GOLDEN YEARS (1979) LIMITED and MRS MAUREEN ANN GEORGE Appellants
and
LIVERPOOL CITY COUNCIL Respondent
Decision of the Tribunal sitting at the Education Offices, 14 Sir Thomas Street, Liverpool, on 5, 6, 7 and 8 September 1989.
Before: G F Harwood - Chairman
G S Dunn
M P J Burrell
Appeal against a decision of the Respondent under section 9(a) of the Act to refuse registration of the Appellants in respect of a proposed residential care home at 23 Aigburth Drive, Sefton Park, Liverpool 17.
For the Appellants: Mr A R Ostrin of Yaffe, Jackson & Ostrin (Solicitors), 81 Dale Street, Liverpool L2 2HZ
For the Respondent: Mr G Bellis (of Counsel) instructed by Miss T Fuller on behalf of Liverpool City Council
DECISION
It is the unanimous decision of the Tribunal that the appeal be dismissed and that the decision of the Respondent be confirmed.
REASONS
Preliminary
Both Appellants made application on 16 May 1998 for registration in respect of a new residential care home. Golden Years (1979) Ltd at that time comprised Mrs George as chairman and secretary, Mr Henry Miller and Mrs Anne Miller as directors. All three persons submitted suitable references. Mrs George applied also to be registered as the manager/officer-in-charge, and submitted satisfactory information regarding her past experience. For the purposes of the application she disclosed that her husband had previously been made bankrupt in respect of a hotel business and confirmed that he would have no involvement in the running of the home. The premises at 23 Aigburth Road had been acquired by the company from Mrs George's husband. The necessary enquiries concerning all three persons were duly made and satisfactory answers were received. The premises underwent the customary inspections by various officials and were evidently found to be satisfactory. Based on all the information the available, on 23 September 1988, in a report prepared for the assistance of the Residential and Community Services Sub-Committee, the Director of Social Services recommended registration in respect of both the Appellants.
The Sub-Committee met on 14 October to consider the applications. The City Solicitor "reported orally that the Official Receiver was involved in the land transaction in respect of 23 Aigburth Drive". The Sub-Committee, not surprisingly, resolved "that consideration of this matter be deferred pending further information and investigation arising from the Official Receiver's handling of Mrs M A George's husband's financial affairs". The `investigation' was carried out and revealed matters of fairly recent business history which we consider certainly would have been fatal had a similar application been made by Mr George for registration. However, he was and is neither an applicant nor an officer or shareholder of the appellant company - nevertheless a degree of suspicion as to their intentions fell not only upon Mr George but also his wife, raising doubts as to her fitness and that of the appellant company to be concerned in carrying on a residential care home.
The Sub-Committee met on 17 March 1989 to consider a proposal to refuse the applications for registration. The reasons that were then given have since remained the same, and are reasons which persuaded the Sub-Committee by a narrow margin to adopt the proposal. On 19 May 1989, following the hearing of evidence and representations, a similarly constituted Sub-Committee by the same narrow margin decided to refuse registration. The reasons given have been explored in considerable depth in the appeal before this Tribunal and were as follows:-
Mr George, by virtue of his conviction, his business history and present bankruptcy, is not a person appropriate to be concerned in the carrying on of a residential care home.
The history of the title to and circumstances of 23 Aigburth Drive, the application for converting the same, together with the arrangements for financing the conversion works, individually and cumulatively indicate that Mr George has been and is likely to remain interested in and at least indirectly involved with the carrying on of 23 Abigburth Drive as a residential care home. The candour, consistency and co-operation coming from the applicants on the topics of the financing of the venture and their inter-relationship with Mr George are such as to lead the Registration Authority to the conclusion that neither individually nor collectively are the applicants fit persons to be concerned in the carrying on of a residential care home. With regard to Mrs George, the Registration Authority noted and was further influenced (including when examining and assessing her capacity to manage) by the part she must have played in acquiring and running the Salutation Hotel business which failed so swiftly and substantially whilst she was its licensee, shareholder and director.
The Principal Issues
The Grounds of Appeal submitted, and the evidence, made it clear that the principal issues for our decision were as follows:-
whether or not Mr George is a fit person to be concerned in carrying on a residential home;
whether Mrs or Mr George has any intention that he be concerned in the running of the home;
whether or not Mrs George, and the company, are persons fit to be concerned in carrying on a residential care home.
The Witnesses
The Respondent called two witnesses - Mr Burgess (Senior Environmental Health Officer) and Mr Citarella (Deputy Director of Social Services) - and for the Appellants we heard the evidence of Mrs George and Mr George, Mr Miller and Mrs Miller, Mr Shakespeare, and Mr Dimmock.
