at P31 and more in her witness statement. The Tribunal pointed out that whether the language was inappropriate depended on exactly what was said and the exact context and that they were not certain of either. Miss Moore's argument is that the language cannot have been appropriate when used by the manager of children's home to a child in his care and that the finding that "there may well have been an element of misjudgment in Mr Hyland's use of (sexualised language)" was perverse. I am not able to accept that submission in the light of the Tribunal's conclusion that it was unsure precisely what was said and in what context.

S.B.

47. Again, I have already referred to SB. The submission is that the Tribunal did not disbelieve Ms Hayman and that it should have gone further than suspecting an element of misjudgment on Mr Hyland's part. It was not possible to conceive of circumstances when it would have been appropriate for Mr Hyland to use the language that he did. The Tribunal's conclusions here do seem to me to be somewhat equivocal, but they did say the context was critical and as to this they were uncertain. I am not satisfied that this finding was perverse.

L.T. and M.C

48. LT and MC were two youngsters who had a sexual relationship. It began when LT, the girl, who was the elder of the two, was a little under sixteen. The Tribunal said that while the sexual side of the relationship was not condoned and the two were watched as closely as was consistent with their needs for privacy, the emotional relationship was left to develop. The issue between the Inspectorate and the Respondent was whether the Respondent should have allowed the relationship to continue. The Inspectorate said the Respondent should have considered the termination of one of the placements and discussed the matter with the placing authority. The Respondent's judgment was that the benefits to LT and MC of the relationship outweighed the practical problems for the Respondent. They were satisfied it was not an abusive or coercive relationship. The Tribunal's conclusion was whilst it was clear the placing authority was told about the relationship it was unclear at what stage, because there was a lack of a proper record of telephone conversations. The Tribunal did not criticise the Respondent's handling of the problem and concluded that its judgment of how to deal with the relationship was a reasonable one. The only criticism was as to record keeping.

49. Miss Moore argued that the Tribunal should have found a serious error of judgment on part of the Respondent. The Respondent was in effect condoning conduct that amounted to a criminal offence (sexual intercourse with a girl under sixteen) and there was a real danger she might become pregnant. My initial reaction to the manner in which the Respondent handled this relationship was that it was in error. The sexual relationship at the start breached the criminal law and there was obviously a risk that LT might become pregnant. The easiest solution would have been to terminate one of the placements. However on reflection this was a complex problem as to which there were several aspects. It has to be borne in mind that the Respondent was dealing with very difficult and disturbed children and there were various considerations in deciding how best to handle the relationship. The broader interests of the children themselves had to be considered. The Tribunal's finding that the sexual aspect of the relationship was not condoned should be noted. I cannot conclude that the Tribunal's finding that it was more beneficial to the youngsters to allow their relationship to continue rather than cause trauma by splitting them up was a perverse one.

M.G.

50. MG was fifteen and in November 1999 Mrs Clarke saw marks on his neck that appeared to her to have been caused by a ligature. She was concerned that he may have tried to hang himself. There was also bruising on his chest. She was told by another member of staff that Mr Hyland was responsible. Mr Hyland's account was as follows. The day before the incident MG, who was capable of considerable violence, had bitten a member of staff and Mr Hyland was discussing that with him. MG became very angry and Mr Hyland took hold of his sweatshirt to protect himself from him but at same time talking to him and saying to him that he could control his violence. Mr Hyland accepted this was not a conventional method of restraint but said that, under the circumstances, it was better because it gave him sufficient control to stop MG hitting him more than once or twice, and it enabled MG to control himself rather than being totally overpowered. He accepted MG's neck had been marked by the friction from the sweat shirt against the skin and that he had a pinch mark where he had first grabbed him, but he did not accept he had caused any other bruising. He argued that his actions had not been inappropriate and that the incident had been of something of a turning point in the work with MG because, although he remained violent he had been able to control himself. He accepted he had apologised afterwards for the mark and had replaced the sweatshirt.

The Tribunal's finding was:

"We are not satisfied that Mr Hyland's account is inaccurate or that his action was inappropriate"

51. Miss Moore's argument was that the finding was perverse because it could not have been appropriate for the manager of a residential children's home to use an unconventional method of restraint that led to injury of the child concerned. It is quite wrong, she contends, to permit departure from established and approved restraint procedures.

