Derek Crilly v T. & J. Farrington Ltd and Others

JurisdictionIreland
JudgeMr. Justice Geoghegan
Judgment Date21 December 1999
Neutral Citation[1999] JILL-HC 122103
CourtHigh Court
Docket NumberRecord No. 7308p/No. 1990
Date21 December 1999
Derek Crilly v T. & J. Farrington Ltd & Ors.
IN THE MATTER OF AN ACTION BETWEEN
DEREK CRILLY
PLAINTIFF

AND

T. & J. FARRINGTON LIMITED AND JOHN O'CONNOR
DEFENDANTS
AND IN THE MATTER OF AN ISSUE DIRECTED TO BE TRIED BETWEEN
THE EASTERN HEALTH BOARD
CLAIMANT

AND

DEREK CRILLY
FIRST NAMED RESPONDENT

AND

F.B.D. INSURANCE PLC.
SECOND NAMED RESPONDENT

[1999] JILL-HC 122103

Record No. 7308p/No. 1990

THE HIGH COURT

Abstract:

Administrative law - Personal injuries - Hospital charges - Negligence - Statutory interpretation - Statutory provision for charges to be levied by health boards in relation to persons injured in road traffic accidents - System of charging - Previous enactment provided for standard charge in relation to such services - ‘Kinlen Order’ - Plaintiff injured in road traffic accident - Whether hospital charges payable at standard rate or on quantum meruit basis - Whether statements of Minister in Dáil relevant to interpretation of statute - Health (Amendment) 1986, Act (No 10) - Health Act, 1970 (No 1).

The assessment of hospital charges under Section 2 of the Health (Amendment) 1986, Act is properly made on a quantum meruit basis rather than by reference to the standard maintenance charges provided for by the Health Act, 1970 (in respect of hospital services provided by health boards to persons who are not eligible to avail of them free of charge), or by reference to an averaging of costs of hospital beds. So held by the High Court in refusing the application of the Health Board.

note- judgment has been appealed and is reported in full. The appeal was allowed.

Mr. Justice Geoghegan
1

This is the trial of an issue which arose in unusual procedural circumstances which I will endeavour to explain in the course of the judgment. Essentially what is at issue is the interpretation and implementation of Section 2, Sub-section (1), of the Health (Amendment) Act,1986. To use language which will be familiar to personal injury practitioners, the correctness of "the Kinlen Order" is being challenged. The sub-section reads as follows:-

"Where -"

2

(a) injury is caused to a person by the negligent use of a mechanically propelled vehicle in a public place, and

3

(b) in-patient services or out-patient services have been, are being or will be provided by or on behalf of a health board in respect of the injury, and

4

(c) any one of the following, that is to say, the person aforesaid, his personal representative or dependant, has received, or is entitled to receive damages or compensation in respect of the negligent use aforesaid from the person liable to pay such damages or compensation in respect of that injury, or any loss, damage or expense (or mental distress in the case of a dependant) arising therefrom,

5

the health board shall, notwithstanding anything in the Health Acts,1947-1985, make a charge upon the person who received or is entitled to receive such damages or compensation in respect of the said in-patient services or out-patient services."

6

Under Section 52 of the Health Act,1970, a health board must make available in-patient services "for persons with full eligibility and persons with limited eligibility". Under Section 53 of the same Act as originally enacted charges could not be made for in-patient services made available under Section 52 subject to certain exceptions which were to be specified in a ministerial regulation which itself would have to specify the amount of any charge. Section 55 of the said Act went on to provide that a health board might make available in-patient services for persons who did not establish entitlement to the services under Section 52 and to those who did establish such entitlement but availed of private or semi-private accommodation and in such event the board was to charge for any such services "charges approved of or directed by the Minister". Traditionally, the charge so directed by the Minister has been somewhat inaccurately described as a "maintenance charge" and has been well below anything that could be described as an economic charge. The current charge is £158 per day. The point of interpretation of Section 2(1) of the 1986 Act is whether, having regard to the fact that the Health Acts are to be construed together as one Act, the reference to "make a charge" should be construed as meaning a charge of the amount which is directed from time to time by the Minister under Section 55 of the Health Act, 1970 or whether the sub-section should be regarded as being free-standing in which case the charge would have to be a reasonable charge or in other words a charge fixed on a quantum meruit basis.