The Tribunal's Findings
Mr George
We are quite satisfied from the evidence concerning "his conviction, his business history and his present bankruptcy" that paragraph 1 of the Statement of Reasons has been proved. On 11 October 1984, at Liverpool Crown Court, Mr George pleaded guilty to "doing acts calculated to interfere with the peace or comfort of a residential occupier or member of his household" and was sentenced to nine months imprisonment suspended for two years, a fine of £1,000 or 60 days imprisonment in default, and an order of forfeiture was made in respect of a shotgun and cartridges, arising from an incident earlier that year when - without seeking legal advice or other assistance - he took his own measures to eject persons from one of the (then) flats at 23 Abigburth Drive. He has since become bankrupt following the total collapse of a business venture at the Salutation Hotel in Cumbria. Mrs George did not deny that her husband's past would him unfit to be concerned in the running of a residential care home. Mr George did not seek to deny it himself.
Mrs George
We felt obliged to be very cautious and to weigh up most carefully all the evidence concerning Mr George to the extent that it was relied upon as affecting the application of Mrs George and the company. With regard to the fears of the registration authority regarding Mrs George's capacity to manage, derived chiefly from her participation in the business of the Salutation Hotel, we had no doubt that she worked hard, and probably conscientiously to the best of her ability. There was no evidence to suggest any inability to cope with management of staff or the practical aspects of housekeeping and catering. Nevertheless, having regard to all the evidence, we consider that it was an altogether ill-conceived and over optimistic venture, and considering that she was a director of the company that acquired and the ran the hotel, that she was the manageress, and that she lived through the entire venture as a wife as well as in those other capacities, we find that she cannot now validly disassociate herself from it and avoid all responsibility for the taking of decisions and the making of mistakes leading ultimately to the necessity for the appointment of the Receiver.
Many features of the evidence of Mrs George led us to conclude that she was an unreliable witness. She was, in our judgement, deliberately unforthcoming in connection with a number of matters - principally the details of such pecuniary contribution as she may have made to the company, and concerning her own personal financial obligations at the present time. Several statements of fact which she made to the registration authority, not only before the sub-committee on 19 May 1989 but on other occasions, have been proved to our satisfaction to have been either incorrect or misleading or both. For example, having told the registration authority t hat she had contributed £50,000 to the appellant company, she admitted before us that she never actually paid £50,000, or anything like that sum, in money and later added " I can't sear on oath exactly how mush I did put into the company". We were satisfied from her own evidence, that the loan of £140,000 was offered and paid by the Allied Irish Bank in the belief - fostered by her - that she had subscribed some £80,000 to the appellant company and that she was free of all debts, when such was not the case. We consider also that she acted irresponsibly, for example in summoning her husband to gain his active intervention for the purpose of eviction, and in the matter of the decision "arrived at after a lot of thought" to accommodate more than three residents in the home, especially at a time when the application for registration was under appeal to this Tribunal.
The Question of Intention
Mr and Mrs George, in previous affidavits and in their evidence, have stressed that Mr George does not participate in the running of the premises, nor is it in tended hat he would be involved in any way whatsoever in any aspect of the running of the home or responsibility for it. It was pointed out that for many months he has been living, and working full-time, elsewhere. However, we have concluded that his present absence is of no significance in that respect. We noted, for example, his explanation concerning two occasions when he travelled from afar, at short notice, in response to a telephone call from her desiring assistance or reassurance. We were satisfied t hat there is not question of any estrangement between them and that it is their wish to live together again. Mr George's own evidence left us in no doubt that the present separation from his wife is artificial and a temporary expedient to distance himself from the entire project.
Ever since the company was formed in 1987 Mrs George has remained the chairman, with a majority shareholding, and we cannot accept that the reason is truly "because it was my idea in the first place". Mr George is undoubtedly a man of strong entrepreneurial instincts and, apart from past business ventures of a different kind, he obtained planning permission in 1982 to convert the old coach house at 23 Aigburth Drive and to make use of it for residential purposes; he then sold it in late 1982 (retaining the several flats into which the remainder of the property was divided). He also obtained, in June 1982, planning permission for change of use of the property to a nursing home but lack of vacant possession appears to have been at least a contributory factor which precluded its conversion at about that time. Very shortly after the collapse of the business at the Salutation Hotel Mr George, on 25 February 1987, requested and was granted a fresh 99-year term in respect of 23 Aigburth Drive. In that connection he told us that his own aim was to increase the value of the premises and then get rid of them - because "one of the most valuable properties on the market today is a residential home" and "with registration their value would greatly increase overnight". The premises have since been converted. The appellant company has never had sufficient cash to pay him for his valuable contribution of work and building expertise in connection with the conversion - the evidence of his wife and both Mr and Mrs Miller makes it clear that he made a considerable sacrifice to organise and complete the conversion project and that the company and its officers are, in different senses, indebted to him. Mrs George herself, since at least 1987, has `had no spare cash anywhere'. We were not persuaded by her or her husband's evidence, nor by the letter of Miss Leece, that the running of this home would be the fulfilment of her dream of long-standing for caring reasons; we believe that any such hopes, even if they existed, have since been supplanted by purely commercial considerations. As a general proposition we find ourselves quite unable to agree with that part of the letter of Mr Breed, dated 20 July 1988, which refers to Mrs George as having "a responsible attitude towards finance and business matters". When cross-examined regarding the failure of the Salutation Hotel, debts, expenditure, the running of the appellant company, and the notion of purchasing Sundale, she gave us entirely the opposite impression. We are satisfied that she shares the business aspirations of her husband and would not seek to discourage him.
