REF/2010/756

ADJUDICATOR TO HER MAJESTY’S LAND REGISTRY
LAND REGISTRATION ACT 2002

IN THE MATTER OF A REFERENCE FROM HM LAND REGISTRY

BETWEEN
KENT COUNTY COUNCIL

 APPLICANT

and

JENNY FREMLIN

RESPONDENT

Property Address: 27 Holborough Road Snodland Kent ME6 5PA
Title Number: K410845
 
Before: Mr. Michael Mark sitting as Deputy Adjudicator to HM Land Registry

Sitting at:  Victory House
On: 7 January 2011

Applicant Representation:  Mr Patrick Rolfe, counsel
Respondent Representation:  Ms Fiona Scolding, counsel
___________________________________________________________________________

DECISION

Where an objection is made to the Chief Land Registrar under section73 of the Land Registration Act 2002 by somebody who would not be an appropriate party in respect of the dispute if there were court proceedings, the Adjudicator has a discretion how to proceed taking into account the overriding objective set out in rule 3 of the Adjudicator to Her Majesty’s Land Registry (Practice and Procedure) Rules 2003.  In a clear case that may involve directing the Chief Land Registrar to give effect to or to cancel the referred application.  In other cases it may involve the substitution or addition of an appropriate Respondent.  It is not appropriate to conduct lengthy judicial proceedings between A and B, when the issues raised are in fact only between A and C, and a decision between A and B will not bind either A or C as against the other of them.

In the present case, even on the basis that there is an arguable case as regards the amount of, and validity of an assessment made by the Applicant under section 21 of the National Assistance Act 1948, this does not invalidate the charge declared by the Applicant under section 22 of the Health and Social Services and Social Security Act 1983 as a result of that party’s failure to pay any sum assessed as due under section 21 of the National Assistance Act 1948.  Accordingly, it is not appropriate to add the person whose land is the subject of the charge  as a Respondent, in the absence of any attempt by her to challenge the charge.   

Given the age and state of health of that person, and the problems that would be caused by joining her, together with other matters referred to in the decision, on the arguments to date she should not be joined even if there was a serious issue to be tried as to the validity of the charge, as a decision that it should be registered will not prevent a subsequent challenge to it by her personal representatives, and there is no suggestion that there will be any need to deal with the property in the meantime.  

Derbyshire v Akrill [2005] EWCA Civ 308 and Rhondda Cynon Taff v Watkins [2003] EWCA Civ 129 considered.

1.	 Mrs. Catherine Thompson is 101 years old.  Since 1 September 2008 she has lived in a residential care home.  This accommodation was arranged by the Applicant (the Council) pursuant to its duty under section 21 of the National Assistance Act 1948.  The Council has been paying for this accommodation.  It has sought to assess the contribution payable under that Act by Mrs. Thompson.  In broad terms, such an assessment is carried out by reference to the available income and capital of Mrs. Thompson.  For the first 12 weeks of her stay she was assessed by reference only to her income.  On this basis she was found to be liable to contribute £103.80 per week.  She also had some capital, principally her home at 27 Holborough Road, Snodland (“the house”), of which she was the registered proprietor together with her deceased sister, and to which she was wholly beneficially entitled.

2.	The Respondent, Ms Fremlin, is the daughter of Mrs. Thompson, and is over 60 years old.  The National Assistance (Assessment of Resources) Regulations 1992, which sets out how Mrs. Thompson’s liability to contribute is to be calculated.  During the first 12 weeks period the house had to be, and was, disregarded in arriving at the weekly contribution of £103.80.  Normally, after the end of that period the value of the house will be taken into account.  However, there are exceptions.  One of these, pursuant to paragraph 2(b)(ii) of Schedule 4 to those Regulations, is where it is occupied in whole or in part as their home by the resident’s other family member or relative who is aged over 60 or is incapacitated.

3.	There has been a dispute between the Council and Ms Fremlin.  Ms Fremlin has asserted that she has lived in the house as her home since 2004.  The Council considered and rejected this claim and assessed Mrs. Thompson’s contribution from the end of the 12 weeks period at £445.28 per week.  That assessment is said to have been made in February 2009 following an investigation of Ms Fremlin’s claim to be occupying the house as her home, details of which are set out in the Council’s Statement of Case.

