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	England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Iakovlev v ECI New Deal for Communities [2005] EWHC 463 (QB) (06 April 2005) URL: http://www.bailii.org/ew/cases/EWHC/QB/2005/463.html Cite as: [2005] EWHC 463 (QB)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		6th April 2005

Mr Justice Tugendhat:

1. This is an application for permission to appeal from the decision of Master Fontaine dated 16 November 2004 striking out the Applicant's claim against EC1 New Deal for Communities ("NDC") as disclosing no cause of action under CPR 3.4.
2. The applicant is aggrieved by a letter dated 20^th June 2003 from the defendants. The defendant distributes discretionary government grants. The letter is a decision informing the applicant that on 9^th June his application for funding had been considered, but that a recommendation had been made not approve this project. The reasons given are that;

(i) The project did not fit in with the ethos of NDC,

(ii) No clarification was given on where the balance of project costs (£341,750) was to come from,

(iii) No recognition was given of the diverse culture in London EC1 and that not all children would celebrate Christmas and

(iv) No clarification was given on how the project was to be managed or staffed or the recruitment process. The letter states that this recommendation was endorsed at a meeting on the 13^th June 2003 by a Board Meeting of NDC.

3. The applicant is, as he describes himself, a former Russian journalist. He states that after over two years of unemployment, and on advice of his Job Centre advisor, he decided to expand his professional qualifications by completing a number of IT courses. One of these included web design organised by the New Deal (50+) Government programme. During this, he says, he invented and developed a program "Christmas Wish Website" for underprivileged children aged 7 to 14 years. It was designed for correction and improvement of children's behaviour and school discipline which, if implemented, could he said become a powerful instrument for kids social and academic education as well as the improvement of their behaviour.
4. NDC issues Project Application Guidance Notes. In these, as one would expect, there are set out guidance notes for submitting an application for a grant. It is made clear that while NDC would like to support most projects, resources are limited and not all projects will be supported, or for the sums applied for, or at the times requested.
5. On 28^th November 2000 the applicant received a letter from New Finsbury New Deal, of the same address as NDC, which I assume to be an earlier name. That records that body had decided not to approve the applicant's proposal for an "early win project". However, the letter continues that the Board was interested in the proposal and encouraged the applicant to submit a "long term" project to be considered for inclusion in the 10 year Delivery Plan. An application form and guidance notes were enclosed. The deadline for that proposal was 8 December 2000.
6. On 14^th March 2002 the applicant wrote a letter to New Finsbury New Deal. It described the project and enclosed the computer program for assessment. At some point the original of the letter was produced to the Applicant and he saw written on it the words "slightly mad bloke little will come of it I think" and the initial underneath seems to be a capital R. This is an offensive comment and unsurprisingly the applicant has taken offence at it. However, it is an expression of opinion apparently internal to the recipients of the letter. The applicant has talked of defamation proceedings, but no such proceedings would have any realistic prospect of success.
7. On 3 March 2003 NDC wrote to the Applicant a letter signed by Mr. O'Connell, Employment Enterprise Programme Manager, with reference to the project. He said:

"The proposal is in principal very interesting and I am happy to provide any assistance I can taking the application forward. For this purpose I have provided you with an application form on which you will present the detail of the project for assessment by the Partnerships appraisal process… I have discussed your proposal with both the Programme Director Tracy Thompson and her Deputy Natalie Ross who are keen to see it developed. The latter has a particular interest as she is also Education Theme Programme Manager and therefore any approved financial support for the project may come from her theme. I look forward to working with you on your promising proposal".

8. On 27^th March 2003 the applicant prepared his application for funding. The document is a substantial one with many details. Under paragraph 1.4 headed "Project Summary" it is stated that the commencement date is "hopefully March 2003 as soon as we receive at least £25,000. Completion date: No completion date we hope it will be a progressively running project". Under "project cost and funding" it is said that the total project cost is not specified due to growing expenses as the project progresses and as to the total NDC required it said that £25,000 is required as the starting amount. The project is briefly described as "educational Christmas Wish Website, designed to encourage kids of 5 to 14 years old for better behaviour indoors and outdoors".
9. On 14^th April 2003 a final version of the application form was submitted. In this the "project costs and funding" section is entirely different. It reads "total project costs: £744.750 total NDC required: £640,000 for 4 years (2003 – 2006)".
10. The decision letter followed on 20^th June 2003. The applicant was dissatisfied and pursued the matter with his Member of Parliament. There is before me a substantial report dated 30^th October 2003 from Ms Bayliss of the Local Government Team Central and South Division Government Office for London to Lord Rooker. This sets out that NDC have provided Government Office with a written report on how they have dealt with this case. The writer concludes that that Office is content that the procedures have been followed. It is not necessary in this judgment to set out the substance of the explanation given by NDC as to why the project did not receive funding. Detailed reasons are given.
11. The Applicant pursued his political remedies. On 13 November 2003 his Member of Parliament, Mr Field responded to Lord Rooker in the Office of the Deputy Prime Minister. In the letter Mr Field said that the Applicant had asked him to let Lord Rooker know that "the applicant did not agree that his project was appraised by NDC in line with recommended guidelines because the wrong application was presented to the Appraisal Panel and Board of NDC and they were denied the opportunity to see the computer programme itself on the screen of the computer".
12. The Applicant was not content. In 1^st March 2004 he commenced proceedings in the High Court. The Defence statement dated 15 March 2004 was signed by the Project Director. In summarising the effect of what is also stated in the Guidance Notes the Defence states that NDC

