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Cite as: [2001] ScotCS 94

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FIRST DIVISION, INNER HOUSE, COURT OF SESSION
Lord President Lord Bonomy Lord Weir	P5/14G/99 OPINION OF THE LORD PRESIDENT in RECLAIMING MOTION in the cause MARY ROBERTSON (A.P.) Petitioner; for JUDICIAL REVIEW OF DECISION OF FIFE COUNCIL DATED 8 DECEMBER 1998 and 22 JANUARY 1999 _______

 

 

Act.: Hajducki, Q.C., Sandison; Morison Bishop W.S.

Alt.: Bovey, Q.C., R. Thomson; Balfour & Manson W.S.

20 April 2001

[1] History

On 9 October 1995 the petitioner and reclaimer, Mrs. Mary Robertson, disponed her house at 87 Main Street, Newmills, Fife to her three sons, Alexander, Gavin and Graham Robertson, for love, favour and affection. During 1997 she began to become confused and stayed for periods of care and supervision at the Jean Mackie Centre in Dunfermline. In about March 1998 the social work officers of the respondents, Fife Council, became concerned that the care which she was receiving might not be sufficient for her needs and they accordingly carried out a needs assessment in terms of Section 12A of the Social Work (Scotland) Act 1968 ("the 1968 Act"). The conclusion was that the petitioner needed constant long-term care and she accordingly went to live in the Matthew Fyfe Residential Home. When she moved into the Home, the respondents assessed her financial position in terms of the National Assistance (Assessment of Resources) Regulations 1992 ("the 1992 Regulations") in order to determine her ability and liability to pay the cost of her accommodation. On the information then given to the respondents' officer, she concluded that the petitioner had less than £16,000 in capital and that she therefore did not require to pay any additional sum because of her capital.

[2] In about the middle of August 1998 the respondents began to suspect that the petitioner was not able to receive the help she needed in the Residential Home and therefore, over the period to November, they carried out a further needs assessment which concluded "that the petitioner was in need of full-time residential nursing care". In terms of Section 13A of the 1968 Act the respondents cannot themselves own or manage nursing homes and must instead make appropriate arrangements for the provision of suitable residential accommodation where nursing is provided. The respondents arranged for the petitioner to have a room in the Forth Bay Nursing Home run by Kingdom Care at Kincardine and, when that was no longer available in December 1998, she moved to the Kincardine Bridge Nursing Home, also run by Kingdom Care. If the respondents provide this kind of assistance, they must, of course, pay the nursing home concerned and they are then required by Section 87(3) to recover their outlays in accordance with Section 26(2) of the National Assistance Act 1948 ("the 1948 Act"). In connexion with the petitioner's admission to the nursing home, the respondents carried out a further assessment of her means and, on this occasion, the official concerned became aware that the petitioner had transferred her house to her sons for love, favour and affection some three years before. Eventually, the respondents' Head of Social Work concluded that the petitioner had transferred her house, partly at least, for the purpose of reducing the charges which she would be liable to pay for her accommodation and nursing care. In these circumstances, for reasons which I shall have to investigate in more detail, the respondents decided that they would not themselves provide the petitioner with residential nursing care until her capital assets, including her notional capital, had been depleted to £16,000. They were, on the other hand, happy to make suitable arrangements between Kingdom Care and the petitioner's representatives for such residential nursing care to be made available.

[3] The respondents' decision not to arrange residential nursing care was in effect contained in two letters of 8 December 1998 and 22 January 1999, although they must both be read in the light of a further letter from the respondents dated 8 January 1999 which does not appear to have been before the Lord Ordinary. In this petition for judicial review the petitioner seeks decree of reduction of the respondents' decision and decree ordaining them to make all the arrangements necessary for securing the provision to her of permanent residential nursing care. The Lord Ordinary dismissed the petition and the petitioner has reclaimed against her decision, which is reported as Robertson v. Fife Council 2000 S.L.T. 1226. Despite this, the petitioner continues to reside in the Kincardine Bridge Nursing Home and the respondents continue to pay for her care. The exact basis for this was not explored in detail before us and is not of relevance to the point which we have to decide. The present position comes about, in part at least, however, as the result of an interlocutor of Lord Marnoch dated 30 June 1999: on consignation by the petitioner of £2,500 in the name of the Accountant of Court, he granted interim suspension of the respondents' decision and interim interdict against the respondents from terminating the arrangement under which the petitioner is afforded residential care in the nursing home.

[4] Legislation

The point in issue between the parties is difficult and anxious. To understand it, the relevant legislation must be examined in more detail. Part II of the 1968 Act deals with the promotion of social welfare by local authorities. The duties and powers of local authorities contained in Part II, along with Sections 7 and 8 of the Mental Health (Scotland) Act 1984, comprise community care services in Scotland (Section 5A(4) of the 1968 Act). Section 12, which opens Part II, provides inter alia:

"(1) It shall be the duty of every local authority to promote social welfare by making available advice, guidance and assistance on such a scale as may be appropriate for their area, and in that behalf to make arrangements and to provide or secure the provision of such facilities (including the provision or arranging for the provision of residential and other establishments) as they may consider suitable and adequate, and such assistance may, subject to subsections (3) to (5) of this section, be given in kind or in cash to, or in respect of, any relevant person.

...

(3A) In determining for the purposes of this section whether to provide assistance by way of residential accommodation to a person, a local authority shall disregard so much of the person's capital as does not exceed the capital limit for the purposes of section 22 of the National Assistance Act 1948.

(3B) For the purposes of subsection (3A) of this section -

(a) a person's capital shall be calculated in accordance with

assessment regulations in the same way as if he were a person for whom accommodation is proposed to be provided under this Act and whose ability to pay falls to be assessed for the purposes of section 22(3) of the National Assistance Act 1948; and

(b) 'the capital limit for the purposes of section 22 of the National

Assistance Act 1948' means the amount for the time being prescribed in assessment regulations as the amount which a resident's capital (calculated in accordance with such regulations) must not exceed if he is to be assessed as unable to pay for his accommodation at the standard rate; and in this subsection 'assessment regulations' means regulations made for the purposes of section 22(5) of the National Assistance Act 1948 or section 87(5) of this Act."

[5] Subsection (1) is really the foundation for the provision of community care by local authorities, such as the respondents. It imposes on them a general duty to make available advice, guidance and assistance on such a scale as may be appropriate for their area. In executing that duty they are to make arrangements and they are also to provide, or secure the provision of, such facilities as they may consider suitable and adequate. One form which the provision of facilities may take is the provision of residential and other establishments and arranging for the provision of these establishments. But Parliament has not contented itself with this general statement of the responsibilities of local authorities. Rather, it has gone on in Part II to enact a series of further provisions. In some of them the local authority are given a specific power to provide a particular form of assistance. For instance, Section 13 gives a local authority power to assist persons, for whom employment has been found, in disposing of the produce of their work. The local authority are not under a duty to provide that kind of assistance but may do so if they so choose. Other provisions take the form of duties. Notably, for example, under Section 14 local authorities must provide, or arrange for the provision of, domiciliary services for households where those services are required in certain circumstances. This is the basis upon which the much-valued local authority home-help services are provided. On the other hand, under the same section, local authorities are simply given the power, rather than the duty, to provide laundry services for homes where domiciliary services are provided.

[6] Section 13A, which was inserted by Section 56 of the National Health Service and Community Care Act 1990 ("the 1990 Act"), is among the provisions in Part II of the 1968 Act which impose a duty on local authorities. Subsections (1) and (2) provide:

"(1) Without prejudice to section 12 of this Act, a local authority shall make such arrangements as they consider appropriate and adequate for the provision of suitable residential accommodation where nursing is provided for persons who appear to them to be in need of such accommodation by reason of infirmity, age, illness or mental disorder, dependency on drugs or alcohol or being substantially handicapped by any deformity or disability.

(2) The arrangements made by virtue of subsection (1) above shall be made with a voluntary or other organisation or other person, being an organisation or person managing premises which are -

(a) a nursing home within the meaning of section 10(2)(a) of the

Nursing Homes Registration (Scotland) Act 1938 in respect of which that organisation or person is registered or exempt from registration under that Act; or

(b) a private hospital registered under section 12 of the Mental

Health (Scotland) Act 1984, for the provision of accommodation in those premises."

[7] By virtue of Section 87(3) accommodation provided under the 1968 Act is to be regarded as accommodation provided under Part III of the 1948 Act and Sections 22(2) to (8) and 26(2) to (4) of that Act as amended are to apply accordingly. Under Section 22 of the 1948 Act a local authority which actually provide accommodation must charge the residents for that accommodation and the residents are liable to pay the whole cost of that accommodation or, if they cannot afford the full amount, a lesser sum calculated in accordance with the 1992 Regulations. Subsection (3) is in these terms:

"Where a person for whom accommodation in premises managed by any local authority is provided, or proposed to be provided, under this Part of this Act, satisfies the local authority that he is unable to pay therefor at the standard rate, the authority shall assess his ability to pay and accordingly determine at what lower rate he shall be liable to pay for the accommodation."