4.	Although Ms Fremlin appears to have continued to dispute the decision of the council, there is no mechanism for an appeal from its decision to an independent tribunal, and no attempt has been made to bring judicial review proceedings in respect of it.  

5.	Nothing was paid at all by Mrs. Thompson in respect of the sums assessed, although it is plain that payment has been sought.  There has not even been a payment of the sums assessed in respect of the first 12 weeks.  As a result, by a declaration dated 8 March 2010, the Council exercised, or purported to exercise, its powers under the Health and Social Services and Social Security Act 1983 (“the 1983 Act”) and declared a charge in its favour over the house.  It then sought, on 11 March 2010, to register the charge at HM Land Registry.  Ms Fremlin, through her solicitors, objected to the charge being registered.  The objection was in her own name and not on behalf of Mrs. Thompson.  The objection was that Ms Fremlin was resident at the house and that it should therefore have been disregarded by the Council in determining Mrs. Thompson’s liability.  Some evidence of this was provided by the solicitors, although part of this evidence was clearly dated well after the date of the assessment.

6.	The matter was then referred by the Chief Land Registrar to the Adjudicator on 9 July 2010, and Statements of Case were served on both sides.  Ms Fremlin’s Statement of Case admitted a significant number of the facts alleged by the Council, and gave further information.  These admissions and additional facts included the following:

(1)	Council tax had not been paid in respect of the house since 1 September 2008 and was treated by the local council as exempt as the sole occupant was in permanent residential care.  Prior to this a single person’s discount of 25% was claimed by Mrs. Thompson.  I would add that it was confirmed at the hearing before me that this claim and a claim for an additional payment in respect of Mrs. Thompson’s award of severe disablement benefit on the ground that she lived alone, had been made on Mrs. Thompson’s behalf by Ms Fremlin.  I was told by counsel at the hearing that in doing so Ms Fremlin had thought that as carer she did not count for this purpose.  It was not suggested, however, that that explanation had ever been offered to either Council.  Ms Fremlin also stated in her Statement of Case that she believed that as her mother’s carer she did not have to pay council tax.
(2)	The local council had informed the Council that Ms Fremlin had not been registered at the property in 2006, 2007 and 2008.  This had been communicated to Ms Fremlin, together with the information as to the claiming of the discount in respect of council tax by letter dated 3 October 2008.
(3)	Ms Fremlin was not on the electoral roll as living at that address.
(4)	Ms Fremlin had a partner and a flat in London, which she owned, where her partner lived, and where she was registered to vote, and was the person liable to pay council tax.  It was also the address she gave for service as a director of the company managing the property in which her flat was situated.  In completing and signing a form dated 25 September 2008 informing the Council of her mother’s income and capital, Ms Fremlin had twice given the London as her address.  On the first occasion the form asked for her address if different from the house.

7.	Ms Fremlin’s case as pleaded was basically that, relying on all the evidence pleaded in her Statement of Case, including a considerable amount that I have not referred to, she did occupy the house as her home, in addition to her home in London, and that the house ought therefore to have been disregarded in assessing Mrs. Thompson’s contribution.  Having considered the pleadings, I considered that before the matter proceeded to a full hearing, two preliminary issues required consideration.  I therefore directed a hearing to determine those issues, which I set out as follows:

(1)	Whether Ms Fremlin has any entitlement to challenge the registration of the charge declared by the Council on the grounds stated, there having been no appeal by Mrs. Thompson against the assessment; and 
(2)	Whether any challenge might be mounted to such an assessment even by Mrs. Thompson before the Adjudicator or whether any challenge would have to be made under the appropriate appeals procedures or by challenge in the courts.

The status of Ms Fremlin

8.	It is provided in section 73(1) of the Land Registration Act 2002 that, with certain specified exceptions, anybody can object to an application, although there is also a requirement in section 77 that they must not object without reasonable cause.  In the context of the Land Registry carrying out its administrative functions in relation to applications, this is clearly beneficial.  By way of example only, paragraph 8(2) of Schedule 6 to the 2002 Act provides that a person cannot apply under that Schedule to be registered with a possessory title while the existing registered proprietor is unable because of mental disability to make or communicate relevant decisions in relation to the application.  The registrar would have no way of knowing of such disability unless he is told.  A proprietor of an estate may be out of the country at the relevant time, and somebody may wish to object to a decision until he returns or can be notified of the application.  There are many other examples where a third party with no or no direct interest in the outcome of an application may object.

