Mountforest Ltd v Leicestershire County Council

The Tribunal unanimously rules that the conditions which the Respondent purported to impose by its letter of 9 December 1988 are not binding on the Appellant. In exercise of its power under Rule 15 of the Registered Homes Tribunal Rules 1984 the Tribunal unanimously directs that the merits of the appeal shall be heard by the Tribunal at a place and on a date to be arranged between the parties and the Registrar.

REASONS

The Registered Homes Act 1984 makes a Registration Authority responsible for the supervision of Residential Care Homes which it has registered in its area. To enable it to discharge this responsibility effectively two sanctions are available to it - cancellation under Section 10 or the imposition or variation of conditions under Section 5. In urgent cases either of these sanctions may be imposed by a Justice of the Peace under Section 11.

Before 8 December 1988 there were two schools of thought about the scope of these sanctions. The difference revolved around the interpretation of Sections 5(4), 11(1)(a)(ii) and (iii) and 15(6). Did these sections give the Registration Authority, the Justice of the Peace and the Tribunal a wide discretionary power to impose and vary conditions, or did they limit those conditions to the two types of condition provided for in Section 5(3)? (Section 5(3) provides for a compulsory condition that the number of residents shall not exceed such number as may be specified in the Certificate of Registration, and optional conditions, also to be specified in the Certificate, regulating the age, sex or category of persons who may be received in the home.)

To coerce owners into good management, some authorities would exercise what they understood to be their wide discretionary power. They would impose conditions, believing that the threat of a prosecution under Section 5(5) for non compliance would be an effective rap over the knuckles, less damaging to the owner and the residents than cancellation of registration under Section 10. Other authorities, taking the narrower view of their power, were content to rely on the threat of cancellation of registration as the only available sanction.

On 8 December 1988 judgement was delivered in the Queen's Bench Division in the case of the Warwickshire County Council v. McSweeney, deciding that the power of Registration Authorities and the Tribunal (and, by necessary implication, Justices of the Peace) to impose conditions is limited to the two types of condition provided for in Section 5(3). This decision is, of course, binding on Registration Authorities, Justices of the Peace and the Tribunal. So the narrower view of their power to impose conditions was prevailed.

It is also necessary to point out that because the High Court in McSweeney declared the correct interpretation of the Act, its decision is retrospective in the sense that a wrong interpretation carried into effect before 8 December 1988 has no more validity than a wrong interpretation carried into effect since that date. The effect that Leicestershire's final decision in the present case was made the day before judgement in McSweeney was delivered is therefore immaterial. The law that this Tribunal must apply is the law as declared in McSweeney.

Mountforest and Leicestershire are in dispute about the effect of Mountforest's division of one double room into two single rooms. Mountforest maintains that both the single rooms are suitable for occupation by single residents, and Leicestershire maintains that they are unsuitable. By letter dated 28 September 1988 Leicestershire gave Mountforest notice of its proposal to impose the following conditions:-

Mountforest duly made oral and written representations, and by letter dated 9 December 1988 Leicestershire informed Mountforest of its decision to impose the following conditions:-

It is against that decision that this appeal is brought. It was agreed by Counsel that, although it might not normally be permissible to have regard to what has taken place since the date of the decision appealed against, the figure 19 in paragraph (1) quoted above should be taken as 20 and the figure 20 in paragraph 2 should be taken as 21. This will therefore be done

It was agreed to hold a preliminary hearing on questions of law only, because this was clearly a case in which the legal effect of Leicestershire's two letters required to be decided before evidence on the merits was led, it being arguable that the appeal could be finally determined on the law alone without any evidence being led.

It is necessary to look first at the second letter, the decision letter of 9 December 1988. Mr Newman submitted that the three conditions contained in that letter failed to comply with the requirements laid down in McSweeney: they were not conditions of either of the types provided for in Section 5(3), they were too uncertain to be included in the Certificate of Registration as required by Section 5(3) and too uncertain to ground possible criminal liability under Section 5(5). Mr McCarthy invited as to analyse conditions (1) and (2) as specifying the number of residents in conformity with the first part of Section 5(3), in each case with a preamble explaining the circumstances which would bring the condition into operation. He conceded that paragraph 3 could not be interpreted as a valid condition.

