England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
THE ADMINISTRATIVE COURT
Mr Justice Mitting
CO/5101/2003

		Royal Courts of Justice Strand, London, WC2A 2LL
		24 May 2005

Sir William Aldous :

1. One of the main purposes of the Care Standards Act 2000 was to reform the regulatory system for care services in England and Wales which had been governed by the Registered Homes Act 1984 and certain provisions of the Children Act 1989. In England, Part 1 of the Act provides for an independent National Care Standards Commission, now called the Commission For Social Care Inspection, to undertake the regulatory functions. It also contains definitions for the purposes of the Act Part 2 of the Act makes provision for the regulatory procedures to be followed by the Commission and gives to the Secretary of State powers to make regulations in relation to the care services regulated under the Act.
2. Alternative Futures Limited (Futures), is a not for profit company limited by guarantee and is a registered charity. It was established in 1992, primarily to assist the retraction of the NHS institutional hospitals by providing care in the community. This took the form of small registered residential homes, nursing homes, and supported living services. At first, Futures provided both housing and personal services. In March 2001, Alternative Housing Limited (Housing) was established as a separate not for profit company to facilitate the move towards supported and assisted living. It is also registered as a charity. Futures and Housing are part of the Alternative Group.
3. Section 11 of the 2000 Act provides that "any person who carries on or manages an establishment or agency of any description without being registered under this part … shall be guilty of an offence". The care homes owned and operated by Futures were registered as such under the Registered Homes Act 1984 and remained registered under the 2000 Act when it came into force on the 1^st April 2002 . Futures applied under section 15(1) (b) of the 2000 Act, on 15^th May 2002 to cancel the registration of their houses as care homes. Four of their houses were considered by the Commission to be suitable for deregistration, but eleven were not. Futures appealed against the decision to refuse to cancel the registration of the eleven houses.
4. On appeal to the Care Standards Tribunal, Futures referred to section 3 of the Act which reads as follows:

"3.(1) For the purposes of this Act, an establishment is a care home if it provides accommodation, together with nursing or personal care, for any of the following persons.

(2) They are –

(a) persons who are or have been ill;

(b) persons who have or have had a mental disorder;

(c) persons who are disabled or infirm;

(d) persons who are or have been dependent on drugs.

(3) But an establishment is not a care home if it is –

(a) a hospital;

(b) an independent clinic; or

(c) a children's home,

or if it is of a description excepted by regulations."

5. Futures contended that the eleven homes no longer functioned as care homes as defined in section 3 as they provided supported living. That contention was based upon the reorganisation that had taken place within the Alternative Group. The freehold of the houses had been transferred to Housing with Futures providing care. Housing had then granted an assured tenancy to each of the residents. Put shortly, Features contended that because the accommodation element was provided by means of an assured tenancy the establishment ceased to be a care home as defined by section 3.
6. The hearing before the Tribunal lasted 11 days and involved many issues ranging from submissions on onus of proof to human rights and investigation of the tenancies. The Tribunal concluded:

"108. We have reached the unanimous decision that the eleven homes are establishments providing accommodation together with nursing or personal care for persons with a mental disorder (s3(1) Care Standards Act 2000). We wish to emphasise what we have stated in paragraph 60 above that our decision in this case is in no way a statement that the service users are better provided for in a care home environment than in a supported living environment."