9.	So too, it was plainly appropriate for Ms Fremlin to make a reasonable objection to the Council’s application in her own name rather than, at that stage, troubling Mrs. Thompson, even if Mrs. Thompson had capacity to authorise her to act on her behalf.

10.	Once the matter is referred to the Adjudicator, however, the position is different.  The proceedings before the Adjudicator are judicial proceedings.  If the proceedings take place between the Council and Ms Fremlin, any decision would be binding as between them only.  The decision would not bind the Council as against Mrs. Thompson or her estate, even if Ms Fremlin in due course became Mrs. Thompson’s attorney or personal representative.  Nor would it bind Mrs. Thompson.  It would plainly not be dealing with matters justly, and in accordance with the overriding objective set out in rule 3 of the Adjudicator to Her Majesty’s Land Registry (Practice and Procedure) Rules 2003 (“the 2003 Rules”), to require that there should be a lengthy hearing of the relevant issues when Mrs Thompson is not a party to the proceedings.

11.	Further, if Mrs. Thompson were to be made a party to the proceedings, most probably with Ms Fremlin acting on her behalf, under a lasting or enduring power of attorney or with the authority of the Court of Protection, there would be no useful purpose served in Ms Fremlin remaining a party in her own right except possibly for the purpose of determining any application for costs following the outcome of the reference.

Whether Mrs. Thompson could challenge the assessment before the Adjudicator

12.	The Adjudicator has power under r.24 of the 2003 Rules to add or remove parties if it appears to be desirable to do so.  In order to decide what is desirable, it is necessary to have regard to all the known facts and the basis of the objection.  If it should have appeared, for example, in the present case, that the application was misconceived because there had plainly never been an assessment, so that there was clearly no power to declare a charge, then the appropriate course would be to direct the Chief Land Registrar without more ado to cancel the application on that ground.  So too, if the objection of Ms Fremlin is plainly misconceived, and there was no other apparent basis for the objection, then the appropriate course would be to order the Chief Land Registrar to give effect to the application.  In this latter case, there would be no point in adding or substituting Mrs. Thompson as a Respondent as she had made no objection and there was no apparent basis on which she could object.  It would simply force her into judicial proceedings for no good reason.

13.	The case pleaded in Ms Fremlin’s Statement of Case does not raise any arguable ground for opposing the Council’s application.  There is a statement in paragraph 9 that the Court of Appeal has held that in any enforcement proceedings [of which this is said to be one] Ms Fremlin is entitled to plead a public law breach by the Council as one of ‘its’ (presumably meaning ‘her’) grounds of resisting the claim.  Derbyshire v Akrill [2005] EWCA Civ 308 and Rhondda Cynon Taff v Watkins [2003] EWCA Civ 129 are cited as authorities for this proposition.  Those authorities do establish that in enforcement proceedings against Mrs. Thompson or her estate a relevant public law breach by the Council could be relied on.  They do not establish that it, any more than any other matter can be relied on by somebody with no right to litigate the issue in the courts – a position which Ms Fremlin is in.  Further, it is plain that the question whether the Council was right to conclude on all the facts before it when it made the assessment, after considering the case then put forward by Ms Fremlin, that she was not occupying the house as her home, does not raise any public law issue.   

14.	At the hearing before me, however, Ms Scolding, counsel for Ms Fremlin, contended that there was a public law issue, and she categorised it as being whether the Council had been “Wednesbury unreasonable” in coming to its decision as to the occupation of the house.  It was in effect said that it had placed undue reliance on certain matters such as the absence of Ms Fremlin’s name from any bills or from the voting roll which were in fact irrelevant to its consideration.  Ms Scolding also suggested that there was a public law point as to what is meant in the regulations by occupation of a property as a person’s home under the Assessment Regulations.

