Moore & Ors, R (on the application of) v Care Standards Tribunal & Anor

MR JUSTICE MITTING: The claimants are all long-term residents of premises in and around Merseyside which were, on 1 April 2002, registered care homes. Each of them has a mental disorder which requires them to receive nursing and personal care. The person registered to carry on the care home was Alternative Futures Limited, a not-for-profit company limited by guarantee and a registered charity.

In March 2001, Alternative Housing Limited was registered as a not-for-profit company and as a charity. The intention was to divide the ownership of registered care homes from the provision of services, with a view to changing the means by which residents were accommodated and services provided to them.

Alternative Futures applied to the National Care Standards Commission to cancel its registration under section 11 of the Care Standards Act 2000, under section 15(1)(b) of that Act. The National Care Standards Commission refused to do so in October 2002. Alternative Futures appealed to the statutory tribunal established to hear appeals, the Care Standards Tribunal, which conducted the hearing of an appeal over 11 days in March and June 2003. It dismissed the appeal.

The claimants took no part in the appeal. There is no provision in the Care Standards Act or Regulations made under it for them to do so. Each claims to be adversely affected by the Tribunal's decision and seeks judicial review of it.

The propriety of their claim and their sufficiency of interest was challenged at the permission stage and remains open now. The challenge has not been pressed. The Commission for Social Care Inspection (the replacement body for the National Care Standards Commission) has not urged me to refuse to hear the application because it, like the claimants, seeks clarification of the law relating to de-registration. The Department of Health has made written submissions to me that judicial review is not the appropriate procedure to determine these questions. Mr de Bono has explained to me that the financial regime under which each claimant would be supported if the claim succeeds may be more favourable to him than that applicable to residents of registered care homes. I am content, for present purposes, to accept that assurance without deciding that it is so and that, in consequence, the claimants do have sufficient interest in the decision of the Tribunal to support a claim for judicial review; so that it is proper for them to bring and for me to hear this claim. I do so notwithstanding the fact that Alternative Futures have a clear statutory right of appeal against the Tribunal's finding, which it has chosen not to exercise.

The relevant statutory provisions are in the Care Standards Act 2000 and the Care Home Regulations 2001. They require to be extensively set out so that the statutory background can be properly understood. The provisions in the Act are as follows:

There then follows extensive and detailed provisions for Regulations which may be made. For present purposes it is only necessary to cite some of them.

The Care Homes Regulations 2001 provide, relevantly:

Regulations 7 and 8 provide that registered providers and managers must be fit persons:

Regulation 13 contains detailed Regulations concerning the health and provision for treatment of service users, including, for example, the need to make arrangements for service users to be registered with a general practitioner, and the need to prevent them from being harmed or from suffering abuse or being placed at risk of harm or abuse.

The remainder of the Regulation goes on to make other provision for, amongst other things, consultation with service users about social interests and the organising of communal activities. Regulations 17 to 21 contained provision for record keeping and staff. Regulation 22 requires procedure to be established for entertaining complaints:

Part V makes provision, including financial provision, for the management of care homes. Regulation 43 provides for offences for breach of many of the Regulations.

In late 2001 and early 2002, Alternative Homes, to which the freehold of the care homes had been transferred by Alternative Futures, granted assured tenancies to residents on standard terms, save as to the amount of rent and service charge. I have taken the agreement between Alternative Homes and Theresa Hyland as typical, because the Care Services Tribunal visited the home in which she resided, 77 Lang Lane South, West Kirby, Wirral, and I take her agreement as typical of all.

Again, extensive reference is required to the detailed terms of the tenancy agreement. It provides that the agreement is between Alternative Housing and Theresa Hyland and that she is to have the full responsibilities and rights set out in the agreement -

The agreement provided that it was to begin on 21 December 2001 and was an assured weekly tenancy. By clause 1, the tenant agreed to pay a net rent from the date of the agreement until 31 March of £794.57 per week. The net rent was broken down into a service charge of £507.21 and rent of £287.36. Clause 1.5(a) provided that:

The schedule which I take to be the schedule at the back of the agreement contains provision for "Eligible Rent (Resource Accounting basis calculation)" of £135.33; for depreciation for furniture and white goods of £19.23; for various other lesser charges and a subtotal for "Core Rent elements" of £209.20. Under the heading "Supporting People elements", the schedule makes provision for cleaning of "own areas", ie the bedroom, of £5.12 and "communal areas" of £26.40. "General counselling and support" is charged at £408.56. The total for the "Supporting People elements" is £442.08. There is, in addition, a management fee of £65.13 and provision for "Voids Allowance" and "Bad Debts Allowance" of £47.71 and £23.93, respectively. The total of "ELIGIBLE CHARGES" is £788.05, and the total under the column headed "TENANT PAYS" is £6.52, making a total of £794.57.

The tenancy agreements were mainly signed by relatives or advocates of the residents, purportedly on their behalf. The consent of the Court of Protection was not sought, notwithstanding the substantial financial burden imposed on the tenants by the agreements. It is common ground that the tenants' obligations could not be enforced by Alternative Homes against them, though to the extent that it conferred benefits and rights upon them, could be enforced against Alternative Homes.