Subsection (4) provides that, in carrying out the assessment, the local authority are to assume that the resident will need a prescribed sum for his personal requirements. The effect is that this sum will be left to the resident for his own use. Subsection 5 then provides:

"In assessing as aforesaid a person's ability to pay a local authority shall give effect to regulations made by the Secretary of State for the purposes of this subsection...".

Where a local authority have to arrange rather than provide residential nursing care, the position is covered by Section 26 of the 1948 Act. In terms of Section 26(1) the arrangement with the nursing home must provide for the local authority to make a payment to the nursing home and the local authority must recover from the resident "the amount of the refund which he is liable to make" in accordance with the provisions of Section 26. Among those provisions is Section 26(3):

"Subject to subsection (3A) below a person for whom accommodation is provided, or proposed to be provided, under such arrangements shall, in lieu of being liable to make payment therefore in accordance with section twenty-two of this Act, refund to the local authority any payments made in respect of him under the last foregoing subsection:

Provided that where a person for whom accommodation is provided, or proposed to be provided, under any such arrangements satisfies the local authority that he is unable to make a refund at the full rate determined under that subsection, subsections (3) to (5) of section twenty-two of this Act shall, with the necessary modifications, apply as they apply where a person satisfies the local authority of his inability to pay at the standard rate as mentioned in the said subsection (3)."

The 1992 Regulations are complex but for present purposes I need refer to only a few of them. Regulation 20 provides that no resident is to be assessed as unable to pay the full cost of his accommodation if his capital calculated in accordance with the relevant regulations exceeds £16,000. Regulation 25, which is headed "Notional capital", is central to this case. Regulation 25(1) is in these terms:

"A resident may be treated as possessing actual capital of which he has deprived himself for the purpose of decreasing the amount that he may be liable to pay for his accommodation...".

Regulation 28 deals with the situation where the resident's capital, calculated in accordance with the regulations, is between £10,000 and £16,000. The resident is then treated as having an income of £1 per week for every £250 by which the capital exceeds £10,000. The effect is that the resident must pay a maximum of £24 per week more than he would otherwise pay. Once the resident's capital diminishes to £10,000, it is disregarded for the purposes of determining the amount that he must refund to the local authority for the cost of his accommodation.

[8] Although there was some dispute about the exact nature of the duty concerned, parties were agreed that Section 13A of the 1968 Act was the section which actually imposed a duty on local authorities to make arrangements for residential nursing care. This particular duty was simply one embodiment of the duty in Section 12 to provide, or to arrange for the provision of, residential accommodation. At its most basic, the petitioner's case is that she is someone who, by reason of her mental condition, is now in need of residential accommodation where nursing care is provided. She is, accordingly, a person to whom the respondents owe a duty under Section 13A to make arrangements for such accommodation to be provided to her. That duty to arrange the provision of residential nursing care is, she says, not qualified and the respondents, accordingly, erred in law when they decided not to perform their duty towards her because they had assessed her capital as exceeding the prescribed amount under Regulation 20, £16,000.

[9] Taking Account of the Person's Resources

The respondents say that they were entitled to proceed in the way that they did. In particular, they were entitled to have regard to the petitioner's assets when deciding whether to provide assistance of this kind. As I noted in paragraphs 1 and 2, before they decided to provide the petitioner with residential accommodation in March 1998 and again, when considering whether to arrange for the provision of residential care in the autumn of the same year, the respondents carried out an assessment of her needs for their services. This is a step which Section 12A of the 1968 Act requires local authorities to take when it appears to them that someone may be in need of community care services. The section, which was inserted into the 1968 Act by Section 55 of the 1990 Act, provides inter alia:

"(1) Subject to the provisions of this section, where it appears to a local authority that any person for whom they are under a duty or have a power to provide, or to secure the provision of, community care services may be in need of any such services, the authority -

(a) shall make an assessment of the needs of that person for those

services; and

(b) having regard to the results of that assessment, shall then

decide whether the needs of that person call for the provision of any such services.

(2) Before deciding, under subsection (1)(b) of this section, that the needs of any person call for the provision of nursing care, a local authority shall consult a medical practitioner."

The respondents contend that, either when deciding, under subsection (1)(b), whether the needs of the person call for them to arrange for the provision of residential nursing care, or else, subsequently, when deciding whether actually to make the arrangement, a local authority are entitled to take account of the person's financial position and, in particular, his capital. The respondents argue that, so far as capital is concerned, the position is put beyond doubt by the terms of subsections (3A) and (3B) of Section 12. According to the respondents, those subsections tell a local authority what they must disregard in determining whether to provide assistance by way of residential accommodation and, by implication, they also tell the local authority what they can have regard to: if Parliament has said that, when determining whether to provide that assistance, a local authority must disregard capital which does not exceed the capital limit, then Parliament must have intended that they should be permitted to have regard to capital which does exceed that limit. For the petitioner, counsel argued that this was an illegitimate inference. Parliament had inserted these subsections for a very limited purpose. They had been intended to confirm, rather than to change, the existing state of the law. It was therefore unsound to use them as the basis for inferring that local authorities were entitled to have regard to a person's capital in determining whether to provide this service when the rest of the 1968 Act and, in addition, the statutory guidance issued by the Secretary of State showed clearly that this was an irrelevant consideration.

[10] I shall have to consider Section 12A and the relevant guidance shortly, but it is convenient to look first at the argument based on subsections (3A) and (3B) of Section 12. They were inserted into the 1968 Act by the Community Care (Residential Accommodation) Act 1998, which resulted from a Private Member's Bill promoted in order to confirm the decision of the Court of Appeal in R. v. Sefton Metropolitan Borough Council ex parte Help the Aged [1997] 4 All E.R. 532. Sefton

Council faced heavy demands for residential nursing care which put pressure on their resources. The Council accordingly adopted a policy of arranging for the provision of residential nursing care only if the person concerned had capital of less than £1,500. If the person had more than that sum, she had to pay for her own care. This meant that, although the person actually received residential nursing care, the Council effected a saving since, if they had themselves made the arrangements under the English equivalent of Section 13A, they could not have recovered the full cost of the nursing home charges from the resident if her capital was less than £16,000. Help the Aged brought judicial review proceedings to challenge the Council's policy on the ground that it defeated the intention of Parliament in enacting Section 26 of the 1948 Act and approving the 1992 Regulations. Parliament's intention had been that people who had less than £16,000 in capital should not pay the whole cost of their residential nursing care. The Court of Appeal accepted this argument and held that the Council's approach was incompatible with the legislation. It appears that, although Help the Aged had won the case, they never the less thought that it would be best to have the position put beyond doubt and so Mr. Marsha Singh M.P. introduced the Bill which led to the 1998 Act. Precisely because the Court of Appeal judgment was thought to represent a proper interpretation of the law at the time, it was emphasised during the passage of the Bill that, if enacted, it would not actually change, but merely confirm, the existing law.

[11] In these circumstances Mr. Sandison stressed that subsections (3 Section 12 had not been intended to change the law. I agree with that part of his submission. He went on, however, to submit that, in order to discover what the law was, we should look at the rest of the legislation and, in particular, at Section 12A. We should also have regard to the guidance issued by the Secretary of State under Section 5(1). But we should in effect have no regard to Section 12(3A) and (3B). I reject that aspect of his submission. An Act of Parliament must be construed as a whole and, where it has been amended, in seeking to ascertain the intention of Parliament, a court has to have regard to the Act in its amended form. That being so, it would be entirely contrary to principle to construe the 1968 Act without taking account of Section 12(3A) and (3B). In those subsections I find the clearest possible indication that Parliament intends that, when a local authority are deciding whether to provide assistance by way of residential accommodation, they can properly have regard to the person's capital. If, as Mr. Sandison contended, it had not previously been open to the local authority to have any regard whatever to the person's capital, there would have been no need for Parliament to enact these subsections. As he readily acknowledged, on his approach, the subsections were entirely otiose. But it is well settled that we cannot adopt a construction of the statute which leads to the conclusion that two of its provisions are otiose, unless no other construction is open to us. See, for instance, Bennion, Statutory Interpretation (third edition 1997) pp. 898 - 899. Here, of course, as I have indicated, there is a construction which avoids that result. It follows that the construction for which Mr. Sandison contended must be rejected. I am therefore satisfied that, when deciding whether to provide someone with assistance by way of residential accommodation, a local authority may properly have regard to his capital where it exceeds £16,000. Moreover, as subsection (3B) makes clear, what the local authority can take into account is the person's capital, including notional capital, as calculated in accordance with the 1992 Regulations.