52. Whilst I can see the force of Miss Moore's argument, it should not be forgotten that the Respondent was caring for some unusually difficult children. Mr Hyland was in several respects unconventional, but it was no doubt partly for that very reason that he was as successful as he was. Given that the acceptance of Mr Hyland's account is not challenged, I cannot see that the finding should be rejected as perverse.

Use of crude language

53. The Tribunal accepted Mr Hyland used crude language when speaking to staff. In one instance, however, there was a conflict of evidence between Mr Howarth, who alleged Mr Hyland made a sexually explicit comment about Mr Hyland's foster daughter, which Mr Hyland denies. In this instance the Tribunal accepted Mr Hyland's denial. Miss Moore argues this is perverse because in every other allegation of sexually inappropriate or crude language the findings were against Mr Hyland. There does, however, seem to me be a good reason for the finding in this instance in that Mr Howarth was unable to remember the context in which the comment was made.

M.N.

54. MN had a history of sex abuse against other children. He was not, however, a registered sex offender. He absconded on a number of occasions. On one of them he met two girls who subsequently telephoned to speak to him. The Respondent said on different occasions that it was urging MN's placing authority to take appropriate action, and that it was premature to take child protection action because MN was only subsequently registered as a sex offender. The Tribunal said that although there had been some contact between the Respondent and the placing authority, the extent of it was unclear because the Respondent did not keep proper notes of telephone conversations. The Tribunal said the Respondent ought to have made the local child protection team aware of the concerns about the young girls. But on the other hand, the local police were aware in general terms of MN's presence and background and there was no reason to think anything untoward had happened to the girls. The Tribunal concluded this was an issue for advice and did not weigh with them when considering cancellation. In my judgment such a conclusion was justified.

Murray Ronnie

55. Mr Ronnie was employed by the Respondent for a number of years, but his employment was in breach of the Disqualification for Caring for Children Regulations 1991 as he had been to prison for wounding and assault occasioning actual bodily harm, and written consent for his employment had not been obtained from the Secretary of State. Miss Moore contends that the Tribunal's finding that failure to obtain consent for his employment was not relevant to cancellation of registration was perverse. This submission was attractive until I looked in a little detail at the circumstances. Mr Hyland's evidence, which appears to have been accepted by the Tribunal, was that when he employed Mr Ronnie, which was before the homes were registered, he relied on the advice of NACRO. He genuinely, but mistakenly, believed consent was not required. Miss Moore says ignorance of the law is no excuse. But the Tribunal pointed out that part of the blame lay with the Inspectorate. When the home was being registered they issued a form asking for details of all members of staff and asking whether each had been police-checked. In Mr Ronnie's case the answer was in the affirmative, which was true. The Inspectorate argued that they ought to have been told results of the police checks. The Tribunal concluded the Respondent could not be expected to answer on the form a question that was not asked and that the form needed to be redesigned. The Tribunal went on to say that if the right question had been asked they were confident it would have been answered correctly, because Mr Ronnie's file showed the Respondent took some trouble to consider whether it was appropriate to employ him in the light of his convictions and had reached a rational decision to do so. The Tribunal also said it was at least possible that the Secretary of State's consent would have been forthcoming.

56. Having considered the surrounding facts as found by the Tribunal, I am satisfied that the Tribunal's finding that the circumstances of Mr Ronnie's employment were irrelevant to the issue of cancellation was a justified one. Accordingly, it follows that none of Miss Moore's seven allegations of perversity is made out.

57. Next it is said that the Tribunal misdirected itself in having regard to a number of irrelevant facts and that it failed to take into account or give sufficient regard to a number of relevant facts. Miss Moore divides this aspect of her appeal into six headings and I shall deal with each in turn.

No final warning.

i) In its conclusion the Tribunal said:

"Furthermore, we do not consider we should overlook the fact that the Prospects Organisation has not has the sort of final warning that we would expect before a cancellation procedure is set in motion and the further fact that many of the criticisms emerged for the first time after the procedure had been started."