7

If the former is correct there is no further problem. If, however, the latter is correct a further problem does arise, namely, what is the proper method of determining a so-called reasonable charge. More precisely, the actual issue in the case is whether the calculation of the charge by the division of the annual costs of a particular hospital by the number of occupied hospital bed days in that hospital during the same year is reasonable and intra vires the 1986 Act. That is the basis contended for by the Eastern Health Board. F.B.D. Insurance Plc. on the other hand argue in the first instance that what is intended is a Section 55 charge but that if it is wrong in that argument the services must at least be charged for on the basis of the actual service rendered to the particular plaintiff. If the health board's contention is correct, the Beaumont Hospital charge would now be about £525 a day.

8

Having outlined what the case is all about I think it desirable briefly to explain its procedural history. Derek Crilly was a Plaintiff who was very seriously injured. He underwent treatment in Our Lady of Lourdes Hospital, Drogheda and Beaumont Hospital, Dublin. As his injuries resulted from a motor accident, the 1986 Act came into play. The most expensive part of his treatment was in Beaumont Hospital where he was under, in particular, neurosurgeons and urologists. The Eastern Health Board claimed a charge calculated on the average daily cost of running the hospital as explained above. The action was tried by Mrs. Justice Denham, then a Judge of the High Court, and she delivered a reserved judgment on 26th August, 1992 awarding the Plaintiff £1,667,078.20. When dealing with hospital charges she said the following:-

"It seems unreasonable to the defendants that they should bear the cost of a special road traffic accident rate in hospital over and above the ordinary rate. Consequently, I am including in this judgment a figure which represents the cost for a private patient in Beaumont but not the additional loading because the plaintiff was a road traffic accident victim. This figure is not final. In relation to Our Lady's Hospital, Drogheda where the plaintiff was in a general ward I have set payment on the basis of £99 per day, i.e., semi-private. I grant the hospital liberty to apply to explain why they consider it fair to charge this extra rate for road traffic accident victims to the defence. The evidence I heard from the hospital merely established that there was this rate over and above the private rate or semi-private rate and its method of costing is set out."

9

Following on the judgment it was decided to take up the invitation of the Judge and after various procedural manoeuvres, to which it is not necessary to refer, it was ultimately decided that there be an issue between the Eastern Health Board and the insurer, F.B.D. Insurance Plc. in relation to the Beaumont Hospital bill. The insurers, however, ultimately decided to pay the bill and then pleaded in the issue that the issue could no longer proceed because it was now a moot. Since then, F.B.D. has abandoned that defence and is in agreement with the Eastern Health Board that it is desirable that the issue be tried.

10

When the case was opened to me and before I was aware that the "moot" point had been raised in any pleading, I myself expressed concern about the matter. I had regarded it as a well established principle that litigation should only be conducted in relation to a genuine claim still outstanding and not for the purpose of having some legal principle decided. However, it was strongly urged on me by both sides that although the money had been paid there was still Declaratory relief sought in the Statement of Claim and that that Declaratory relief related to a very real issue which arose every day of the week as between the Eastern Health Board and F.B.D. A great deal of time, energy and expense had been applied in getting the issue to a hearing and in those circumstances I acceded to the request of both parties that the issue should proceed accordingly.

11

It would appear that the first question which has to be decided is whether the charge under Section 2 of the Health (Amendment) Act,1986 should be the Section 55 charge under the 1970 Act. To some extent this matter has been carefully considered by Kinlen J. in Rourke -v- Scott, in an unreported judgment of 25th November, 1993. The case had been a personal injury action in the Galway List which had settled on every matter except the health board charges. The charges had been calculated on the basis contended for by the Eastern Health Board in this case resulting in what seemed to Kinlen J, to be a very high figure. With the consent of all the parties the Judge joined the health board, in that case the Western Health Board, as a co-plaintiff so that the health board could be properly represented. The claim was for £58,493. The plaintiff was a very small farmer with a net income of just over £3,000 per annum. The claim was broken down as to charges for Merlyn Park Hospital of £27,111 and for University College Hospital of £31,382. The plaintiff had been in hospital for 329 days. Kinlen J. pointed out in his judgment that:-

"the Act could have stated clearly and distinctly what the...

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