[12] Assessment under Section 12A

While the basic intention of Parliament emerges quite clearly in this way, the amendments to the 1968 Act were effected in a clumsy fashion. For instance, the two new subsections were put into a fascicle of subsections, (3) to (5), which are expressly recognised in subsection (1) as forming a group and which are concerned with the entirely different matter of the provision of assistance in kind or cash. More importantly, while the new subsections were presumably inserted into Section 12 because they were intended to cover the provision of all types of residential accommodation, their position leaves some doubt as to how subsection (3A) relates to the provisions for assessment in Section 12A. In the hearing before us, this led to a certain amount of discussion as to whether the process of determining whether to provide assistance in the form of residential accommodation fell within the scope of the assessment procedure under Section 12A or formed a separate stage which came later. Counsel for the respondents submitted that, if the court did not consider that the local authority could have regard to the person's resources within the Section 12A procedure, then one would simply have to envisage the point being considered at a stage which would follow the Section 12A procedure.

[13] Mr. Sandison argued that there was no room for consideration of the person's resources within the assessment procedure in Section 12A. That procedure comprised two parts: first, the local authority had to assess the person's needs for community care services; secondly, the local authority had then to decide in the light of that assessment whether the person's needs called for the provision of any such services. The two stages had to be kept separate and, as Circular 11/91 issued by the Social Work Services Group ("SWSG") of the Scottish Office made clear, the assessment should be "needs-led, not service-led". A needs-led approach simply involved assessing the person's situation and determining what was needed to deal with his problems. At the next stage the local authority would look to see what services it could provide to meet those needs. In neither stage of that procedure was there any room for taking into account the person's financial circumstances. And indeed one striking feature of Circular 11/91 was that it made no mention whatever of the person's resources when describing how the assessment procedure under Section 12A should be carried out. Even more importantly, when the Circular mentioned the assessment of the person's financial means in paragraph 11, it was in the context of charging for the provision of the service. The paragraph ended by saying, "The assessment of financial means should, therefore, follow the assessment of need and decisions about service provision." This showed that the Secretary of State had considered that there was to be no consideration of the person's financial means at the stages of the assessment of need and of the assessment of the service to be provided to meet that need. The local authority could not follow a policy which departed from the guidance given in this circular issued in accordance with a specific statutory provision. In terms of Section 5(1) Parliament had required local authorities, such as the respondents, to follow the path charted by the Secretary of State's guidance, with liberty to deviate from it when they judged, on admissible grounds, that there was good reason to do so, but without freedom to take a substantially different course (R. v. London Borough of Islington ex parte Rixon [1997] ELR 66 at p. 71 C - D per Sedley J., as he then was).

[14] This is indeed a powerful argument. Ultimately, however, its force depends on the premise that the only point at which a local authority could have regard to the individual's capital assets would be in the course of the assessment procedure carried out under Section 12A(1). And, on one view, that might have been an appropriate context within which to consider this factor. In examining the issue, it is necessary to recall that the scope of Section 12A is general and that the machinery applies to all of a local authority's community care services, whether or not the local authority are bound to provide them, whether or not they are bound to charge for them and whether or not they do in fact charge for them. The same applies to Circular 11/91. In many cases the person's resources may therefore have no particular relevance and in those cases, on any view, one would not expect them to be considered in any assessment under Section 12A(1). Where, however, Parliament intends that a local authority should have the power to have regard to the person's capital when deciding whether to provide residential accommodation, it seems to me that, if considered in isolation, the terminology used in Section 12A(1) would be apt to permit a local authority to have regard to a person's resources as part of that assessment procedure. Whether they should in fact do so would depend inter alia on any guidance issued under Section 5(1). The first stage of the procedure, in paragraph (a) of subsection (1), involves the assessment of the person's needs and is not concerned with the provision of services as such. It is the second stage, in paragraph (b) of subsection (1), which concerns the provision of services. The local authority have to consider whether the needs of the person "call for" the provision of any community care services. That appears to me to be a context within which Parliament could have provided for the local authority to consider the person's capital resources. The need of a person for residential nursing care would "call for" the local authority's service of arranging for the provision of residential accommodation with nursing under Section 13A if the person concerned would be unable to pay the entire cost of such accommodation himself. Where, however, the person had, say, substantial capital resources, then the local authority might consider that his need for residential nursing care did not "call for" that service from the council: they might decide that his need called only for them to assist him by arranging for him to contract with a nursing home to provide him with the necessary residential nursing care. This would be the basis for their decision not themselves to arrange for residential nursing care to be provided. Such a scheme would, in my view, be coherent.

[15] But, however that may be, I have reached the conclusion that Parliament views the situation somewhat differently. More particularly, as the terms of subsection (3A) indicate, Parliament envisages that the local authority would be having regard to the person's capital, not in the course of an exercise being conducted under Section 12A, but in determining whether to provide assistance by way of residential accommodation "for the purposes of" Section 12. There was no real dispute in the hearing before us that, in the case of residential nursing care, Section 13A embodied a more particular duty to provide assistance by way of residential accommodation and that, in performing their duty under Section 13A, a local authority were simultaneously performing their duty under Section 12. That being so, Parliament envisages that the local authority will have regard to the person's resources when, in the light of the assessment carried out under Section 12A, they are determining whether to arrange the provision of residential accommodation with nursing, in fulfilment of the duty imposed on them by Sections 12 and 13A. In saying this I am simply reiterating the conclusion of the Lord Ordinary (2000 S.L.T. at p. 1231 E - F). There is, moreover, no inconsistency between this interpretation of Section 12(3A) and any conclusion that, whether because of the Secretary of State's guidance in Circular 11/91 or for any other reason, the local authority are not to assess the person's financial resources during the Section 12A procedure. It follows that the respondents did not err in law by taking the petitioner's capital assets, as calculated in accordance with the 1992 Regulations, into account in deciding whether to arrange residential nursing care for her.

[16] The Section 13A Duty

During the hearing before this court there was considerable discussion about the nature of the duty of a local authority under Sections 12 and 13A of the 1968 Act. Mr. Sandison argued that the local authority are under a duty to arrange for the provision of residential nursing care if they decide, as a result of their assessment under Section 12A(1), that the person's needs "call for" that service. For the respondents, Mr. Bovey, Q.C., argued that the duties laid on local authorities under Sections 12 and 13A were target duties and that a local authority did not owe a duty to any individual such as the petitioner. Indeed the local authority had a discretion as to whether to perform the service. This was consistent with the fact that in Section 12A(1)(b) Parliament had used the expression "call for" rather than the (stronger) "require". A person's needs could "call for" the provision of services without actually requiring that they should be provided. Since a local authority were under no obligation to any individual to provide the service, it followed that the petitioner could not take proceedings for any failure by the respondents to arrange for the provision of residential nursing care for her. Section 5(2) gave the Scottish Ministers power to issue directions to local authorities as to the manner in which they were to exercise any of their functions. That was a powerful mechanism for correcting any failures by local authorities and it was the method which Parliament intended should be followed. In Section 5B Parliament had also provided a procedure for dealing with complaints by individuals about a local authority's discharge of, or failure to discharge, their duties under the 1968 Act. That, rather than litigation, was the remedy given to aggrieved individuals.

[17] It is unnecessary to reach a concluded view on the exact nature of the duty of a local authority under Sections 12 and 13A since, however stringent it may be, in the light of the terms of Section 12(3A) and (3B) a local authority carrying out that duty are entitled to have regard to the capital resources of the individual concerned, where they exceed the prescribed amount. Subject to that qualification, I should be reluctant to accept that Parliament intended that a local authority should have no more than a discretionary power to provide residential accommodation with nursing care. I would, in particular, reject Mr. Bovey's linguistic argument. In Chambers 20th Century Dictionary, for example, "require" is given as one of the meanings of "call for", while the New Oxford Dictionary of English gives "make necessary". Furthermore, Section 12A assessments require to be carried out "where it appears to a local authority that any person for whom they are under a duty or have a power to provide, or secure the provision of, community care services may be in need of such services". The purpose of such assessments under Section 12A is to provide the local authority with information which they can use in deciding whether, in the particular case which has come to their attention, the individual's need call for them to provide services, or any particular service, in the execution of their duties or in the exercise of their powers under Part II of the Act and under the Mental Health Act. That being so, where Parliament has imposed a duty on the respondents to arrange for residential nursing care and the respondents decide that the individual's needs "call for" that service, then prima facie, and subject to taking account of the individual's resources, the respondents should provide it. But since I do not need to decide the point, I prefer to reserve my opinion, especially because, at times, the respondents' argument came close to being an argument on title to sue even though there was no supporting plea-in-law.

[18] Notional Capital

Counsel for the petitioner argued that, even if the respondents had been entitled to take the petitioner's resources into account in deciding whether to arrange residential nursing care for her, they had not been entitled to decide that her needs did not call for such care on the basis of an artificial calculation which included notional capital that she did not actually possess. In making this submission Mr. Sandison was careful to point out that the provisions of Section 12(3B)(a) meant that any calculation of assets was to be done on the basis of the 1992 Regulations and that it would therefore have to include notional capital. None the less, where, as here, it was only by including such notional capital that the person's capital assets exceeded £16,000, the respondents could not properly decide not to arrange residential nursing care. To do so was to distort the legislation. As Section 12A and SWSG Circular 11/91 made abundantly clear, the purpose of the 1968 Act was first and foremost to provide for people's needs. Here, as the respondents themselves admitted, their own assessment had shown that the petitioner needed full-time residential nursing care. The legislation intended that in those circumstances the respondents should arrange that care, not that they should put the artificially inflated resources at the forefront of their consideration and, on that basis, refuse her the service which she needed and which they were able to arrange.

