REF/2005/1677
 
ADJUDICATOR TO HER MAJESTY’S LAND REGISTRY
LAND REGISTRATION ACT 2002

IN THE MATTER OF A REFERENCE FROM HM LAND REGISTRY

BETWEEN
  SURREY COUNTY COUNCIL

 APPLICANT

and

BARBARA PHYLLIS ADELAIDE BURT

RESPONDENT

Property Address: Lye End Cottage, St. John’s Village, Surrey GU21 7SW
Title Number: SY372076
 
Before: Mr. Michael Mark sitting as Deputy Adjudicator to HM Land Registry

Sitting at:  Victory House
On: 13 September 2010

Applicant Representation:  Fiona Burt, joint attorney under an enduring power of attorney
Respondent Representation:  Solicitor
___________________________________________________________________________

DECISION

 A local authority which has provided accommodation under section 21 of the National Assistance Act 1948, following the refusal of the Primary Care Trust to provide care and accommodation, and has properly declared a charge over the property of the person for whom accommodation has been provided is entitled to have that charge registered at the Land Registry notwithstanding that there is an outstanding appeal against the decision of the Primary Care Trust which, if successful, could result in the sums in question being reimbursed to the local authority by that Trust.

1.	For the reasons set out below I shall direct the Chief Land Registrar to giving effect to the application of the Applicant to register its charge over the property dated 26 November 2004. 

2.	The Respondent, Mrs Burt, was born in 1925. She suffered a traumatic brain injury following a car accident in 2000. Subsequently in 2000 she was assessed by the North Surrey Primary Care Trust as not meeting its local eligibility criteria for continuing care. That remained the case, as I understand it, until 2005, since when the Primary Care Trust has been providing care.

3.	Mrs Burt was not well enough to return home, and needed accommodation. The Applicant provided that accommodation until 2005. It purported to do so under section 21 of the National Assistance Act 1948 (“the 1948 Act”). Mrs Burt’s attorneys, her two daughters, considered that the Primary Care Trust had wrongfully refused to provide care and accommodation for Mrs Burt, and appealed its decision. That appeal procedure has been ongoing ever since, and has still not been resolved. It is hoped that the outcome will be known this year, and if it is unsuccessful, the attorneys are planning an appeal to the appropriate ombudsman.

4.	Section 21(1) of the 1948 Act empowers, and in some cases requires, a local authority to make arrangements for providing residential accommodation for persons aged 18 years or over who by reason of age, illness, disability or any other circumstances are in need of care and attention which is not otherwise available to them.

5.	When care is provided by the Primary Care Trust, it is free of charge. When accommodation is provided under section 21 of the 1948 Act, the local authority providing such accommodation or paying for it has a right to recover all or part of the cost of the accommodation following an assessment of the amount which the person to whom the accommodation is provided is liable to contribute. 

6.	Section 22(1) of the Health and Social Services and Social Security Adjudications Act 1983 (“the 1983 Act”) provides that

i.	“Subject to subsection (2) below, where a person who avails himself of Part III accommodation provided by a local authority in England, Wales or Scotland-

ii.	fails to pay any sum assessed as due to be paid by him for the accommodation; and
iii.	has a beneficial interest in land in England and Wales,

iv.	the local authority may create a charge in their favour on his interest in the land.

7.	“Part III accommodation” is defined by section 21(8) of the 1983 Act in relation to England and Wales as accommodation provided under sections 21 to 26 of the National Assistance Act 1948 (“the 1948 Act”).  

8.	Subsection (4) of section 22 of the 1983 Act provides that subject to subsection (5), which limits the effect of the charge when it is over the interest of an equitable joint tenant in land, the charge should be in respect of any amount assessed as being due to be paid which is outstanding from time to time.  By subsection (8), in the case of registered land, except where the charge was on the interest of an equitable joint tenant, the charge was to be a registrable charge taking effect as a charge by way of legal mortgage.

9.	If Mrs Burt was provided with accommodation under section 21 of the 1948 Act, under section 22(1) of that Act, subject to section 26 of that Act, the Council was to recover from Mrs Burt “the amount of the payment which he is liable to make in accordance with the following provisions of this section.”  Section 22 continues:

i.	“(2) Subject to the following provisions of this section, the payment which a person is liable to make for any such accommodation shall be in accordance with a standard rate fixed for that accommodation by the authority managing the premises in which it is provided and that standard rate shall represent the full cost to the authority of providing that accommodation.
ii.	(3) Where a person for whom accommodation in premises managed by any local authority is 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”.

10.	There follow in section 22(4)-(5A) provisions stating how a person’s ability to pay is to be ascertained.

11.	Section 26(1) of the 1948 Act provides that a local authority may make arrangements with others for the provision of accommodation.  That happened in the present case.  Section 26(2) provides that such arrangements shall provide for the local authority to pay the other party for providing the accommodation at such rates as may be determined by or under the arrangements and “the local authority shall recover 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.”

12.	There is no dispute in the present case that, if the accommodation was provided under section 21 of the 1948 Act, there has been an assessment, the money due under the assessment has been demanded, and there has been a failure to pay. The issue which has arisen is that it has been said that the decision of the Applicant to provide accommodation was unlawful because the condition of Mrs Burt was such that care ought to have been provided, with accommodation, by the Primary Care Trust.

13.	This case was originally due to be heard by the Adjudicator in December 2006, but these proceedings were stayed shortly before the hearing after Mrs Burt commenced judicial review proceedings in the High Court against the Applicant. In those proceedings it was submitted, in paragraphs 17-20 of the statement of case, that the decision by the Primary Care Trust could not be the end of the matter; that even if it had decided not to fund a placement as continuing care, the Applicant was only able to provide the service pursuant to section 21 of the 1948 Act if the accommodation came within the limited ambit of section 21; that the Applicant had failed to make the appropriate assessment; and that in the light of that failure, the Applicant had unlawfully charged Mrs Burt before it had determined its duties and satisfied itself that it was providing a service under its powers in section 21.