There was an issue before the Care Services Tribunal as to whether the agreements had effectively been made at all by the residents. I am content to assume for present purposes that the agreements were made with the claimants who bring these proceedings, and were enforceable to the limited extent described. Had it been necessary to decide this issue, I would have remitted it to the Tribunal to decide.

The tenancy agreement is unusual in two respects. First, it appears to provide for a level of rent and service charge that appears to me, albeit without my view being informed by evidence, to be well in excess of the market rent for simple occupation of a furnished bedroom with the use of communal facilities in a building in Merseyside. Second, it includes provisions, for example those for "general counselling and support" and "voids and bad debt allowances" that have no echo in an ordinary residential lease. The terms are only explicable if, as is undisputed, Alternative Homes were to provide care and nursing services in addition to the right to occupy the bedroom and communal facilities.

It is to be noted that the agreement provides both for the letting of the bedroom and the use of communal areas, by Alternative Homes, and for the provision of services by Alternative Homes. All of the elements of accommodation and nursing care, therefore, originate from facilities provided by the same company.

I am told that some 20 issues were canvassed before the Tribunal. Only some of them have been canvassed before me and do I not propose to deal in detail with those that were not. The first issue canvassed before the Tribunal and before me is upon whom the burden of proof lies in applications to cancel registration. Alternative Futures argued that the burden of proof was on the Commission to prove that the home was still a care home. The Tribunal accepted that the Commission must explain why it considered that registration should be cancelled, and that the burden, therefore, lay upon it to do so. In my view, the burden of proof plays no part in decision-making, whether by the Commission or by the Tribunal.

At the stage at which the Commission makes its decision, it must make a decision based on its judgment of the facts. The Tribunal hears an appeal by way of re-hearing and is in the same position as the Commission at the decision-making stage. It too must make a judgment on the facts which it finds. It must simply decide, like the Commission, whether the registration of a person carrying on or managing a care home should be cancelled. In so doing, it is trite that it must apply the law to the facts which it finds. But the burden of proof will play no part in that exercise, save in the wholly unlikely case that neither party appears or puts in evidence at the appeal hearing. In the case of an appeal against refusal to cancel registration, and in such an event, the Tribunal will have, in my view, no choice but to dismiss the appeal because the grounds for cancellation will not have been advanced, let alone made out.

Secondly, the human rights of residents were argued and found by the Tribunal not to be infringed by reason of the refusal of the Commission to cancel registration. It is unnecessary for me to make any comment on that issue.

Thirdly, the capacity of residents to enter into tenancy agreements and the fact of their doing so and related issues were argued. No comments are required in the light of the working assumption, to which I have already referred, save two. First, the Tribunal did not make any express finding on the validity of tenancy agreements. Second, it did place great emphasis on the absence of real choice on the part of residents, and gave as its principal reason for rejecting the appeal, the absence of such choice. This part of its reasoning is challenged by Mr de Bono, for the claimants, and I will return briefly to it later.

Fourthly, the Tribunal found that there had been no change in substance in the way in which the homes were run. In particular, in paragraphs 83, 84 and 85 of its decision, it noted:

Mr Murray, the finance manager, is recorded as having "agreed that a request for a change of care provider would have to go through the statutory agencies, but that Alternative Housing has overall control of the care delivery at the home". I observe that that accords with the picture given by the detailed terms of the tenancy agreements.

The Tribunal went on to note that privacy had been enhanced and that people were more conscious of an individual's private space. The Tribunal also noted that privacy locks had been provided for residents, but accepted that this was common practice in care homes up and down the country.

These findings of fact are significant and unchallengeable. They demonstrate that, in practice, the care homes in which these claimants resided were managed in a virtually identical way before and after the granting of the assured tenancies.

I now turn to the arguments of principle advanced by Mr de Bono. He submits that the existence of the assured tenancies is inconsistent with the continued registration of Alternative Futures or Alternative Homes as persons carrying on a residential care home, so that the Commission and the Tribunal were bound to cancel the registration under section 15. The answer to that question is primarily one of statutory construction and turns upon the words of section 3 of the 2000 Act. I repeat them:

The first word which requires to be construed is "establishment". In the present context, a working definition which I put to Mr de Bono and Mr McCarthy QC was accepted by them as acceptable, if not exhaustive. It is "a place, including a building, in which organised activities are conducted", and "the conduct of organised activities in a place, including a building".

The "establishment" or "it" must provide accommodation together with "nursing or personal care". As far as accommodation is concerned, it is provided by a room and facilities within a building which the owner permits the resident to occupy and make use of. As far as nursing or personal care is concerned, they have to be provided by a person or persons. Accommodation and care must be provided "together", but they need not be provided by the same company or individual. Although "person" is referred to in the singular in section 11(1), the Interpretation Act permits that singular to include the plural. Thus, as the Tribunal held, there was nothing to prevent an establishment from being carried on by two companies, Alternative Housing and Alternative Futures together. Both could carry it on, and if they did so, both required to be registered. In fact, as the facts found by the Tribunal and the terms of the tenancy agreements show, both accommodation and services were to be provided, and were provided, by Alternative Housing.