[19] Again, this was a powerful argument. But it is one which it is difficult to sustain if, as I have held, the respondents were entitled to have regard to any notional capital of the petitioner, as calculated under the 1992 Regulations, when determining whether to arrange for the provision of residential nursing care for her. The reason why local authorities are permitted to take account of notional capital for this purpose is, as counsel for the respondents insisted, that such a power is necessary if the underlying scheme of the legislation is to be applied in a coherent fashion. So far as charging is concerned, the provision of residential accommodation is treated differently from the provision of most other services under Part II of the 1968 Act and the relevant sections of the Mental Health Act. Under Section 87(1) the general rule is that, in respect of a service which they provide, the local authority have a power to "recover such charge (if any) for it as they consider reasonable". In the case of residential accommodation, however, as I have already pointed out in paragraph 7, by virtue of Section 87(3) the local authority must make a charge for the accommodation. Indeed in the case of nursing home accommodation they must pay for the accommodation and must recover the charge from the resident. These are significant financial disciplines. The starting-point is that residents must pay the full sum. They are to pay less only if they satisfy the local authority that they are unable to pay the whole amount. Moreover, all residents must pay something. Therefore, while Parliament has indeed placed on local authorities a duty to make appropriate and suitable arrangements for the provision of residential nursing care, it has also placed on them a duty, wherever appropriate, to recover the full cost of that service and, in all cases, to recover such lesser sum as the resident can pay. That is an important and distinctive feature of the legislative scheme and, while it is not for judges to second-guess Parliament's decision on such a matter of policy, this feature may readily be regarded as understandable if only because, by minimising the substantial cost to the local authority of providing this care in any given case, it maximises the number of cases in which, using the same resources provided by the taxpayer, a local authority can provide this valuable service.

[20] That policy would be undermined entirely, however, if people could deliberately dispose of their income and assets and so present themselves as being unable to pay more than a reduced sum. To prevent this, Regulation 17 treats a person as possessing income of which he has deprived himself for the purpose of decreasing the amount that he may be liable to pay for his accommodation and Regulation 25 entitles the local authority to treat him as possessing capital of which he has similarly deprived himself. These regulations are not, therefore, to be regarded as some kind of unfortunate excrescence on the otherwise attractive face of the community care legislation but as an inherent, and indeed essential, part of the scheme which Parliament has enacted: residential accommodation is to be provided but the residents are to pay the appropriate sum for it. That being so, if Parliament intends - as it does - that a person's resources should be relevant to a local authority's decision as to whether to provide residential accommodation, then those resources must include both notional income and notional capital. If that were not so, the only people whose resources would be taken into account in deciding whether to provide them with residential accommodation would be the public-spirited who chose to abstain from disposing of their income and capital. All their less scrupulous contemporaries would be able to steal a march on them. Similarly, the heirs of the public-spirited would inherit less than the heirs of the unscrupulous. Section 12(3B) shows that Parliament intends that this should not happen.

[21] At first sight, perhaps, the respondents' decision in the petitioner's case may seem both harsh and inconsistent with the aim of the legislation that the respondents should arrange appropriate care for her in her confused state. But I am satisfied that this is not so. Although the petitioner challenges the respondents' decision on the point - and I shall have to consider that challenge later - for present purposes it must be assumed that the respondents were entitled to be satisfied that the petitioner had deprived herself of her house for the purpose of decreasing the amount that she would be liable to pay for her accommodation. On that basis, in December 1998 and January 1999, the petitioner had actual capital of approximately £7,000 and notional capital of roughly £35,000 - £40,000, the value of the house. The house itself remained in the ownership of her sons to whom she had transferred it in 1995. So this is not a case where the transferred asset had been dissipated. The respondents' decision not to arrange for the provision of residential nursing care themselves and to insist that an arrangement - which they would facilitate - be made between the petitioner and the nursing home would have meant that the petitioner would have had to pay the full cost of that care herself. But, if the respondents had decided to arrange residential nursing care for the petitioner, then in accordance with Regulation 25 of the 1992 Regulations they would have been entitled to treat her as possessing the house and, therefore, to recover from her the (same) full cost of providing the accommodation. From the point of view of the petitioner's liability to pay, the impact of the two possible decisions was identical. From the respondents' point of view, however, the decisions could work differently, at least once the petitioner's actual capital was exhausted. If they did not themselves arrange the care, then they did not have to pay for it and try to recover the cost from the petitioner. While paying for the care and recovering the cost from the petitioner might not have been problematical for as long as she still had actual capital, it could well have been very problematical indeed once her actual capital was exhausted.

[22] Section 21 of the Health and Social Services and Social Security

Adjudications Act 1983

Counsel for the petitioner argued that this was not a legitimate consideration for the respondents to take into account. Parliament had enacted a limited system of protection for local authorities in Section 21 of the Health and Social Services and Social Security Adjudications Act 1983 ("the 1983 Act") and what the respondents were doing was in effect to seek to extend that protection beyond the limits laid down by Parliament.

[23] Section 21(1) of the 1983 Act provides:

"Subject to the following provisions of this section, where -

(a) a person avails himself of Part III accommodation; and

(b) that person knowingly and with the intention of avoiding

charges for the accommodation -

(i) has transferred any asset to which this section applies to

some other person or persons not more than six months before the date on which he begins to reside in such accommodation; or

(ii) transfers any such asset to some other person or persons

while residing in the accommodation; and

(c) either -

(i) the consideration for the transfer is less than the value

of the asset; or

(ii) there is no consideration for the transfer,

the person or persons to whom the asset is transferred by the person availing himself of the accommodation shall be liable to pay to the local authority providing the accommodation or arranging for its provision the difference between the amount assessed as due to be paid for the accommodation by the person availing himself of it and the amount which the local authority receive from him for it."

The provision applies only where a resident transfers the asset while he is living in the accommodation or during the period of six months before he begins to live there. It imposes on the transferee of the asset an obligation to pay the difference between the sum which the resident is required to pay and the sum which the local authority actually receive from him. In this case, of course, the petitioner transferred her house in 1995 and the authority were considering whether to arrange residential nursing care for her some three years later. So, Section 21 does not apply. Nor, since the enactment of Section 1 of the Family Law (Scotland) Act 1985, is there any obligation on the petitioner's sons to aliment her. Counsel for the petitioner argued that the respondents' decision was an attempt to evade the policy of Parliament as expressed in these statutes and in effect to put improper force on her sons to pay for her accommodation.

[24] I do not accept that submission. As Lord Philip held in Yule v. South Lanarkshire Council 1998 S.L.T. 490, the respondents were entitled to treat the house as notional capital of the petitioner even though she had transferred it three years before. In deciding as they did, the respondents' aim was not that the petitioner's sons should pay for the petitioner's accommodation but, rather, that she should not avoid paying the sum for her residential care which Parliament intended that a person in her position should pay. That is a legitimate aim and the respondents' decision was an appropriate method of trying to achieve it. As I have already noticed, their decision placed no greater financial liability on the petitioner than would have been involved in a decision to arrange residential nursing care for her. Moreover, any potential difficulty in the petitioner's position could easily have been resolved if the house had been sold and the proceeds made over to her. That - or an equivalent - was something which the respondents could properly expect the petitioner's sons to do, in order that she should be in a position to pay the appropriate sum for the care which she needed. Nor would her sons have any legitimate grievance if, to help their mother to pay her charges, they had to unscramble a transfer which had been designed to benefit them by defeating the charging scheme laid down by Parliament. If, on the other hand, the respondents were not entitled to decide as they did, they would in effect be forced to bear the cost of the residential nursing care for the petitioner without having the ability to secure themselves against any failure of the petitioner to reimburse them by making and recording a charging order over the house in terms of Section 23 of the 1983 Act. In these circumstances the respondents were, in my view, entitled to decide that the petitioner's needs in December 1998 and January 1999, when she had actual capital of approximately £7,000, did not call for them to arrange residential nursing care for her in terms of Section 13A and that they would not do so.

[25] Did the Respondents Apply the Correct Test?

The petitioner contends, however, that even if the respondents would have been entitled to decide in that way, they none the less erred in doing so in the present case because, in holding that the petitioner's house constituted notional capital in terms of Regulation 25 of the 1992 Regulations, the respondents had asked themselves the wrong question. In formulating this submission Mr. Sandison was careful to accept that there had been material before the respondents on which they could have reached the conclusion that the petitioner had disposed of her house for the purpose of decreasing the amount that she might be liable to pay for her accommodation. He also accepted that the decision on that matter had been for the respondents to take and that, unless it had been Wednesbury unreasonable, it would not be open to review by this court. Again, he made it clear that he was not suggesting that the respondents' decision had been unreasonable in that sense. He referred generally to the decision of the Extra Division in Yule v. South Lanarkshire Council 2000 S.L.T. 1249.