14.	Before there could be a hearing of these judicial review proceedings, the Court of Appeal gave judgment in the case of St Helen's Borough Council v Manchester Primary Care Trust, [2008] EWCA Civ 931. In that case, there was a dispute between the council and the Primary Care Trust as to which of them should provide for the needs of a disabled person. The Court of Appeal decided that the Primary Care Trust was the primary decision maker, and that the local authority could not challenge its decision so as to call on the court itself to adjudicate as to who was to provide the accommodation and care.  In the light of that decision it was conceded on behalf of Mrs Burt that her application for judicial review against the Applicant must fail and by consent the application for judicial review was withdrawn by order of 22 May 2009, with no order as to costs between the parties.

15.	Following that order, the stay on these proceedings ceased to have effect, and the Applicant wished to complete the registration of the charge which it had declared. It appeared to me that it had been conceded that the provision of accommodation for Mrs Burt was lawful under section 21 of the 1948 Act. I therefore caused a notice to be sent to the parties indicating an intention to direct the Chief Land Registrar to give effect to the application of the Applicant to register its charge. An objection to this course was raised on behalf of Mrs Burt, and as a result a hearing was held on 13 September, when Mrs Burt was represented by her daughter and attorney, Fiona Burt. 

16.	While she did still appear to feel that the Applicant had acted unlawfully, her essential concern was to ensure that her mother would not be out of pocket if, as she believed would be the case, she were ultimately to be successful in her appeal against the decision of the Primary Care Trust, or in a subsequent complaint to the ombudsman. The attorneys also wished either to adapt the property so that their mother could return to live there, which would require expenditure on their part that they could already ill afford, or to have sufficient funds from its sale to be able to afford to buy and adapt a new property for her. It further appeared that the attorneys, or their mother before her injury, had obtained money by way of equity release on the property, and that the amount due to the insurance company that had provided the advance was rapidly increasing due to interest, reducing the amount of equity that could be available to the attorneys on a sale of the property.

17.	I am satisfied, quite apart from the concession on the judicial review, that the Applicant acted properly in accordance with section 21 of the 1948 Act in providing accommodation for Mrs Burt once the Primary Care Trust had held that it was not responsible. Indeed, it could have been subject to criticism if it failed to provide such accommodation, leaving Mrs Burt without the provision that she plainly required.

18.	The result is that as the Applicant did not act unlawfully, but acted in accordance with section 21, it was entitled to assess Mrs Burt's liability to contribute, and having made the assessment to demand payment. There having been a failure to pay, the Applicant was entitled to declare the charge as it did. As the charge is a lawful charge, the Applicant is entitled to register it at the Land Registry.

19.	If Mrs Burt is successful on her appeal in respect of the Primary Care Trust’s decision, then it is my understanding, and the Applicant has confirmed that it is its understanding, that the Primary Care Trust will reimburse the Applicant for the cost of the accommodation that it provided which should have been provided by the Primary Care Trust, with the result that the liability of Mrs Burt will be reduced or extinguished. If it is reduced, the charge would only cover that reduced liability, and if it is extinguished there will be nothing owing under the charge which can then be removed from the register. If the charge should have been enforced by that date, then anything paid by the Primary Care Trust will go to Mrs Burt to reimburse her.

20.	It also appears to me that, on a consideration of the financial position put forward on behalf of Mrs Burt, the argument advanced on her behalf that these issues should await the outcome of the appeal from the decision of the Primary Care Trust and any application to the ombudsman is unlikely to be in Mrs Burt's best interests. The financial position as I understand it is that the property is worth in the region of £250,000, and that the equity release charge liability currently stands at about £137,000 with interest, and continues to mount at a significant rate. There is a real danger that if interest continues to mount the remaining equity in the property will be eaten up, and there will be little or nothing left for Mrs Burt. On that basis, there would appear to be a good argument for an early sale of the property. But until the matter is resolved, the effect of the Applicant’s application is that the property cannot be sold at least without providing for the Applicant’s claim.  Regardless of these considerations, however, for the reasons already given the Applicant is entitled to have its charge registered.

Costs
21.	The Applicant has sought an order for its costs. The normal rule is that the successful party is entitled to its costs. However, it appears to me that this application and the judicial review proceedings all relate to the same questions, and the judicial review proceedings were settled on the basis that there was to be no order as to costs in those proceedings. It also appears to me that Mrs Burt and her attorneys have been caught up in an unfortunate legal situation which was only resolved by the decision of the Court of Appeal to which I have referred. If it was reasonable to agree that there should be no order for costs in relation to the judicial review proceedings, I find it difficult to see why it should not be reasonable to come to a similar agreement in respect of these proceedings. In addition, I note what was said on behalf of Mrs Burt as to the desire of the attorneys to adapt either the property or some other property to enable Mrs Burt to return to live there. That requires finance, and given the limited finance available, it could be that the ability to enable her to return home, thereby saving considerable public funds, could be reduced if an order for costs has to be met.

22.	I would therefore urge the Applicant to reconsider whether it wishes to pursue an application for costs at all. Meanwhile, as directed at the hearing, Mrs Burt, through her attorneys, are to make their submissions in writing both as to whether Mrs Burt should be liable for costs and as to the reasonableness of the sums claimed in the Applicant's schedule of costs, to be served on the Adjudicator and on the Applicant by 4 October 2010.  The Applicant is to reply to those submissions by 18 October 2010, indicating at the same time whether it wishes to pursue its application.

Dated this 16th day of September 2010

By Order of The Adjudicator to HM Land Registry