15.	Given the other matters to which I have referred, I doubt that it could be said that the decision was so unreasonable that no reasonable person acting reasonably could have made it.  Nor can I see that it was wrong of the Council to take into consideration whether Ms Fremlin’s name appeared on any bills.  The presence of her name would have supported her case, although its absence would have carried little if any weight against it.  There was significant other evidence against her case, not least her own previous statements, and those which she had generated on behalf of her mother, in addition to other matters relied on by the Council.  I do not have to decide this issue, however, which was not pursued by Mr. Rolfe for the Council, and I proceed on the basis that the point is not unarguable.  To determine it, I would in any event need to distinguish between the evidence that was before the Council when it made its decision and that which has been provided subsequently, and I have had no argument as to this.  I also fail to see the relevance of the possible arguments as to the meaning of the Assessment Regulations unless it could be shown also that the Council had misdirected itself as to that meaning.  I have been unable to find anything to suggest to me that, given its conclusions on the factual issues, that question was ever material.  Again, however, I proceed on the basis that the contrary position is not unarguable.

16.	It does not follow, however, that this is a challenge that should be brought before the Adjudicator.  For this to be the appropriate forum, the challenge would have to be one that could affect the question whether the charge ought to be registered.

17.	Section 22 of the 1983 Act provides as follows:

(1)	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 – 
(a)	fails to pay any sum assessed as due to be paid by him for the accommodation; and
(b)	has a beneficial interest in land in England or Wales,
the local authority may create a charge in their favour on his interest in the land.
(2)	….
(2A)  In determining whether to exercise their power under subsection (1) above … the local authority shall comply with any directions given to them by the Secretary of State as to the exercise of those functions.
(3)	…
(4)	Subject to subsection (5) below, a charge under this section shall be in respect of any amount assessed as due to be paid which is outstanding from time to time.

18.	It is this provision which it is common ground the Council rely on and which they are entitled to rely on at least if the assessment is not open to challenge.  It is also agreed that no directions have been given by the Secretary of State pursuant to subsection (2A).  Nor is any guidance given in CRAG (the guide as to charging for residential accommodation issued by the Department of Health).  Mr. Rolfe has contended for the Council that whether or not at some point Mrs. Thompson raises the issue now raised by Ms Fremlin, she had not done so when the charge was declared.  There are now, and were when the charge was declared in March 2010, sums assessed as due to be paid by Mrs. Thompson which she had failed to pay.  On that basis he contends that the charge was properly declared.  He further points out that even if one was to disregard the additional amounts assessed after taking the house into account, on the basis of Mrs. Thompson’s income alone she would have continued to be liable to contribute at the rate of £103.80 a week and that liability is one that would have amounted to around £8000 by the time the charge was declared.  The Council was therefore entitled to declare the charge to secure that uncontested and uncontestable amount that was unpaid.  Finally, Mr. Rolfe contends that the present reference, relating to the Council’s application to register their charge, are not enforcement proceedings, so as to entitle Mrs. Thompson to raise the public law issue which she seeks to raise.

19.	Ms Scolding responds that if the assessment can be successfully challenged as Wednesbury unreasonable, then it is not a proper assessment at all, even if part of the amount assessed will inevitably be payable following a fresh assessment.  She also contends that the discretion to declare a charge has to be exercised by reference to the amount which should correctly have been assessed, and not the excess which is ultimately found not to be payable.  Unless that has occurred, she says, the discretion has not been properly exercised by the Council.  There must, she asserts, be an examination of the alleged public law wrong before the charge is registered.

20.	The point of law as to the construction of section 22 of the 1983 Act has been fully argued before me, and it appears to me that I can and should determine it.  I have no hesitation in preferring Mr. Rolfe’s interpretation of it.  The purpose of the section is to enable a local authority to obtain security over land in respect of sums assessed to be paid which the person liable under the assessment has failed to pay.  The essence of Ms Scolding’s argument is that if there is any public law challenge to an assessment on the basis that there has been a justiciable error with the potential result that the assessment may be treated as a nullity, then the charge must fail, and a valid charge cannot be declared until the local authority has correctly exercised its discretion in respect of the correct amount.

21.	If Ms Scolding’s argument is correct, then it would follow that in many cases the protection of a charge could be illusory.  A public law argument could be raised, for example, where there was a simple arithmetical error which ought to have been appreciated, or where there was an issue over £10 per week in an assessment of £400 per week based on the applicability of one of the provisions in the Assessment Regulations which are highly complex and which currently run to around 90 pages.  If the charge failed, and a new assessment was then raised, taking into account the possibly minor error, a new charge could only be declared once there had been a failure to pay, by which time, the property could have been disposed of, or charged to secure funds which had then been spent or otherwise disposed of.  The local authority would have lost the security it was intended to have.