[26] In this case, when asked by the petitioner's agents to explain their decision, the respondents' Contracts Officer wrote in her letter of 8 December 1998 that they had carried out a search of the Register of Sasines which had shown that the petitioner had transferred her house to her sons in 1995 for love, favour and affection. The letter went on to say that, "as this was carried out for no consideration or legal obligation, the Council is entitled to include the value when assessing the petitioner's ability to pay for care costs in residential/nursing care". The respondents would therefore not enter into any funding arrangement until the petitioner's total assets, including notional capital, had been depleted to £16,000. Mr. Sandison said that this letter showed that the Council had indeed asked themselves the wrong question: they had thought that it was sufficient if the transfer had been gratuitous, whereas in fact they had to be satisfied that the petitioner had intended to decrease the amount that she might be liable to pay for her accommodation.

[27] The letter concluded by indicating that the writer would be happy to receive "any further documentation" and that she would discuss it with her colleagues in the respondents' Legal Service. This led the petitioner's agents to forward an affidavit by Mr. Gavin Robertson about the circumstances of the transfer. He indicated that the petitioner had transferred the house because she was being pestered by a wastrel brother who wanted to come to live with her. When the respondents' Legal Services Manager wrote on 22 January 1999, she said that the Head of Social Work had given full consideration to the affidavit by Mr. Robertson but "he is still not satisfied that the property was not transferred, at least in part, for the purposes of avoiding board charges." She added that, in particular, it did not appear to have been necessary for the petitioner to transfer the property to her family simply to prevent her brother from moving in with her. The Council's position, therefore, remained as stated in previous correspondence. Mr. Sandison argued that this letter also revealed a mistaken approach. The question was not whether it had been necessary for the petitioner to transfer the property to her sons to prevent her brother moving in with her, but whether she had transferred it for the purpose of decreasing the amount that she might be liable to pay for her accommodation. The letter also revealed that the Head of Social Work had proceeded on the basis that he was "not satisfied" that the property "was not transferred," in part at least, for the purpose of avoiding board charges. The real question was whether the respondents were satisfied that it had been transferred with that intention.

[28] Whatever might have been the position if we had had to consider only the two letters mentioned by Mr. Sandison, I consider that the matter becomes abundantly clear when an intervening letter from the respondents' Legal Services Manager, dated 8 January 1999, is considered. There she says:

"With regard to Mrs. Robertson's particular circumstances the Head of Social Work advises me that he established that the property had been transferred for no consideration in circumstances which he considers may have been done for the purposes o[f] reducing the board charges payable. If the client has an explanation for the transfer which he wishes the Council to consider this will be done as a matter of urgency. The Head of Social Work's position at present is that, on the basis of the information available to him it appears that the property was probably transferred at least in part for the purposes of reducing board charges. He will give full consideration to any representations to the contrary."

That passage shows that the Head of Social Work was indeed addressing the correct question. When he subsequently considered the affidavit supplied by Mr. Robertson, this did not alter the answer which he gave to that question. When the Head of Legal Services wrote on 22 January that the respondents' position remained as stated in previous correspondence, she was referring inter alia to her letter of 8 January. I am therefore satisfied that the respondents' officials did indeed address the correct question. It follows that their decision is not open to challenge on the basis advanced by counsel for the petitioner.

[29] Lack of a Valuation

Mr. Sandison also argued that the respondents' decision was unsound because they had never carried out a valuation carried out of the house in question and so had no basis for assuming that, even with her notional capital being taken into account, the petitioner's capital would exceed £16,000. For the respondents, Mr. Thomson indicated that this point had not been argued before the Lord Ordinary. In any event, the house fell into Band C for the purposes of council tax. Counsel for the petitioner did not challenge that. Moreover, as Mr. Thomson pointed out, the respondents had no power in these circumstances to carry out a valuation of property which they did not own. Finally, as he again pointed out, paragraph 6.012 of SWSG Circular 8/96 expressly recognised that a valuation was not always necessary. For the reasons given by Mr. Thomson I am satisfied that there is no merit whatever in this submission.

[30] Alleged Policy of not Considering Representations

Finally, counsel for the petitioner argued that the Lord Ordinary had been wrong to dismiss the petition. She should have ordered proof in respect of the petitioner's averment that, although the respondents claim to have fully considered the matters set out in Mr. Robertson's affidavit,

"[n]otwithstanding said claim, the petitioner believes and avers that the respondents operate a policy of improperly fettering the exercise of their decision-making process under Regulation 25, principally by having regard to whether or not the applicant for care can demonstrate, by documentary evidence, a prior obligation to execute the Disposition under examination. Said policy is unwarranted in law and its application prejudices and has prejudiced the assessment of the circumstances of the petitioner's Disposition."

Counsel for the respondents indicated that, in their recollection, the only point argued before the Lord Ordinary had been that, in this case, the respondents had approached the matter in that way and had in effect failed to take proper account of the affidavit. Be that as it may, I am satisfied that it would be wrong to order proof on the basis of this averment. The averment is merely that the petitioner "believes and avers" that the respondents operate the policy in question. According to our practice, such an averment is, of course, entirely proper but it must be accompanied by factual averments which the pleader offers to prove as the basis for the inference he seeks to draw. The accompanying factual averments are no mere formality which can be omitted in the more relaxed context of judicial review pleadings. On the contrary, they are a logically necessary precondition to such an inferential averment, which is manifestly irrelevant without them. Here counsel for the pursuer simply said that the petitioner would prove that this had been the experience of persons dealing with the respondents in other cases. Counsel did not specify which cases they had in mind. That is an insufficient basis for ordering proof, particularly in the face of the terms of the respondents' letters to the petitioner's agents which invited further submissions and indicated that they would be considered. I therefore reject this contention for the petitioner.

[31] Conclusion

For these reasons I am satisfied that the Lord Ordinary reached the correct conclusion and that the petition falls to be dismissed. I would accordingly refuse the reclaiming motion.

FIRST DIVISION, INNER HOUSE, COURT OF SESSION
Lord President Lord Bonomy Lord Weir	P5/14G/99 OPINION OF LORD BONOMY in RECLAIMING MOTION in the cause MARY ROBERTSON (A.P.) Petitioner; for JUDICIAL REVIEW OF DECISION OF FIFE COUNCIL DATED 8 DECEMBER 1998 and 22 JANUARY 1999 _______

 

 

Act.: Hajducki, Q.C., Sandison; Morison Bishop W.S.

Alt.: Bovey, Q.C., R. Thomson; Balfour & Manson W.S.

20 April 2001

[1] This case concerns the controversial subject of the provision of and payment for nursing home care for the elderly and infirm. The petitioner is a prime candidate for such care but the respondents have refused to provide it or to pay for its provision because they have assessed her as possessing such resources that she would be bound, on any view, to pay for that care in full. The bulk of these resources are no longer within the petitioner's control. In October 1995, before she needed care, the petitioner transferred the title to her main asset or resource, her home, to her three sons. When she applied to the respondents for the provision of, and payment for, nursing home care they decided that one significant reason for that disposal was to decrease the amount she might be liable to pay for that accommodation. They were thus entitled to include the capital value of the house in their assessment of her means, and on the basis of that assessment refused her application.

[2] The principal issue between the parties is whether the current statutory provisions entitled the respondents to refuse to provide or arrange for the provision of nursing home care on the strength of an assessment that took into account notional capital over which the petitioner had no legal control, or whether the respondents were bound to provide the care and their powers in relation to notional capital were limited to taking it into account in assessing the charges to be made to the petitioner and her liability for payment thereof.

[3] While this sensitive subject can give rise to heated social and political debate about the scope of the "Welfare State" and the extent to which it was expected to provide free care from the cradle to the grave, it is a basic inescapable feature of the provision of nursing home care that everyone in such care is required to either pay the full charge known as "the standard rate" or make a contribution towards it. That payment varies according to the means of the individual.

[4] Stewardship of the provision of nursing home care as a welfare service was transferred from central Government to local authorities by the National Health Service and Community Care Act 1990. Such provision is now a community care service provided under sections 12, 12A and 13A of the Social Work (Scotland) Act 1968. Section 87 of that Act sets out the general regime for charging for such services as follows:

"87(1)...a local authority providing a service under this Act...may recover such charge (if any) for it as they consider reasonable...

(3) Subject to the following provisions of this section, accommodation provided under this Act...shall be regarded as accommodation provided under Part III of the National Assistance Act 1948, and sections 22(2) to (8) and 26(2) to (4)...shall apply accordingly.

(4) In the application of the said section 22, for any reference to the Minister there shall be substituted a reference to the Secretary of State, and in the application of the said section 26, any reference to arrangements under a scheme for the provision of accommodation shall be construed as references to arrangements made by a local authority with a voluntary organisation or any other person or body for the provision of accommodation under this Act.