"is part of a discretionary central government grant regime known as … NDC. The overall objective of NDC is to tackle deprivation and social exclusion in the defined neighbourhood – in this case the neighbourhood of Bunhill and Clerkenwell known as EC1. As a 'discretionary' grant, it is possible that an application might meet all the funding criteria but not be approved because those charged with making the decision on approval consider that there may be more effective ways to deploy grant in order to secure the desired outcome of the programme and/limitation of available resources makes it impossible to give grants to all applicants (see attached guidelines provided to all applicants including the claimant)."

13. NDC made an application dated 27^th August 2004 to strike out the claim. On 21 October the applicant issued a notice of his intention to apply for an Order that the application by the Defendant be struck out as defective. The grounds were that the witness statement was not sent to him. He complainedthat as in particular English is not his first language this would cause him particular difficulties in participating in the hearing before the Master.
14. The hearing of both side's applications took place on 16^th November 2004. The transcript of the judgment of Master Fontaine is before me. The Defendants application was to strike out the claim under CPR3.4 (2) and Part 24.2 on the ground, in the first instance, that the statement of case discloses no reasonable grounds for bringing the claim, and, in the second, that it has no real prospect of success.
15. The Master dealt first with the procedural point. As a result of the Applicant's complaint about not receiving the witness statement the matter had been adjourned to 16 November 2004. The Master then turned to the substance of the matter.
16. The applicant, in his draft amended particulars claims compensation and damage in the sum of £85,000 for breach of duty, professional misconduct, gross negligence, misrepresentation, deception and fraud in the course of assessment and appraisal of his application entitled "Christmas Wish Website". This is a reference to the Amended Particulars of Claim dated 15^th November 2004. In that he refers to the letter of 3^rd March 2003. He states that it was the first version of the application which was presented. He says that the computer programme was not seen. He said that it appears from the Defence that the negative decision on his project was made before actual assessment of it. He complains of the insulting remark signed by 'R' on the letter to which I have referred. He refers to the advice he had received from Mr O'Connell which, he says, conflicts with Mrs Thompson's statement about initial assessment. He says that all this explains his surprise when he received the refusal letter which he refers to as unfair and discriminate. The form then follows with submissions on the law of negligence, misrepresentation and fraud. The alleged fraud is that the Defendant knew the project would not stand a chance and nevertheless wrote the letters inviting submission of the application, presenting the wrong form, the initial draft instead of the final application, and denying any wrong doing and lying to the members and the Chair as well as to the Job Centre, the London Government and others that everything was done right.
17. The Masters judgment refers to the extract from the Defence to which I have already referred. And she goes on:

"7. That seems to be the difficulty which is at the root of the claimant's claim. He has no claim in contract because there is no contract between the claimant and the defendant. He has attempted to base his claim on remedies in tort. The primary focus of those claims is in breach of duty and negligence, but I cannot agree that the defendant had a duty of care towards the claimant. Accordingly the tort of negligence does not arise.

8. In terms of applications for funding from a discretionary grant, it seems to me that the defendant had no obligation other than to act in a manner which on an objective basis is reasonable. I have no evidence to suggest that they did not act in a reasonable way. In any event, that is not the claim before me. Any claim on that basis would be in a different form.

9. The claimant has relied upon the letter which was sent to him by the defendant after consideration of his project by the Appraisal Panel that letter is dated 20 June 2003. It gives four reasons why the recommendation of the Appraisal Panel was not to approve the project… [She then sets these out] it is alleged by the claimant that in terms of two of those reasons, namely, the balance of the project costs and the clarification on management starting levels and recruitment, the application in its final form made this clear.

10. In terms of the balance of the project costs the figure that is stated in the letter at £341,750 is different from the balance in the final application of the balance of funding, which is £144,000. But in any event, even at that lesser figure, it is clear to me from the application notice that there was no clear indication as to how that additional cost was to be funded. It has been stated that there would be two sources of that additional funding: First, a charitable foundation called "Good Neighbour", which the claimant has told me he has not yet registered as a charity. It is his own project and he would have to start a fund raising program in order to raise those funds. Secondly, the company Argos (I am told, although I have not seen any written evidence) were written to for funds and said they might be interested once the project is established. It is clear from that evidence, which I accept, that there was no immediate funding or promise of funding from that body.