22.	I am satisfied that the wording of section 22(1) was deliberately intended to ensure that if a sum had been assessed as due and there had been a failure to pay, then the right to declare a charge arose.  In the event of a subsequent finding that the amount assessed was too much, and it was reduced, then the charge would, pursuant to section 22(4) be in respect of the reduced amount.   

23.	I do not accept in the present case that, quite apart from the house, Mrs. Thompson would necessarily have been assessed on the basis of her income in the same sum as for the first 12 weeks.  There is no evidence as to this, and it may be that she ceased to be entitled to the same amount of benefits after she had been in residential care for some time.  That is a matter which would have required further evidence had I found it relevant.

24.	I also do not accept that, where appropriate, public law issues of this kind cannot be raised before the Adjudicator just because the reference is not strictly a proceeding to enforce the charge.  Registration affects the ability of the owner to deal with her property and there may well be references where relevant public law issues can properly be dealt with.

Conclusion

25.	I therefore conclude, in respect of the preliminary issues that I directed, that on all the facts Ms Fremlin was entitled to object to the original application and to present her grounds to the Adjudicator.  For the reasons given above she has no entitlement to challenge the application further.  I further find that no challenge may be mounted to the assessment by Mrs. Thompson before the Adjudicator in relation to the application to register the charge.  I emphasise that this would not prevent her, or her estate, from raising any arguable point in proceedings in the courts to determine how much is owing by her either independently of the charge or by way of redemption action or other proceedings in due course to determine how much is secured by it.  She is not a party to these proceedings and is in no way bound by my decision.

26.	Further, I would add that, although it is not strictly part of the preliminary issues before me, it would seem to follow that Mrs. Thompson ought not to be substituted as Respondent in place of Ms Fremlin.  Additionally, even if I am wrong as to the construction of section 22 of the 1983 Act, it appears to me at present that I ought probably to direct the Chief Land Registrar to give effect to the application of the Council, and not to join Mrs. Thompson for the following reasons which arise from the issues canvassed before me at the hearing:

(1)	Mrs. Thompson is 101, and her capacity to give and continue to give authority conduct proceedings is unclear.  She is said to have lucid days, but I do not know whether she is sufficiently lucid to provide a lasting power of attorney.  The Adjudicator has no power to appoint litigation friends, and proceeding with authority from the Court of Protection is a slow and expensive matter.
(2)	Mrs. Thompson has not herself challenged the assessment.  I doubt that she should have litigation thrust on her in relation to assertions that appear to me to be weak, and which she probably lacks the capacity properly to understand.
(3)	There is nothing to stop Mrs. Thompson, or more likely her personal representatives, from raising the issues elsewhere in due course.
(4)	The charge can at best be security at the end of the day for sums which are established elsewhere, or are accepted by Mrs. Thompson or her representatives, as due and owing.  It can also be ordered to be removed from the register if it were to be proved to be invalid.
(5)	There is no suggestion of any need to deal with the title to the house before Mrs. Thompson dies.
(6)	While Ms Fremlin may expect to be Mrs. Thompson’s personal representative in due course, and may be the person entitled to her estate on her death, I have had no evidence as to this, and there is a possibility, however remote, that Ms Fremlin will die before obtaining representation.  The arguments put forward, if successful, will not in reality benefit Mrs. Thompson so much as those entitled to her estate, and it is better left to them at that time to decide how to deal with the matter.
(7)	No interest will run on the charge, and no power of sale will arise until after she has died.
(8)	Dealing with the matter justly and proportionately, therefore, it appears to me at present that the most sensible course in those circumstances would be not to involve Mrs. Thompson at this stage.

27.	I will hear counsel at a short hearing to be arranged to consider the precise terms of any order that I should make and any other applications that may be made as a result of this decision.  Notice of any such applications should be served on the other party and on the Adjudicator at least one week before that hearing.

By Order of The Adjudicator to HM Land Registry 

dated the 14th day of January 2011