(5) The Secretary of State may, with the consent of the Treasury, make regulations for modifying or adjusting the rates at which payments under this section are made, where such a course appears to him to be justified, and any such regulations may provide for the waiving of any such payment in whole or in part in such circumstances as may be specified in the regulations."

Section 26(2) of the National Assistance Act 1948 envisages the local authority paying for accommodation and recovering "from each person for whom accommodation is provided under the arrangements the amount of the refund which he is liable to make in accordance with the following provisions of this section." The relevant following provisions are these:

"(3) Subject to subsection (3A) below a person for whom accommodation is provided under any such arrangements shall, in lieu of being liable to make payment therefor in accordance with section twenty-two of this Act, refund to the local authority any payments made in respect of him under the last foregoing subsection:

Provided that where a person for whom accommodation is provided, or proposed to be provided, under any such arrangements, satisfies the local authority that he is unable to make a refund at the full rate determined under that subsection, subsections (3) to (5) of section twenty-two of this Act shall, with the necessary modifications, apply as they apply where a person satisfies the local authority of his inability to pay at the standard rate as mentioned in the said subsection (3)."

Section 22(3) is the only part of section 22 of relevance for present purposes and is in these terms:

"(3) Where a person for whom accommodation in premises managed by any local authority is provided, or proposed to be provided, under this Part of this Act satisfies the local authority that he is unable to pay therefor at the standard rate, the authority shall assess his ability to pay and accordingly determine at what lower rate he shall be liable to pay for the accommodation:...".

Thus a scheme for charging and payment is well established. The question is not whether a person should pay for nursing home care but whether, on the strength of a financial assessment involving largely notional capital, the local authority can refuse to provide or make arrangements for the provision of such care for a person who is in need of such care.

[5] The transfer of responsibility for the provision of nursing home care in terms of the National Health Service and Community Care Act 1990 was effected by amending Part II of the Social Work (Scotland) Act 1968 and inserting a new section 13A headed "Residential Accommodation with Nursing". Part II of the 1968 Act is headed "Promotion of Social Welfare by Local Authorities". That Part of the 1968 Act includes a wide range of mainly duties, and some powers, many of them relating to the care of children and others dealing with a miscellany of care services as defined by section 5A(4). The general introductory terms of Part II are these:

"12(1) It shall be the duty of every local authority to promote social welfare by making available advice, guidance and assistance on such a scale as may be appropriate for their area, and in that behalf to make arrangements and to provide or secure the provision of such facilities (including the provision or arranging for the provision of residential and other establishments) as they may consider suitable and adequate...".

In relation to nursing home care, that general provision has to be read along with section 13A, introduced by the 1990 Act, in these terms:

"13A(1) Without prejudice to section 12 of this Act, a local authority shall make such arrangements as they consider appropriate and adequate for the provision of suitable residential accommodation where nursing is provided for persons who appear to them to be in need of such accommodation by reason of infirmity, age, illness or mental disorder, dependency on drugs or alcohol or being substantially handicapped by any deformity or disability.

(2) The arrangements made by virtue of subsection (1) above shall be made with a voluntary or other organisation or other person, being an organisation or person managing premises which are -

(a) a nursing home within the meaning of section 10(2)(a) of the Nursing

Homes Registration (Scotland) Act 1938... or

(b) a private hospital registered under section 12 of the Mental Health

(Scotland) Act 1984

for the provision of accommodation in those premises."

[6] Before us there was considerable debate about whether the combined effect of these provisions was that the local authority had a duty or merely a power to provide nursing home accommodation and care. Comparison with other sections in Part II of the 1968 Act does not provide much assistance in view of the unique wording of section 13A. In my opinion the combined effect of section 12(1) and section 13A is that a local authority is obliged to make arrangements which they consider appropriate and adequate for the provision of residential accommodation for those in their area falling into the categories of need set out in section 13A(1). In applying that general duty to a particular person in their area the local authority is then guided, as they are in relation to all communtiy care services, by section 12A(1) and must take the steps set out therein. That subsection is in these terms:

"12A(1) Subject to the provisions of this section, where it appears to a local authority that any person for whom they are under a duty or have a power to provide, or to secure the provision of, community care services may be in need of any such services, the authority -

(a) shall make an assessment of the needs of that person for those services;

and

(b) having regard to the results of that assessment, shall then decide

whether the needs of that person call for the provision of any such services."

Two separate things appear to be required, viz. an assessment of the needs of the person for the particular community care service in mind, and then a decision whether the needs of that person "call for" the provision of any such services having regard to the results of the assessment of the needs. So section 12A envisages the local authority making enquiries, establishing the facts and then deliberating upon the facts before any duty to make provision for that person can arise.

[7] However, the matter does not end there. The Community Care (Residential Accommodation) Act 1998 amended section 12, which is the general introductory provision of Part II of the 1968 Act, by inserting a new subsection (3A) in these terms:

"(3A) In determining for the purposes of this section whether to provide assistance by way of residential accommodation to a person, a local authority shall disregard so much of the person's capital as does not exceed the capital limit for the purposes of section 22 of the National Assistance Act 1948."

While this provision seems out of place in section 12 rather than section 12A, it is impossible to give any effective meaning to it unless it is regarded as pertaining to the investigation and deliberation provided for in section 12A(1). That amendment also included a new subsection (3B) which prescribes how capital is to be calculated as follows:

"(3B) For the purposes of subsection (3A) of this section -

(a) a person's capital shall be calculated in accordance with assessment

regulations in the same way as if he were a person for whom accommodation is proposed to be provided under this Act and his ability to pay falls to be assessed for the purposes of section 22(3) of the National Assistance Act 1948; and

(b) 'the capital limit for the purposes of section 22 of the National

Assistance Act 1948' means the amount for the time being prescribed in assessment regulations of the amount which a resident's capital (calculated in accordance with such regulations) must not exceed if he is to be assessed as unable to pay for his accommodation at the standard rate;

and in this subsection 'assessment regulations' means regulations made for the purposes of section 22(5) of the National Assistance Act 1948 or section 87(5) of this Act."

The relevant regulations are to be found in the National Assistance (Assessment of Resources) Regulations 1992. Regulation 20 provides that no resident shall be assessed as unable to pay for his accommodation at the standard rate if his capital exceeds £16,000. Regulation 25(1) provides that a resident may be treated as possessing actual capital of which he has deprived himself for the purpose of decreasing the amount that he may be liable to pay for his accommodation, subject to certain exceptions which do not apply to this case.

[8] It is plain from the Hansard reports of debates in both Houses on the 1998 Bill that subsection (3A) was designed to give legislative authority to a proposition recognised by the Court of Appeal in R. v. Sefton Metropolitan B.C., ex parte Help The Aged and Others [1997] 4 All E.R. 532 that capital resources below £16,000 must be left out of account in deciding whether nursing home accommodation and care should be provided. Whether the decision to add the new subsection (3A), and indeed the subsection's terms, were influenced by the somewhat different terms of the equivalent legislation for England and Wales, the fact remains that subsection (3A) applies to Scotland and is drawn in general terms which were applied to the regimes south and north of the border. By this amendment Parliament has plainly provided that capital below £16,000 shall be disregarded in the course of deciding whether to provide nursing home accommodation and care. That prohibition is necessary only because resources are relevant to the determination of that question. If they are so relevant, then the local authority are entitled to take resources in excess of £16,000 into account in deciding whether to provide that assistance.

[9] Before finalising my opinion I had the advantage of reading the Opinion of Lord Weir in draft. Having reflected long and hard on his carefully argued analysis, I remain unable to give practical content to section 12(3A) of the 1968 Act other than as a prohibition against considering capital below the £16,000 limit in the context of a scheme where capital above the limit is relevant to the determination. Were it otherwise, section 12(3A) would be in different terms stating that all capital should be disregarded in determining whether to provide nursing home care.

[10] I recognise that unfortunate practical consequences may result from our different interpretations of this legislation, and I wish now to consider the potential significance of these. There is of course no difference between us on the liability of the petitioner to pay for her care. If capital, particularly capital of which the applicant for care has deprived herself for the purpose of decreasing her liability to pay, cannot be taken into account before the determination whether to provide the care is made, then that is likely to render recovery of the charges which the authority is perfectly entitled to make impossible. In the present case the respondents would be entitled to charge the standard rate in view of the petitioner's total resources, including her notional capital. She has actual capital of about £7,000. They could recover partial payment from her income and the balance of the standard rate out of that capital until it was exhausted. Then there would be no effective means of recovering the balance between income and the standard rate. Sequestration was suggested by counsel for the petitioner as one possibility. However, sequestration would be pointless unless it resulted in the realisation of assets. Counsel suggested that the disposition of the house might be a gratuitous alienation which could be reduced, thus restoring the actual capital to the control of the petitioner. I consider that outcome to be highly unlikely in view of the provision of section 34(4)(a) of the Bankruptcy Scotland Act 1985 prohibiting the reduction of such a disposition if the debtor can establish that at the time of the disposition, or any time thereafter, her assets were greater than her liabilities. In any case where there is a delay between the disposition and the "debtor" in the position of the petitioner going into care her assets are likely to exceed her liabilities and thus rule out reduction of the disposition by that route. No other practical means of enforcement was suggested to us. I see this as an important and far reaching practical consequence of an interpretation other than the one I favour.

