The Supreme Court heard oral submissions in the case of Davies & Anor t/a ‘All Stars Nursery’ v The Scottish Commission for the Regulation of Care last month. The case raises technical issues of statutory interpretation, the resolution of which will affect the regulation of, among other institutions, children’s nurseries in Scotland.

The appellants operate a children’s nursery which, as required by statute, was registered with the Scottish Commission for the Regulation of Care. In 2008 and then again in 2009, the Commission advised the appellants that a decision had been made to cancel the registration of the nursery, meaning that the nursery would no longer be able to lawfully operate. This Commission’s decision was appealed to the Sheriff Court and during the course of these proceedings the Sheriff made a ruling on the admissibility of certain evidence. The appellants disagreed with the Sheriff on this point of evidence and appealed that decision to the Sheriff Principal.On April 1 2011, between the appeal being raised by the appellants and being heard by the Sheriff Principal, the Public Services Reform (Scotland) Act 2010 (henceforth ‘the 2010 Act’) established two bodies, including Social Care and Social Work Improvement Scotland (‘SCSWIS’), to replace the Commission and take over its regulatory activities. In particular, the Commission’s role in the regulation of children’s nurseries was transferred to SCWIS.

When their appeal on the aforementioned evidential issue came before the Sheriff Principal, the appellants claimed that the Commission no longer existed and could not be represented in court and, moreover, that SCSWIS had no title or interest to enter the proceedings. The Sheriff Principal agreed with the nursery owners and held that the Commission’s earlier decision to de-register their nursery was a nullity. The Commission appealed to the Inner House of the Court of Session 

The Court of Session’s Judgment: The majority opinion

Lord Drummond Young wrote the leading opinion for the majority. His Lordship noted that transitional provisions had been made by the Scottish Government in relation to the institutional reform that the 2010 Act enacted. Of particular relevance in this case was the Public Services Reform (Scotland) Act 2010 (Health and Social Care) Savings and Transitional Provisions (No. 2) Order 2011 (henceforth ‘the statutory instrument’).

Lord Drummond Young further noted that Article 2 of the statutory instrument mandated that Part 1 of the Act which previously governed this area of regulation should continue to apply for the purposes of appeals like the one in question. Part 1 of this Act included the provision which constituted the Commission as a body corporate. Accordingly, his Lordship held that for the purposes of appeals like the one in question the Commission continued to exist as the previous legislation, including the provision which gave the Commission its existence, continued to apply to such proceedings. Moreover, Lord Drummond Young noted that a provision made in another transitional order which transferred all of the Commission’s regulatory responsibilities to the SCSWIS was explicitly disapplied by art 2 of the statutory instrument.

His Lordship also forcefully dealt with the Sheriff Principal’s suggestion that such a statutory scheme (i.e. keeping the Commission in existence for the limited purpose of concluding appeals) was ‘impossible’:

“In my opinion the continuation of the existence of a body corporate for limited purposes only is unquestionably possible. A body corporate is a creation of the law, and the law can determine whether its existence is to be recognized for all purposes or only for certain defined purposes…there is nothing impossible or irrational or even unreasonable in providing that a body corporate should exist for limited purposes, provided that these are adequately specified.”

“In such a case it is not strictly correct to say that the body corporate both exists and does not exist; the body corporate exists, but the ambit and relevance of that existence are limited. Thus for any other purpose it is possible to treat the body corporate as if it did not exist. Under article 2 of the [statutory instrument] the Commission is maintained in existence for the purpose of the registration of any care service that is the subject of appeal proceedings, and obviously for the purpose of those proceedings themselves, but not otherwise. That result is entirely rational.”     

Lord Drummond Young also noted that the provisions in the 2010 Act which abolish the Commission, and repeal its previous statutory base, are subject to transitional provisions like those enacted in the statutory instrument.

His Lordship also examined s 102 of the 2010 Act which provides that, with effect from the date when SCSWIS came into existence, any person employed by the Commission was transferred into the employment of SCSWIS, and all property, rights and liabilities of the Commission were transferred to and vested in SCSWIS. The appellants had argued that this meant that the Commission could neither pay for the on-going proceedings (no property) nor instruct solicitors to pursue the proceedings or authorise SCSWIS to act as its agent for the purpose of giving such instructions (no employees). The appellants raised these as both practical issues and evidence that it was intended for the Commission to have any continued existence whatsoever.

Lord Drummond Young disagreed with this argument. Given the, in his Lordship’s opinion, statutory intent that the Commission should continue for the purposes of appeals “it is obvious that means must be supplied to enable the Commission to perform its remaining functions; those means consist both of personnel and of financial resources.” Lord Drummond Young went onto state that the ‘means’ in this case was a relationship of implied agency between the Commission and the SCSWIS that is evident from the statutory scheme created to regulate the transition between the two bodies.

Given the above reasons Lord Drummond Young allowed the Commission’s appeal and recalled the Sheriff Principal’s order. The Commission would have been allowed to continue with the substance of their action against the appellants.

The Court of Session Judgment: Lord Marnoch’s dissent

Lord Marnoch dissented, taking a different approach from the one approved by Lord Drummond Young and the Lord President.

His Lordship stated that he felt the majority’s approach strayed into implying provisions of material character into the statutory instrument.

Moreover, in Lord Marnoch’s opinion, the majority’s interpretation of the statutory instrument was directly contradictory to various provisions of the 2010 Act which abolished the Commission. His Lordship put weight on the fact that Article 2(1) of the statutory instrument contained no acknowledgement of, and resultantly no derogation from, any of the provisions with which it is apparently at odds.

On the key point that the reference to Part 1 of the 2001 Act encapsulated the provision which constituted the Commission, Lord Marnoch stated:

“I am wholly unconvinced that the reference to Part I of the 2001 Act remaining in force was intended actually to resurrect the Commission any more than it was intended actually to restore to the resurrected Commission …all the functions covered by Part I which under the 2010 Act and the transitional provisions are expressly transferred to the Inspectorate. Rather do I think that, as matter of construction, these Articles…are intended to ensure that only …the former substantive law is applied in the course of the inspections or proceedings in question.”

Lord Marnoch therefore held that the Commission no longer existed and, as such, dismissed the appeal.

 As an aside, in terms of the proper legal construction of the statutory instrument, his Lordship also concluded that “what was intended was that the Inspectorate, having replaced the Commission, should take over the conduct of the present and similar ongoing proceedings as from 1 April 2011.”  Accordingly, it is arguable that under Lord Marnoch’s reasoning the SCSWIS could take the place of the Commission and that accordingly the Commission’s previous decision to de-register the nursery may not be a nullity in any case.


In their judgments the Supreme Court justices sitting on this case will, in essence, need to decide whether the transitional statutory scheme should be properly interpreted to allow for the continued existence of the Commission for the purposes of this case.

It is unfortunate that such a technical issue has expended so much public money and court time. This is especially so when careful statutory drafting may have prevented this issue in the first place. As Lord Marnoch noted in his dissenting judgment, “one must certainly hope that both the Scottish Legislature and those who advise it will take on board the extent of litigation which has resulted from them; and the desirability of avoiding similar uncertainties in the future.”