58. This observation was made in a paragraph in the course of which the Tribunal had pointed out (i) that it had to retain a sense of proportion and balance the Respondent's faults against its positive aspects (ii) that no organisation was perfect and there would inevitably be misjudgments from time to time and (iii) that the homes were dealing with particularly challenging young people.

59. Miss Moore's point was that there was no requirement in the legislation for a final warning and that it would be wrong to assume a final warning should always be given before the cancellation procedure is set in motion. To have issued a formal warning would have been to put the interests of the Respondent above the welfare of the children. There were serious concerns about My Hyland's conduct towards the young people in his care and it was necessary to act quickly without delaying matters by issuing a formal warning. As the Tribunal pointed, out there was no sanction it could apply short of upholding the decision to cancel the registration. Cancellation was a draconian solution with serious consequences for residents, staff and the company itself. The value of a final warning is the opportunity to put right that which has gone wrong and to clarify misunderstandings. In my judgment two types of allegation can arise; conduct that impinges directly on the welfare of the children and conduct which is remediable and if not addressed may impinge directly on the children. In my judgment none of the matters established in the present case was such as to call for immediate closure. There was no finding that Mr Hyland or anyone employed by the Respondent had abused a child. Other things being equal, it is better that deficiencies should be remedied than that a home should be closed. As the Tribunal pointed out none of the matters complained of was so serious that urgent action had to be taken.

60. The Tribunal was critical of the manner in which the Inspectorate had set about the process of cancellation and in my judgment with good reason. It was not saying that a final warning was an essential precursor to the cancellation procedure, merely that one would have been appropriate in this case. I cannot accept Miss Moore's submission that the Inspectorate was right not to have given the Respondent a final warning in this case. The Inspectorate's action must surely be proportionate to the nature of the breaches of the regulations and otherwise unsatisfactory conduct of the homes.

Criticisms emerging after the cancellation procedure had began.

61. This was really the second limb of the "no final warning" criticism. The Inspectorate accepted that fresh criticism emerged after the cancellation procedure had started but contends that these were but examples of conduct to support an existing case. It is perhaps inevitable in a case such as the present that further matters emerge with time when, for example, proofs of evidence are taken.

62. Mr Hyland made the valid point that the Tribunal hearing was itself an appeal and that its purpose was to review the decision of the Secretary of State and decide whether to affirm it or direct it should not have effect. The original decision of the Secretary of State was based in large part on unparticularised generalisations (see letter 25 January 2000). This was the subject of criticism by the Tribunal who pointed out that while it is not necessary for the Inspectorate to have witness statements from all potential witnesses before the Secretary of State makes a decision, it is necessary to obtain and furnish to the Secretary of State sufficient details of those incidents on which they wish the Secretary of State to rely to enable him to make an informed judgment and to provide adequate particulars in the notice of proposal. Inadequate particulars in the notice of proposal were carried forward into adequate reasons for the Secretary of State's decision. These were not forthcoming until 9 June 2000 and then only with pressure. As the Tribunal observed, these weren't strictly speaking reasons at all because they included matters that were not known to the Secretary of State until later. Within reason this is not inappropriate because it is desirable that all matters should, where possible, be considered at one time and as quickly as possible. What is not permissible is to do what the Inspectorate did in this case namely to use the time allowed before the statement of the reasons had to be served to construct an entirely new additional case.

63. In any event it is not suggested that the Tribunal did not consider the late emerging criticism. It plainly did. I find no substance in the Appellant's compliant about the Tribunal's comment on the absence of a final warning and late emerging criticisms. Neither of these matters was determinative of the outcome of the appeal. The Secretary of State lost the appeal because the proved allegations taken together were not of sufficient gravity to justify closing down the homes.

Some matters of concern were in part the product of the procedure itself.

64. The Tribunal said at P53:

"We also bear in mind that some of the matters of concern, particularly those relating to staffing, are at least in part a product of the procedure in itself because the effect of proposing cancellation is not only to cause young people to be removed so that staff are laid off but also to weaken the security of the remaining staff making it more difficult to retain them and recruit good replacements."