The Company
Incorporated on 4 November 1987, the appellant company purchased the assignment of the lease from Mr George on 4 March 1988. It would appear that no cash actually changed hands. The cash subscribed for the benefit of the company - in fact almost entirely by Mr Miller - had been expended. No company accounts were put before us at the hearing, and on the evidence we have heard we do not believe that any exist. Surprisingly there appears never to have been a company current account at any bank even though fees have been regularly received over a period from at least three residents. None of the officers of the company appeared able to recall, except in general terms and with prompting, the expenditure it had incurred nor the extent of its indebtedness. Mr Miller was the only person to have attempted to prepared any short of financial document - but his `schedule of payments' did not take matters very far. The total sum of borrowed money spent on the work of converting 23 Aigburth as a residential care home was clearly enormous. During the first 3 months of 1988 all work ceased, for lack of funds - but the work was completed by July 1988. The company was and still is in a state of massive financial indebtedness. Indebtedness to the Allied Irish Bank alone, at the time of this Tribunal hearing, was estimated to be in region of £200,000, interest accruing due as time passes if not compound on at least the original loan of £140,000. Some £50,000 is owed to leasing companies. The title to 23 Aigburth Road is substantially encumbered. The future availability of working capital is questionable. The home, if registered, would be capable of accommodating 19 residents; Mr Miller told us that more than 10 residents would be required before any profit could be expected. For all the foregoing reasons and those which follow we are of the opinion that none of the officers of the appellant company has the requisite competence in and understanding of sound financial projections and budgeting, nor do they individually or collectively possess a business-like approach. We are certain that the financial circumstances of the company and the shortcomings of its officers make it impracticable to manage the home on a secure basis and thus avoid risk to the welfare of future residents.
Mr and Mrs Miller
A very high degree of skill and competent control would scarcely sustain the appellant company, in its present financial state, in the running of 23 Aigburth Road as a residential care home. Mr Miller, after a career in the regular army of some 29 years followed by an excellent service testimonial, has no executive experience in running of a business and he does not appear to have sought advice or assistance in that direction so far. The evidence with regard to Mrs Miller's present state of health does not lie entirely at ease with the medical report of Dr Khattab dated 27 April 1988. We have no doubt that she is a caring person, but she too has no business experienced nor training that would assist her, either as an officer of the company or in the capacity of the person in charge in the absence of Mrs George. It was not suggested that either of these two persons would be concerned to any degree with the finances of the company. In our judgement these negative aspects do not of themselves suffice to render either Mr or Mrs Miller unfit persons in terms of section 9(a), but in the context of Golden Years (1979) Ltd, the pressure of its financial circumstances, and the influences that we feel sure would be exerted by Mr and Mrs George, their position is insecure and their capacity to make any contribution must be reckoned as insignificant. We were astonished to hear that neither of them appears to share any of the anxiety that one would have expected having heard the evidence of their involvement in the affairs of the appellant company. No doubt they feel, as Mrs Miller said, that "we've got to go forward, we cannot go back". We have no doubt that after becoming casually acquainted with Mr and Mrs George, they took the couple `at face value', made important decisions regarding their own personal affairs in order to participate in an attractive and seemingly straightforward proposition, and were sadly misled.
Conclusions
Having regard to the foregoing -
It is our unanimous finding that the appellant Mrs George is not a fit person to be concerned in carrying on a residential care home.
The Tribunal is satisfied - (a) that both Mrs George and her husband intend that the premises should be sold at what is perceived to be the most opportune moment as soon as possible after the enhancement of value which is expected to result from the grant of registration applied for, and (b) that Mr George intends, and would succeed in, exerting his influence to that end in the unlikely event that either of the other officers of the company (ie Mr or Mrs Miller) was opposed to or could seek to obstruct such a sale. The Tribunal holds that to this extent Mr George is to be regarded as a person `intended to be concerned in carrying on the home', and for that reason a refusal to register in terms of section 9(a) of the Act is justified.
It is our unanimous finding that the appellant company is not a fit person to be concerned in carrying on a residential care home.
G F Harwood
G S Dunn
M P J Burrell
16 October 1989