[11] It was urged upon us that the difficulty of enforcement had been foreseen and that Parliament had chosen to deal with that in a limited way under section 21 of the Health and Social Services and Social Security Adjudication Act 1983. That applies to a person who has moved into nursing home care or some other form of residential care and who in the immediately preceding six months knowingly, and with the intention of avoiding charges for the accommodation, had transferred an asset to another. The effect is that the beneficiary has to meet the shortfall between what the local authority calculate the liability of the person in care to be and the amount that person actually pays. Counsel for the petitioner submitted that that was the anti-avoidance provision designed to cope with the above practical consequence. Parliament had deliberately chosen to apply anti-avoidance measures only in respect of the six months immediately preceding the admission to care. The fact that the legislation predates community care by a number of years was immaterial since section 21 was not brought into effect until 1993, when the community care provisions were introduced. I readily acknowledge that this provision further compounds the very difficult question of interpretation posed in this case. However, the existence of this specific anti-avoidance measure is not inconsistent with an interpretation of the legislation that recognises the right of local authorities to take account of resources in deciding whether to make the provision of care. The regulations relating to the calculation of capital, the National Assistance (Assessment of Resources) Regulations, were made in 1992. The provision of the Health and Social Services and Social Security Adjudication Act under consideration, section 21, was passed in 1983, before the scheme presently under consideration was devised. Under the 1992 Regulations notional capital is actual capital of which the person "has deprived himself", which is a much wider concept than that of transferring assets to some other person or persons as provided for in the 1983 Act. In addition Regulation 25 applies to both a person who has taken up residence in care and one for whom accommodation is proposed to be provided. The 1992 Regulations also contain no provisions for enforcing payment against any other person. That is consistent with the much wider ambit of the Regulations. Section 21 of the 1983 Act fits into the overall scheme as a particular provision for enforcement of payment by a beneficiary in particular circumstances. It is thus not inconsistent with the notion that the local authority has a discretion to consider financial resources in arriving at a decision whether to provide accommodation.

[12] One possible undesirable consequence of my interpretation of the legislation is that a person who needs care is told that the local authority will not provide it or arrange for its provision and may not have within her control the resources necessary to make immediate provision for herself. While counsel for the respondents were not willing to state in clear terms what the future would hold for the petitioner should her petition fail, there are a number of possibilities. The most likely outcome is that arrangements will be made by her son, who has power of attorney, and thus control over her actual resources, and who is one of the three beneficiaries of the disposition, to secure a nursing home place for which direct payment would be made. It is important not to lose sight of the basic reason for the problem in this case, which is the respondents' finding that the disposition was for the purpose of decreasing the amount that the petitioner would have to pay. In the event that that objective is not realised, it is difficult to envisage the petitioner's sons not using the capital which they have gained to make provision for her care, even in this modern age when there is no obligation on a son to provide financial support for his mother. In the event that that were not to happen, then the petitioner might be admitted to hospital, depending on her condition at the time that decision has to be made. It is also plain from the circumstances of this case that local authorities can take interim measures which they call "respite care" where circumstances demand that. I, therefore, do not envisage any possibility of the petitioner being turned out into the street. I do, however, acknowledge that the practical consequence of my interpretation could well be that she is cared for in conditions which are not the most desirable for her personally.

[13] It was also urged upon us for the petitioner that the discretion which the respondents argued for was inconsistent with the guidance issued by the Government to local authorities. These guidelines were issued under powers contained in section 5(1) of the 1968 Act. They run in the name of the Social Work Services Group of the Scottish Office. Reliance was placed on two. The first is Circular: SWSG11/91 issued in June 1991 in light of the enactment of the National Health Service and Community Care Act 1990 introducing the new section 12A into the 1968 Act. It relates to the provision of community care services in general. I confine my consideration of them purely to the context of nursing home care. As counsel for the petitioner quite rightly pointed out, the circular emphasises the importance of determining and catering for "need". The guidance given stresses that any assessment system set up by local authorities should examine the needs of the individual for any form of care or support and not for particular services. Local authorities are encouraged to look at the particular needs of the individual. In relation to "Charges for Services" paragraph 11 announces that separate guidance will be issued in due course on the powers and duties of local authorities to charge for social work services (including community care services), but then continues as follows:

"The underlying principle will be that local authorities should institute arrangements for users of services of all types to pay what they can reasonably afford towards their costs. But the provision of services, whether or not the local authority is under a statutory duty to make provision, should not be related to the ability of the user or their families to meet the costs. The assessment of financial means should, therefore, follow the assessment of need and decisions about service provision."

That paragraph could be read as guidance that financial resources are not relevant to the determination whether to provide care in an individual case. Such an interpretation would be inconsistent in my opinion with the current legislative provisions, including the 1998 amendment to section 12(1) of the 1968 Act. However, I do not read the guidance note in that way. It is important to set it in a practical context. A person who is not eligible for financial support for the provision of nursing home care is unlikely to apply to the local authority to arrange for its provision. The guidance note should be read as dealing with the normal situation where an entitlement to financial assistance is likely to arise. The emphasis on assessment being "needs-led" serves to stress that the level of financial support involved should have no bearing on the assessment of needs and the determination of the care to be provided.

[14] The other guidance relied on was Circular No: SWSG8/96 issued in March 1996. That provided guidance on the National Assistance (Assessment of Resources) Amendment Regulations 1996 and the National Assistance (Sums for Personal Requirements) Regulations 1996 as they amended the 1992 Regulations. The part particularly relied upon was at para. 6.066 in these terms:

"6.066 If the local authority decides that the resident has disposed of capital in order to avoid a charge or to reduce the charge payable, the local authority will need to decide whether to treat the resident as having the capital (notional capital) and assess the charge payable accordingly; and then whether:

(a) it is realistic to recover the assessed charge from the resident (bearing

in mind that they may not have the means to pay the debt which will be accruing); or

(b) if the asset was transferred not more than six months before the date

the resident begins to live in residential accommodation, or while the resident is living in the accommodation, to use the provisions of section 21 of the Health and Social Services and Social Security Adjudication Act 1983 to transfer the liability to the recipient of the asset for that part of the charges assessed as a result of the notional capital."

That guidance and the rest of the circular relate to assessment of resources for charging purposes and do not in my opinion have any bearing on this issue. The circular deals with the situation where care is being or is to be provided.

[15] I do not, therefore, see either guidance note as undermining my interpretation of the legislation.

[16] The stage at which resources ought to be taken into account was the subject of discussion before us. It is not necessary for the purposes of deciding this case to determine the stage exactly. In my opinion resources do not arise in relation to the assessment under section 12A(1)(a), i.e. the assessment of the needs of the person for nursing home care. The question remains whether they come in to the question under section 12A(1)(b), whether the needs of the person "call for" the provision of such services, or, as was submitted by counsel for the respondents, at a later stage. In my opinion the expression "call for" is broad enough to encompass as a factor to be taken into account the availability of resources whereby the provision might be made other than by the local authority. On the other hand, if I am wrong about that, and if section 12A(1)(b) is confined to the question whether the needs of the person call, in the nursing sense, for the provision of nursing care, then it follows that, if the answer to that question is in the affirmative, the local authority must then consider the question whether they should provide or arrange for the provision of the care in the light of all relevant factors, including the person's resources.

[17] Recognising the possibility that the court would decide that the respondents were entitled to take account of financial resources, counsel for the petitioner submitted in the alternative that the respondents erred in the way in which they took the petitioner's resources into account by having regard to capital which was no longer within her control and which she could not compel the current possessors to return to her control. Section 12(3A) enjoined the local authority to disregard capital not exceeding the capital limit for the purposes of section 22 of the 1948 Act. In section 22(3) reference was made both to the person satisfying the local authority that she was "unable to pay...at the standard rate" and the authority assessing her "ability to pay"; and in the 1992 Regulations, which had to be given effect to in assessing a person's ability to pay, while the authority had to take "capital" into account, in calculating that capital it was plain from Regulation 25 that it was a matter of discretion whether they took account of notional capital. Against that background the respondents had plainly erred in having regard to a house, the title to which was held by others. The basic policy of Part II of the 1968 Act of promoting social welfare was undermined by that approach. I reject that argument for the simple reason that the entitlement of the respondents to take account of capital is part of a coherent scheme to ensure that those who are in a position to pay the full charge for care do so and those who require assistance get it. To make that system work for the greater good of all, Parliament plainly considered it appropriate to give local authorities the power to take account of capital that potential "clients" of the care system consciously deprived themselves of. To say that financial resources may be taken into account in deciding whether or not to provide care, but to limit that consideration to the resources actually available at the time that determination is made, is inconsistent with the proper interpretation of the legislation and with the overall purpose of the scheme. That purpose is, in my opinion, entirely consistent with the welfare principle of Part II of the 1968 Act.