I do not think the Tribunal was here doing other then making a general point. Mr Hyland submitted in argument that the Tribunal was correct in pointing out that the manner in which the Inspectorate had proceeded had had adverse consequences for his business. In so far as there was an issue at the hearing about staff turnover, it appears to have related to the pre-cancellation of registration period. But as I understand it, nothing conclusive emerged. I am unpersuaded that the Tribunal took into account an irrelevant consideration.

Wrongful disregard of sexual harassment and crude language

65. Miss Moore referred to five findings of sexual harassment and/or the use of crude language. I have touched on most of these when considering the question of perversity. At this point in her argument Miss Moore says these matters were germane to the issue of cancellation and/or a relevant factor that the Tribunal should have taken into account and not simply disregarded as irrelevant. She argues that the Tribunal failed to take into account the fact the children in Mr Hyland's care were mainly adolescents. The fact that Mr Hyland had shown himself capable of sexually harassing some of his female staff had to increase the risk that he might also sexually harass the vulnerable adolescent girls in his care.

66. The Tribunal listened to all the evidence, read the documentary material and formed its conclusions. Mr Hyland entirely accepted that there was a relaxed and open working environment that included a good deal of adult banter in which all the staff participated. What he did not accept, and this was submitted to the Tribunal, was that any of this spilled over into inappropriate areas to the detriment of the children. Importantly, the Tribunal found no evidence that it did. Mr Hyland made the point that the youngsters themselves often presented inappropriate use of language in the way they functioned, and that this was constantly being addressed with them, as the files bear witness. He added that achieving appropriate social interaction skills was a successful area of the Respondent's work. Mr Hyland pointed out that the Tribunal had a great deal of evidence that was very favourable to the Respondent both from former staff and youngsters who had been at the homes. In my judgment the Tribunal was entitled to conclude, having heard and read all the evidence, that the findings of sexual harassment and crude language did not impinge adversely on the welfare of the children.

67. Miss Moore specifically challenged the findings at P37 that there was no evidence of sexual inppropriety towards young people, saying there was some towards at any rate SB and RE. I have already referred to each of these children earlier in this judgment and in the light of the Tribunal's findings of fact I consider the finding of no sexual inpropriety towards them is justified.

68. She also specifically challenged the finding that Mr Hyland "did not seriously disrupt the working of the staff to the disadvantage of the young people being cared for in the homes (P37)." This statement was made by the Tribunal with specific reference to the employment tribunal affair. It said that although the affair caused some divisions there was a large group of staff. Again, what seems to me to be relevant is that the Tribunal heard the whole of the evidence and I am unpersuaded by the submission of Miss Moore that the effect on Mrs Curtis, Nick Howarth, Antonia Hayman and Julie Clark was of itself sufficient to require a different conclusion.

Mr Hyland's credibility

69. The submission here is that the Tribunal's findings of fact inevitably meant that Mr Hyland had lied both to the Tribunal and to the employment tribunal. The Tribunal ought to have taken this into account (i) when evaluating the credibility of other evidence given by Mr Hyland and (ii) in making its overall assessment whether the appeal should be allowed.

70. I cannot accept that the inevitable inference from the Tribunal's findings of fact is that Mr Hyland repeatedly lied. The Tribunal's findings seem to me to have been measured and careful. It is certainly true that there were instances where other evidence was preferred to his evidence and some instances where his judgment was questioned. But I do not read the Tribunal's decision as raising serious doubt about Mr Hyland's credibility, certainly not to the extent of rejecting his evidence root and branch or concluding he should not have been running these homes. In my judgment this submission is entirely misconceived. It does, however, perhaps illustrate the extent of the ill feeling between the Inspectorate and Mr Hyland. There is no finding that Mr Hyland failed to act open and honest way in his dealings with the children in his care, their parents or the authorities.