Does the fact that the accommodation element as provided by means of an assured tenancy mean that the establishment ceases to be a care home within section 3? The answer is: not in principle. Nothing in the Act or the Regulations excludes expressly or by necessary implication the provision of accommodation by that means; and accommodation is still provided by the "establishment" as defined. A detailed examination of the terms of the tenancy agreements reveals nothing that conflicts with the obligations of the service provider in the Regulations.

Mr de Bono suggested that there was a conflict, and chose as his example, Regulation 16(2)(d), which provides:

Nothing in the tenancy agreement prevents any resident from doing just that, although in practice the schedule which includes provision for depreciation of furniture and white goods suggests that they are, in fact, provided by Alternative Homes. Given that on that analysis of section 3, and the Tribunal's findings, the claimants continued to be accommodated and to receive care in an establishment within section 3, were the Commission right to refuse to cancel the registrations, and the Tribunal to dismiss Alternative Futures' appeal? Subject to a possible argument that Alternative Homes should have been substituted, the answer is clearly: yes. It is unnecessary for me to say more about the circumstances in which the Commission may refuse to cancel registration under section 15(1(b) than to state that it may not do so where the conditions in section 3 are fulfilled, for to do otherwise would be to permit or to condone the commission by the person carrying on the establishment of a criminal offence. The Tribunal were, therefore, right to reject the appeal. It was, in my view, unnecessary for it to go on to consider, let alone to hold to be decisive, the absence of choice by residents when entering into the new arrangements; but that aspect of its decision, although it occupied many paragraphs of reasoning, and it seems much of the time of the hearing, does not vitiate the conclusion which inevitably stems from its other findings.

In my view, for the reasons which I have given, this application for judicial review must fail on the ground that the Tribunal reached the right conclusion and was bound to reach only that conclusion by the law as I have explained it.

MR MCCARTHY: Would you make an order for costs, not to be enforced without leave?

MR JUSTICE MITTING: Is that the usual order now in legally aided cases or in publicly funded cases?

MR MCCARTHY: I believe so.

MR DE BONO: My Lord, I would ask you to make an order that there be no order for costs on the basis that the Tribunal's decision was one which raised legitimate concerns on a matter of public importance, and it was right to seek clarification of the law. Now, the clarification that has been given is not the clarification that had been sought, but nevertheless, in the light of the Tribunal's decision and the way it was worded, it is appropriate to bring this challenge.

MR JUSTICE MITTING: Thank you. This is in fact an entirely theoretical application, is it not? It is utterly inconceivable that any order for costs would be enforceable.

MR MCCARTHY: That is right, my Lord.

MR JUSTICE MITTING: Is it really worth pursuing?

MR MCCARTHY: I have instructions to make this application. The person with me does not have specific authority to vary and if your Lordship is not impressed by the application then I have nothing more to say about it.

MR JUSTICE MITTING: I would hope that the application would not be pursued and so what I intend to do is to make a conditional order. You are strictly entitled to the order that you seek, but I will not make it for 7 days, in the hope and expectation that the court will be notified before the expiry of 7 days that no order is sought. In that event, there will be no order.

MR MCCARTHY: I will make sure that is sorted out, my Lord.

MR DE BONO: My Lord, may I have permission to appeal?

MR JUSTICE MITTING: On what ground?

MR DE BONO: On the ground that this is a point of law -- the correct interpretation of section 3. It is a matter which affects a large number of people and there is some prospect that the Court of Appeal might come to a different conclusion.

MR JUSTICE MITTING: I accept that it is a matter of law and may well be of some importance not only to these claimants but to other service providers and residents of care homes. However, I do not believe that there is any real prospect of success in such an appeal and I prefer to leave it to the Court of Appeal to decide whether or not it is an appeal that should be entertained on the second ground, namely a matter of wider importance that ought to be ventilated.

MR MCCARTHY: My Lord, before you leave may I say on behalf of both of us that we are very sorry about the way this case approached. There were a series of, I suspect, misunderstandings as to what was really going on. I realised yesterday, I think, that your Lordship had been presented with a proposed consent order on Wednesday, which is not a course of conduct that I think anyone is pleased to see. I am very sorry, my Lord, because I know it causes great inconvenience. Both Mr de Bono and I would absolutely have complied with the Practice Direction on the skeleton arguments and I do appreciate the lack of that would have caused your Lordship extra work. I do apologise.

MR JUSTICE MITTING: I accept an apology which is in fact not called for on your part. I understand from what I read that the office indicated a willingness to entertain an application to adjourn that I personally did not share. When I read into the papers it became clear to me that there was a matter of principle that could be decided in a quite straightforward way and that it would be pointless to adjourn it for a further hearing and further enquiries and consequent expense.

MR MCCARTHY: My Lord, you have heard no one complain about that today.

MR JUSTICE MITTING: Thank you both for an interesting argument.