[18] In the event I have reached the same conclusion as your Lordship in the chair in relation to both branches of the first ground of appeal, the main issue of principle raised by this reclaiming motion. I also agree with the views of your Lordship in the chair on each of the other grounds of appeal and have nothing to add in relation to them. I am accordingly for refusing the appeal and adhering to the interlocutor of the Lord Ordinary.

FIRST DIVISION, INNER HOUSE, COURT OF SESSION
Lord President Lord Bonomy Lord Weir	P5/14G/99 OPINION OF LORD WEIR in RECLAIMING MOTION in the cause MARY ROBERTSON (A.P.) Petitioner; for JUDICIAL REVIEW OF DECISION OF FIFE COUNCIL DATED 8 DECEMBER 1998 and 22 JANUARY 1999 _______

 

 

Act.: Hajducki, Q.C., Sandison; Morison Bishop W.S.

Alt.: Bovey, Q.C., R. Thomson; Balfour & Manson W.S.

20 April 2001

[1] The illuminating analysis by your Lordship in the Chair of the complicacy of statutory provisions concerning residential accommodation with nursing care and its funding makes it unnecessary for me to attempt the same. Having studied these provisions and differing from your Lordships I have come to the conclusion that the respondents were not entitled to refuse to provide funding for the care needed by the petitioner and, therefore, that the reclaiming motion should be allowed.

[2] It is important to keep in mind that the duty under section 13A of the Social Work (Scotland) Act 1968, as amended, to provide such accommodation is set within the overall framework of Part II of the Act which is concerned with the promotion generally of social welfare by local authorities. Section 12 requires local authorities to make the appropriate arrangements. I do not consider that this section should be viewed as an abstract aspiration. To have meaning the promotion of social welfare must related to individuals who may need it in various forms. Accordingly, in my view, where such need is established I do not accept the submission of counsel for the respondents that a local authority has a general discretion to grant or withhold the provision of a particular service or services.

[3] From a study of the Act and the related regulations it is clear to me that the provision of welfare facilities, including that of residential care with nursing, is not to be met exclusively out of public funds. The recipient must make a contribution according to his ability to pay. But leaving aside section 12(3A) for the moment, I can find nothing in the way the scheme is framed to suggest that if need is established, a decision whether or not to make the provision requested is governed by the result of any assessment of an individual's means under the National Assistance (Assessment of Resources) Regulations 1992. It is highly relevant in my view to discover that the Secretary of State was of the same opinion as expressed in Circular 11/91 issued by the Social Work Services Group of the Scottish Office. Any assessment of a person's needs for community care services is to be "needs-led, not services-led" and the conclusion is that the "assessment of financial means should, therefore follow (my emphasis) the assessment of need and decisions about service provision." Local authorities are bound to pay heed to such guidance (R. v. London Borough of Islington ex parte Rixon 1997 ELR 66 at page 71). While the terms of a guidance circular cannot determine the proper statutory construction by the court, its terms are instructive as confirming the view that the statutory scheme connected with the promotion of social welfare envisages assessment of needs and ability to pay as two distinct and separate stages. The error into which the respondents have fallen is to intermingle these two processes.

[4] Upon that analysis when the respondents came to consider the petitioner's request for residential accommodation with nursing, they had first of all to follow the path prescribed by section 12A, read along with section 13A of the Act. They had to make an assessment of her needs and then decide whether the assessed needs called for the provision of the service she was seeking. If the respondents had done that (and it appears that they did) they would have discovered what is not in dispute that by reason of her confused mental state and her loss of memory she required full-time residential care. In my opinion they were then under a duty to make arrangements for the provision of suitable accommodation. Instead what they appear to have done is to have reached the view that having regard to the petitioner's means, including her capital actual and "notional" her "needs" did not call for the provision of any such service. It was explained to us that this was a practice which the respondents follow in their area, although it is not invariably applied.

[5] In my judgment the respondents were not entitled to reach a decision to refuse the petitioner's request in this way. It was submitted that it was proper to look beyond the "needs" as set out in section 13A, that is to say "infirmity, age, illness or mental disorder" and the like. In argument by way of illustration we were asked to consider the case of a wealthy lady. Surely, it was said, she could afford to make her own arrangements. If so her "needs" did not call for local authority provision. This proposition, so put, is not unattractive but I do not consider that it will serve. No doubt such people may make arrangements of their own choosing without reference to the local authority. But if the hypothetical wealthy lady seeks the community care service under the Act she is entitled to it if the needs specified in section 13A are made out. She can then pay for them in the manner prescribed by the regulations. I am of opinion that consideration of means does not enter the assessment of needs process because, apart from section 12(3A), there is nothing in the wording of the provisions to suggest that it does. If, contrary to my view, it is legitimate to have regard to a person's means in reaching a decision under 12A(1)(b), in this case the respondents in my view were still not entitled to refuse the petitioner's application. Her financial means in fact amounted to about £7,000, that is to say well below the figure at which she would be deemed to be able to pay for her accommodation at the standard rate in terms of Regulation 20 of the 1992 Regulations. The fact that she had gifted her house to her children several years before is irrelevant to the exercise which the respondents considered that they were entitled to carry out in applying section 12A.

[6] I turn to the question of the relevance of section 12(3A) to the respondents' decision. The local authority is enjoined to disregard so much of a person's capital as does not exceed the prescribed capital limit in terms of the payment provisions of the National Assistance Act 1948 and they are to do so in "determining for the purpose of this section (my emphasis) whether to provide assistance by way of residential accommodation to a person". The Lord Ordinary founded upon this provision as demonstrating that at the stage of deciding whether to provide assistance the local authority are to have regard to means and this conferred on them a discretion to grant or refuse an application. At first sight, taking the literal meaning of these words, this would appear to be the case but in my opinion there are compelling reasons for concluding that this was not the intention of Parliament and that these words should not be given effect.

[7] The subsection does not appear, as one might expect, among the provisions dealing with payment for services. It is inserted in the opening section of Part II of the Act of 1968 which is headed "General". This section is concerned with the promotion of general welfare services and mystifies me why the subsection, which is concerned with a matter of detail, should be placed uniquely here. It has nothing to do with "the purpose of the section". Furthermore, the subsection is at variance with the clear guidance about the operation of the scheme to which I have already referred and indeed with the whole tenor of these provisions which deal, firstly, with the assessment of needs and secondly and separately with those dealing with the assessment of liability to pay for services. In view of this incongruity, I consider it legitimate to look at the history of the enactment of section 12(3A) in order to discover what must have been the intention of Parliament. In this connection I need not repeat what has been narrated in detail by your Lordship in the Chair about why the Private Member's Bill came to be enacted but it is quite clear that it arose out of a situation totally removed from the one which we are considering and was not intended to change the existing law. It is evident that this provision was inserted clumsily and carelessly in a part of the Act where it did not properly belong. In any event, I do not construe its terms as a requirement to take capital into account but rather as an instruction to refrain from doing so in a certain context.

[8] For these reasons I am unable to construe section 12(3A) as effecting what amounts to a radical alteration of a long-standing scheme whereby assessment of needs is kept separate from assessment of liability to pay.

[9] In concluding that the petitioner is entitled to enjoy residential nursing accommodation I am not unaware that her liability to pay would be much less than it would have been had she not gifted her house to her children a few years earlier. I do not wish to appear to censure the petitioner for her action because there is a dispute in fact as to the reason behind the conveyance of the house in 1995. At the same time I can well understand that the local authority feel that they have grounds for viewing this step as being not unrelated to the prospect of residential care in the future. It was urged upon us that a decision in favour of the petitioner would "open the flood gates" and would act as an incentive to others to take similar steps to reduce the extent of their potential liability to pay for residential accommodation with a consequent increased burden on the local authority. The suggestion is made that the petitioner's family had some kind of moral obligation now to sell the property and pay the proceeds back to the petitioner and that thereafter the petitioner would be entitled to be accommodated by the respondents. That is one point of view but nothing is known about the practical consequences to the family. The fact is that the only powers of recourse which the respondents have under the statute regulations are limited and in the circumstances of this case are not apt to compel the family to take this course of action.

[10] So the position is that the petitioner who needs this care has been refused residential accommodation. If the respondents' position is justifiable as a matter of law the petitioner faces a bleak future. A person suffering from Alzheimer's disease obviously cannot be turned out into the streets. She cannot afford accommodation from her own remaining resources and we were informed that ultimately the local authority would have to make arrangements for her to be accommodated inappropriately in a hospital run by the National Health Service.

[11] I mention all these matters in order to demonstrate that the decision in this case, either way, will lead to undesirable results. But I do not consider that the construction of the statutory provisions can or should be influenced by these considerations. It is unsatisfactory that those seeking social welfare services should be able in certain cases to off-load the burden of paying by divesting themselves of their resources, but it is for the legislature to take such steps as are thought appropriate to strengthen the powers of local authorities to prevent this type of action.