The children's welfare

71. Miss Moore's complaint is that the Tribunal, having identified a number of respects in which the conduct of the home was unsatisfactory, and whereby the welfare of the youngsters was or might have been effected, should have gone on to conclude that the homes should be closed. If it had given due regard to the welfare of the youngsters it would not have reached the conclusion it did. Due weight was not given to what should have been the paramount consideration - the welfare of the children. In my judgment, however, it is plain that the Tribunal did consider the welfare of the children very carefully. It should not be forgotten that there were minuses and well as pluses for the children if the homes were closed. The Respondent did valuable work with young people and the Tribunal had well in mind that the closure would bring that to an end. The Tribunal had to perform a difficult balancing exercise and I remain unpersuaded that in carrying it out it acted unlawfully.

Conclusion

72. The Secretary of State has left no stone unturned in endeavouring to reverse the decision of the Registered Homes Tribunal and I have, under the circumstances, felt it necessary to explore the Tribunal's findings at some length. This case contains a cautionary tale. The Inspectorate and Mr Hyland got across at each other when they should have been working together towards a common goal. Neither is exempt from blame. Each side seems to have been blind to the position and needs of the other. The Secretary of State, through the Inspectorate, holds a powerful weapon - a trump card - in being able to cancel the registration of voluntary homes. Where, as here, that weapon is used prematurely or inappropriately the consequences can be devastating. The very act of cancellation whether justified or not can (and it appears to have happened here) bring an organisation to its knees. A successful appeal may not undo the damage if in the result the home is closed down anyway. The power to cancel registration is therefore, it seems to me, matched by a great responsibility to see that it is not exercised unjustifiably.

73. In my judgment there are no grounds for overturning the decision of the Registered Homes Tribunal. Whilst it found that the Children's Homes Regulations 1991 had been breached and that there were other unsatisfactory features about the management of the homes, it then had to go on and exercise a discretion to decide in effect whether or not the homes should be closed. In my judgment it explored all the issues with great care and reached the conclusion that the Secretary of State's decision to cancel the registration of the homes should be set aside. That conclusion was justified in law. The appeal is dismissed.

MR JUSTICE SCOTT BAKER: For the reasons given in the judgment that has been handed down this appeal is dismissed. Now what is the cost position?

MR HYLAND: We would like to make an application for an order for costs, my Lord. Can I advise you also that there is a Mr Wekes here today to represent the company. We would like to ask for an order for costs, my Lord, in line with the rules as laid out in what I believe you refer to as the White Book Civil Procedure Rules.

MR JUSTICE SCOTT BAKER: Yes.

MR HYLAND: In those rules, my Lord, it allows us to have an expert to help us to calculate our costs and then have them assessed within your order.

MR JUSTICE SCOTT BAKER: Yes.

MR HYLAND: That is what we would like to follow, my Lord, if that is possible?

MR JUSTICE SCOTT BAKER: Yes, I will see what Miss Moore has to say.

MISS MOORE: My Lord, I do not contest the cost application. I understand my learned friend, Mr Wekes, representing the company, has an application for a summary assessment of costs, if that is still the position I would contest that. We have not had sufficient notice to be able to deal with the summary assessment of costs but an order for detailed assessment of the costs would----

MR JUSTICE SCOTT BAKER: There you are, Mr Hyland, you can have an order for detailed assessment of your costs.

MR HYLAND: Thank you very much, my Lord.

MR JUSTICE SCOTT BAKER: Yes, Mr Wekes, what is your position?

MR WEKES: My Lord, our position is that we ask for our costs to be summarily assessed today. We have supplied the court with a statement of costs which has recently been updated and slightly reduced.

MR JUSTICE SCOTT BAKER: Have you given it to the other side?

MR WEKES: We have, my Lord.

MR JUSTICE SCOTT BAKER: When?

MR WEKES: It was yesterday, my Lord. It was only yesterday when we found out that judgment was being handed down today.

MR JUSTICE SCOTT BAKER: Yes. Well, your clients did not take any part in proceedings, did they?

MR WEKES: No, my Lord.

MR JUSTICE SCOTT BAKER: No. What is your position, Miss Moore, about this?

MISS MOORE: Well, my Lord, we were sent a fax of the costs at four o'clock yesterday afternoon which did not have any dates on it. My solicitor faxed back when she returned from court at 5.15 saying, "Please could we have the dates?" We obtained a fax this morning at nine o'clock with dates on it and with some amendments to the original bill of costs, making adjustments to it. There are some items that we can show from the correspondence files that do not match up. We have only had a very limited opportunity to do a cross-referencing exercise. The practice direction does say that we should be entitled to a minimum of 24 hours notice.