We do not find it necessary to decide, in principle, whether it is permissible to dissect a letter of decision, keeping the valid conditions and discarding the invalid additions. In some cases it may be permissible to adopt such a course, but in our view this is not such a case. The three conditions imposed by the decision letter, as we read them, constitute a unitory scheme for correcting what Leicestershire has adjudged to be the mistake of building a partition to divide the one double room into two single rooms. As a unitory scheme it clearly cannot be brought within Section 5(3) as required by McSweeney, so it must fail. We therefore rule that the conditions imposed by the decision letter are not binding on Mountforest.

Mr Newman submits that it should follow that the appeal be allowed, leaving it to Leicestershire to make a fresh start if it wishes. Mr McCarthy submits that this course should not be followed but that the Tribunal should proceed to hear the dispute on its merits.

In deciding which of these two courses to adopt, we must first consider the possibility of prejudice to residents. In accordance with Section 14(3)(b) Leicestershire's decision to impose conditions does not take effect until this appeal is determined or abandoned, so it is lawful for Mountforest to continue to house residents in the two disputed single rooms. If this creates a serious risk to life, health or well-being, Leicestershire can, of course, proceed under Section 11. But it is not suggested that this situation is likely to arise. Nevertheless, if Leicestershire is right about the unsatisfactory nature of the two single rooms, it is desirable in the interests of residents that the quicker, rather than the slower method of remedying the situation, be adopted. It will be quicker to proceed with the present appeal on the merits than to allow the appeal and leave it to Leicestershire to make a fresh start.

Next we must consider the question of cost, bearing in mind that we have no power to award costs against either party. It is obviously desirable to adopt the course that will be less expensive to both parties. We are assured by Counsel that the parties are at loggerheads over the basic question of the suitability of the two single rooms, so if we allow the appeal and Leicestershire makes a fresh start, there will inevitably be a further appeal. It would clearly be less expensive to both parties to continue with the present appeal on the merits.

Finally, we must consider whether there will be any prejudice to either party if we proceed to hear the appeal on the merits. Mr Newman says there will, and this question took up the larger part of the time spent in argument.

Mountforest's complaint is that it was prejudiced by Leicestershire's failure to give proper notice of the conditions it purported to impose by its letter of 9 December 1988. It failed, so it is said, in two respects. First, its letter dated 28 September 1988 did not comply with Section 12(4)(c) because the proposals it contained were not conditions as defined in McSweeney. Second, the letter of 9 December 1988 did not amount to an adoption, for the purposes of Section 14(1), of the proposals contained in the letter of 28 September 1988 because the sets of conditions in the two letters were substantially different. The representations made by Mountforest under Section 13 were against the invalid proposals of 28 September 1988 and its has never had an opportunity to make representations against the conditions imposed on 9 December 1988.

In answer to this complaint Mr McCarthy relied on the decision of the House of Lords in London and Clydeside Estates Limited v. Aberdeen District Council [1980] 1WLR183. In our view, that decision requires us to examine Leicestershire's non compliance with the statutory requirements "in the light of the concrete state of facts and a continuing chain of events". We are not obliged to draw the conclusion that Leicestershire's actions are so devoid of legal effect that the appeal against them cannot proceed on the merits. There has been a continuing chain of events in that, although Leicestershire has changed its mind over the exact terms of the conditions it sought to impose, it has never left Mountforest in any doubt about the nature of its complaint. This is simply that the division of the double room has created two single rooms which are unsuitable for accommodating residents. Mount forest denies that this is do. The substantial issue between the parties has been clear throughout. The concrete state of facts is that the two single rooms are there for witnesses and the Tribunal to see. In these circumstances we can see no prejudice to either party if we proceed to hear the appeal on the merits. The case fits into the spectrum of possibilities, to which Lord Hailsham of St Marylebone referred in London and Clydesdale at page 189 G-H, as a case in which Leicestershire's actions have been so invalid as not to be binding on Mountforest, but not so invalid as to preclude the Tribunal from hearing the appeal on its merits.

We do not find it necessary to decide the precise limits of the power to impose conditions which is given by Section 5(3), nor the amount of latitude that can be permitted in complying with Sections 12(4) and 14(1). These questions were argued in some detail, but we have found it possible to reach a conclusion without deciding them.

Rule 15 of the Registered Homes Tribunal Rules 1984 empowers us to regulate our own procedure, and in exercise of that power we therefore direct that the merits of the appeal will be heard by us at a place and on a date to be arranged between the parties and the Registrar.

R H CHRISTIE
G S DUNN
M O WOODIER