7. Section 9 of the Protection of Children Act 1999 provides for an appeal from the decision of the Tribunal on issues of law. There was no appeal by Futures, but the appellants sought judicial review of the Tribunal's decision.
8. The appellants are all long term residents in the homes owned and run by Housing and Futures respectively which were the subject of the applications to deregister. Each of them is an assured tenant of a room in one of the houses and has a right with the other tenants to use the communal parts of the house. Each of them has a severe learning disability which requires them to receive personal care.
9. The propriety of the appellants' claim and their sufficiency of interest were initially challenged. That challenge was decided in the appellants' favour by Charles J. and was not pressed at the full hearing before Mitting J on15th October 2004. The reason, I understand, was that the Commission, like the claimants, desire clarification of the law relating to deregistration. We were told that there were a number of similar applications for deregistration which were awaiting the outcome of this appeal.
10. The judge in his judgment of 15^th October 2004 did not deal in detail with many of the issues raised before the Tribunal. He said that it was not necessary for him to comment on the human rights issues and assumed for the purposes of the hearing that the tenancies were valid. The validity of the tenancies was challenged in a respondents' notice, but that challenge was not pressed as the parties agree that the issues raised would, if the appeal succeeded, need to be referred back to the Tribunal for further findings of fact to be made and further argument.
11. I like the judge will assume that the appellants are assured tenants of Housing. That being so, they have a legal interest in the property and have the right to exclude others (see Street v Mountford [1985] AC 809). Even so, it is appropriate to record some of the matters to which we were referred. First the tenants all suffer from severe learning difficulties and the Commission are concerned that they may not have the capacity to enter into the tenancies. Second the grant of the tenancies may not in fact have made any difference to the way the tenants live or are cared for and may be a sham or a device to enable housing and other benefits to be obtained. Third, although the leases appear to be in a standard form for an assured lease, there are matters that suggest that they are not standard leases. For example the rent exceeds £700 per week and the tenant receives care.
12. Mr Berkley QC, who appeared for the appellants, submitted that at the heart of the appeal lay a question which was fundamental to the developing and changing attitudes to persons in need of care. There was a major social shift away from long term institutional care to living in the community. The significance of the grant of tenancies to the appellants was that they were transformed, from sharers of commodities including living space in an establishment which could properly be categorised as a care home, to living in their own homes and receiving domiciliary services.
13. Mr Berkley referred us to the white paper 'Valuing People' (March 2001) which stated "People with learning disabilities are amongst the most vulnerable and socially excluded in our society. Very few have jobs, live in their own homes or have choice over who cares for them. This needs to change; people with learning disabilities must no longer be marginalised or excluded. Valuing People sets out how the government will provide new opportunities for children and adults with learning disabilities to live full and independent lives as part of their local communities."
14. The appellants believe that they are better placed within the regime of autonomous house owners than in the more institutionalised care home environment. Their belief it seems is based, at least in part, on their ability to access housing benefit as well as other welfare benefits not available to residents of care homes. However the Department of Health guidance makes it clear that government policy does not support inappropriate changes to care homes which do not promote genuine independence. Whatever view is taken of the benefits or alleged benefits of deregistration for the appellants, the result of the appeal must depend upon the meaning of the words in section 3 of the Act 2000.
15. The appellants did not rely upon the division of responsibility between Housing and Futures. They argued their case upon the basis that Housing and Futures with their houses were an "establishment". They submitted that once a tenancy was granted, the relationship between them and the tenants changed. The tenants occupied their homes as of right not under licenses. It followed that the tenants were being provided with care in their own homes. That being so, neither Housing nor Futures were providing accommodation within the meaning of that word in section 3 of the Act. To support that construction of section 3, they referred us to section 4(3) of the Act which defines a "domiciliary care agency" as:

"(3) 'Domiciliary care agency' means, an undertaking which consists of or includes arranging the provision of personal care in their own homes for persons who by reason of illness, infirmity or disability are unable to provide it for themselves without assistance.'"

16. The appellants submitted that Housing and Futures did not supply accommodation. They were a domiciliary care agency supplying care to them in their own homes.
17. The judge rejected that submission. He put forward this working definition of the word establishment as used in section 3 of the Act: "A place, including a building, in which organised activities are conducted" and "the conduct of organised activities in a place, including a building in which organised activities are conducted" and," the conduct of organised activities in a place , including a building ." He went on in paragraphs 31 to 34 as follows:

"31. 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 '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.

32. 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.

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

"The registered person shall have regard to the size of the care home and the number and needs of service users …

(d) permit service users, so far as it is practicable to do so, to bring their own furniture and furnishings into the rooms they occupy.

34. Nothing in the tenancy agreement prevents any resident from doing just that, although the schedule which includes provision for depreciation of furniture and white goods suggests that they are, in fact, provided by Alternative Homes. Given 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. … "

18. Mr Berkley submitted the judge's view was contrary to the meaning of section 3. Neither Housing nor Futures were providing accommodation for the purposes of section 3 of the Act. Their buildings were occupied by the appellants, not as residential institutions, but comprised separate dwellings. The intention of the Legislature expressed in the Act and in the regulations under the Act was to offer a range of different models for living and imposed different schemes of regulation upon residential care homes, domiciliary care agencies and other agencies and establishments.
19. Mr Roger McCarthy QC for the Commission supported the conclusion of the judge. He drew attention to the consequences of the appellants' submissions, namely that it would be impossible for a person to be a tenant in a care home whether or not the lessor and care provider were the same person. It followed that an establishment could move away from being a registered care home by granting assured tenancies, even though the residents' needs and circumstances were unchanged and there was no actual difference in the way that the care was provided.
20. Mr McCarthy submitted, rightly in my view, that the word establishment did not have a technical meaning and therefore should be given its ordinary meaning. However that word must be construed in the context of section 3(1) and as part of it. As such an "establishment" must include a building to be a home, but can include a controller or organiser formed as a partnership, a company or companies. The word is wide enough to encompass Housing and Futures and their houses.
21. I conclude that the judge was right. No doubt Mr Berkley is right that the intention of the Legislature was to include within the Act a range of models of care facilities, but I can see no reason why an establishment cannot provide accommodation within the meaning of that word in section 3 of the Act whether or not the accommodation provided is by lease or licence. The crucial consideration is whether the establishment provides the accommodation together with nursing or personal care. That is essentially a question of fact which does not arise in the present case as the appellants accepted for the purposes of the appeal that Housing and Futures, together with each house, were an establishment. The establishment of a lessor and lessee relationship can be an indicator of a situation where an establishment does not provide both the accommodation and the care, but cannot be determinative.
22. I would dismiss the appeal.

Lord Justice Mance: I agree

Lord Justice Waller: I also agree