11. With regard to the second reason for rejecting the project which the claimant alleges is wrong, namely the management staffing levels and recruitment process, details are given of what staffing is proposed in the final application and I am told that details of the individuals were in the defendants files. I cannot therefore reach a conclusion as to whether the defendant decision in relation to that was reasonable. But as I have stated, that is not my function because I have concluded that the defendant can owe no duty of care towards the claimant. Its decisions were entirely discretionary. Even if it had decided that the project met with its requirement, there was no guarantee or duty upon it to provide funding for the project.

12. Allegations of professional misconduct fall within the claim of negligence which, for the reasons I have given, cannot succeed. There is no evidence, or particulars only a bare assertion of the claim for misrepresentation. I have seen no evidence of the alleged deception or fraud sufficient to file any claim against this defendant.

13. In terms of the loss sought, the claimant asserts that he was left unemployed by virtue of the decision of the defendant. However, as has been submitted by counsel on behalf of the defendant, its obligations were to provide funding for projects to assist in tackling deprivation and social exclusion in the local area. Its duties were not to provide employment for the claimant.

14. Accordingly, I have concluded that this claim has no real prospect of success under CPR 24.2 and that the statement of case discloses no reasonable grounds for bringing the claim under CPR 3.4 (2) (a). Accordingly, I strike out the claim and enter judgment for the defendant".

18. By Appellants notice dated 25^th November 2004 the Applicant applies for permission to appeal against that Order.
19. The grounds of appeal are set out. The applicant complains of breach of the CPR, of lack of impartiality on the part of the Master and that he provided evidence. His submits that he has provided proof of the six matters he relies on, namely breach of professional duty, breach of care, professional misconduct, gross misrepresentation, gross negligence and gross deceptions. He smites at the judgment of the Master who fails to address them.
20. A point that is essential to consideration of this claim was that it is for NDC to decide on the making of the grant. It is not for this Court, neither for the Master nor for me. It is for that reason that it would be pointless for me to see the applicant's work, which he wanted me to view. All that the court can do is to consider whether there is an arguable case that the claim against NDC has a real prospect of success.
21. For the hearing before me he submitted a detailed Skeleton Argument. He sets out the matters which I have already recited. He complains very bitterly of a mix up in the High Court Central Office relating to the Defence. Turning to the judgment he complains in detail of the failure, as submits, to address the issues.
22. I have given careful consideration to the whole of this and to all the other documents and to the submissions made in argument orally to me. It is unfortunate for the applicant that he is not a lawyer and does not have the benefit of legal advice. When in her judgment at paragraph 9 the Master referred to the duties of the Defendant and the possibility of a claim being in a different form, she was of course referring to a claim for judicial review. Whether or not the applicant could ever have obtained permission to apply for judicial review is not a question that was raised before the Master. But a claim for judicial review would not have been a claim for compensation for the time, which the applicant says that he has wasted on this project. It would have resulted, at best for the applicant, in the quashing of the decision and the taking of a new decision. The time limit for filing the appropriate claim form is not later than three months after the grounds to make the claim first arose, therefore, in this case late September 2003.
23. There can be no doubt that on the claim which the Master was in fact addressing, the outcome was inevitable and she was right for the reasons that she gave. The Defendant is a public body distributing grants on a discretionary basis. Applicants are free to apply or not as they choose, but they are not entitled to compensation for their time if their applications are unsuccessful.
24. None of the common law causes of action to which the Applicant refers are sustainable against the defendant on facts such as those in this case. The defendant does of course have a public law duty to act fairly and lawfully, but it is not a duty which gives rise to a claim for compensation for loss of time or earnings such as the applicant advances in this case. However much encouragement he received, and I accept that he did receive encouragement, there was no obligation on the part of the defendant to make the grant he sought.
25. It is regrettable in this case that there are grounds which make it understandable why the applicant should have the sense of unfairness which he does have. One is the derogatory remark written on the letter to which I have already referred. Another is that the wrong application form was submitted for consideration. But, as I have said, these are not matters which give rise to claims for compensation.
26. Even if the court were to have entertained a claim for damages on an application for judicial review, any prospects for a project such as the Applicant's are inevitably so uncertain that there would be no realistic expectation that he ever would be awarded compensation of the order that he claims.
27. In CPR Part 52.3 (6) it is provided that "permission to appeal will only be given where (a) the court considers the appeal would have a real prospect of success; or (b) there is some other compelling reason why the appeal should be heard".
28. For the reasons I have given the Master's judgment was correct for the reasons that she states. And the reasons she gave are equally applicable to all the six bases on which the Applicant advances his claims on. The procedural muddle in the High Court is another reason why it is understandable that the Applicant should have a sense of grievance. But the purpose of the CPR is that claims that are good in law should succeed and claims which are unsustainable in law should not succeed. In insisting on going to the merits of the matter, the Master was not showing bias, but performing her duty. This application does not fall within the criteria specified in the rules. Permission to appeal is therefore refused.