MR JUSTICE SCOTT BAKER: Yes. So you would like a detailed assessment?

MISS MOORE: My Lord, we would, particularly since there is going to be a detailed assessment of Mr Hyland's costs in any event, it would seem sensible that both sets of costs be assessed at the same time.

MR JUSTICE SCOTT BAKER: That seems fair, Mr Wekes, does it not?

MR WEKES: My Lord, I am just concerned about the additional costs of a detailed assessment. The costs claimed by my client are not enormous, they are just over £9,000, given the considerable work that must have been incurred in preparing the respondent's notice and the quite detailed written outline.

MR JUSTICE SCOTT BAKER: Well, another way round, Miss Moore, might be to give you or your side proper time to consider the figures put forward on the summary assessment and the matter could be referred back to me when that has happened?

MISS MOORE: My Lord, yes, that could be done if your Lordship thinks that is a more convenient way than dealing with it by way of detailed assessment.

MR JUSTICE SCOTT BAKER: It is an awful waste of money, is it not, to have a detailed assessment on what looks like a relatively small figure, it is going to be under £10,000 anyway.

MISS MOORE: Well, my Lord, if we had an opportunity to go through in detail we would expect to be able to agree most of it. It is difficult to anticipate whether the costs of coming back to your Lordship for a detailed assessment would be greater than the costs of agreeing costs by way of a detailed assessment.

MR JUSTICE SCOTT BAKER: In reality you will probably agree the costs anyway, will you not?

MISS MOORE: There are certain items here, I have the fax in front of me, which we would not agree. But most of the items I do not think there would be an issue about.

MR JUSTICE SCOTT BAKER: I think I will adjourn your application, Mr Wekes, with liberty to both sides to apply to me for a summary assessment in the event that you cannot agree. You then have the opportunity of coming back to me, but there may be a costs risk attached to doing that. So you will have to take a view as to whether you want to do that or go for a detailed assessment. How would that do?

MISS MOORE: My Lord, that is a satisfactory way forward.

MR WEKES: Yes, my Lord.

MR JUSTICE SCOTT BAKER: There is one other matter and that is, Mr Hyland, you were provided with a draft of the judgment in advance, as were the solicitors and counsel for Prospect Care Services, but you were provided with it on the strict understanding that you were not to disclose its contents to anybody. My understanding is, from what I have been told, that you have been talking about it to people.

MR HYLAND: I have not disclosed the contents of it, my Lord, forgive me. I contacted Price Waterhouse and obviously we have discussed with our own people et cetera the decision. I apologise most sincerely if that----

MR JUSTICE SCOTT BAKER: I think it was made absolutely plain that the contents of the draft judgment were not to be disclosed to anybody. This is the difficulty when a litigant in person is given the same facilities as counsel and solicitors on the other side. If this sort of things happens the net result is that the judgment cannot be disclosed in advance.

MR HYLAND: Forgive me, my Lord, I apologise. The decision itself we discussed with people, it is relevant to so many people but the content of the - forgive me if I have misunderstood, I do apologise.

MR JUSTICE SCOTT BAKER: Yes. I do not know if any problem has arisen at your end on this, has it, Miss Moore?

MISS MOORE: I believe my instructing solicitors were informed of the result of the judgment by one of their clients, who had been informed by Somerset of the result I believe by Mr Hyland. Save for that small embarrassment I do not believe there were any particular difficulties.

MR JUSTICE SCOTT BAKER: Yes. Of course being a government department I think the practice is that solicitors and clients - you could tell your clients.

MISS MOORE: My Lord, it was just a matter of timing that was all.

MR JUSTICE SCOTT BAKER: Yes, there it is. I draw attention to this because it obviously highlights a particular problem when there is a litigant in person on one side. What the answer is, I do not know. But Mr Hyland has apologised and it may be that there has been a misunderstanding.

MR HYLAND: Yes, most sincerely, my Lord, I do apologise.

MR JUSTICE SCOTT BAKER: Yes, thank you.