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Cite as: [2005] EWCA Civ 308

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Neutral Citation Number: [2005] EWCA Civ 308


Royal Courts of Justice
London, WC2
16th February 2005

B e f o r e :

(Vice President of the Court of Appeal, Civil Division)


STEPHEN AKRILL & ORS Appellants/Defendants


(Computer-Aided Transcript of the Stenograph Notes of
Smith Bernal Wordwave Limited
190 Fleet Street, London EC4A 2AG
Tel No: 020 7404 1400 Fax No: 020 7831 8838
Official Shorthand Writers to the Court)


MR S AKRILL (in person) appeared on behalf of the Appellants
MS C DAVIES (instructed by Messrs Chambers & Hind) appeared on behalf of the Respondents



Crown Copyright ©

  1. LORD JUSTICE LATHAM: This is an appeal by the defendant to proceedings which took place in the Derby county court and culminated in a judgment given by HHJ Inglis on 14th July 2004. The claimants in those proceedings, and respondents to this appeal, were the Derbyshire county council as the first claimant and a Mr and Mrs Winlow, who were the second claimants.
  2. The proceedings arose out of an extremely unhappy story, which related to the illness and ultimate death of the appellant's father. Essentially, the factual background, as far as the father was concerned, can be shortly stated in this way: that he was born in June 1923 and by 1997 he was living in the house belonging to him at 147 Rykneld Road, Littleover, in Derby. In April 1997 he suffered a heart attack and a stroke, and in September 1997 he suffered a further stroke, which resulted in his being admitted to the Derby City Hospital. He was thereafter transferred to another hospital for rehabilitation in October and was discharged from that hospital into the Grange, which was a nursing home, in December 1997.
  3. The disputes which underlie this litigation arise out of his stay and the subsequent history of his care after he left the Grange. The position was that for some months he remained in the Grange, and in the beginning the fees were paid substantially by the first claimant, that is the Derbyshire county council, in circumstances to which I will return. Ultimately, the total bill for the period for which the first claimants paid was 8,547.10. In addition, as I indicated that they paid the substantial proportion of it, there was a sum which was to be paid by the appellant himself, and that was the sum of 7 a week. The total that was claimed against him was 282.
  4. The appellant's father's stay in the Grange ended in circumstances of acrimony and controversy, which, whilst they undoubtedly have infected proceedings since then, for these are not the first proceedings between these parties, are not relevant to the claims with which we are concerned, save insofar as they form the background to them. The claims which were brought by the claimants were, as far as the first claimants were concerned, the sums to which I have already referred, and various cost and interest consequences. As far as the second claimants are concerned, they relate to sums which were ordered to be paid by the appellant's father in proceedings brought against him, which related to charges incurred at the Grange, and consequential cost orders together with other cost orders in relation to the litigation between the parties, with which we are not directly concerned, save insofar as they form the basis for the sums claimed.
  5. I say that, as far as the second claimants are concerned, the claim relates to those sums, because those sums are already the subject matter of orders of the courts. But the claim against the appellant and against the estate of his father by the second claimants was a claim under section 423 of the Insolvency Act 1986 for an order effectively requiring the property which the appellant's father was living in, and which had been his property, to be re-transferred to his estate, it having been the subject of a deed of gift in November 1997 to the appellant and the appellant's sister.
  6. The first claimant's claim was not only for the sums to which we have referred, but was also for an order under section 423 in order to provide the financial basis for being able to render that particular order effective, because the appellant's father's estate is otherwise without value.
  7. The orders made by Judge Inglis, which are the subject matter of the appeal, are, first, the judgment against the appellant's father's estate in relation to the sums paid by the first claimants and which they were claiming against the estate, and, second, the orders that he made under section 423 of the Insolvency Act in favour of both sets of claimants.
  8. The grounds of appeal, which have been prepared by Mr Akrill, who has appeared in person on his own behalf and on behalf of the estate, set out in short and general form allegations, firstly, of violations of Article 6 of the European Convention on Human Rights and section 6 of the Human Rights Act 1998, and alleged errors of law on the part of the judge in his judgment and alleged errors of fact in that judgment.
  9. The allegations of breaches of Article 6 were twelve in number. The particular grounds set out in the numbered paragraphs 1 to 8 essentially related to interlocutory orders made in the proceedings, by which, firstly, his defence and counter-claim were set aside, and, secondly, he was debarred from taking part in the proceedings, as was his father's estate, by reason of their failure to meet interlocutory orders for costs that had been made in the proceedings.
  10. The allegation that the appellant seeks to make is that, as a result in a number of different respects, he was thereby prevented, both on his own behalf and on behalf of his father's estate, from being able to defend the case properly and to put forward such assertions as were material so that the consequence was that he was deprived, as was his father's estate, of a fair trial.
  11. The procedural history which is relevant starts with an application by the claimants for the counter-claim to be struck out in its entirety and that parts of the defence, which were identified in the application form, should also be struck out. The application was heard by HHJ Orrell; and, on 13th June 2002, he granted the claimant's application to strike out those particular aspects of the defence and counter-claim. The appellant was ordered to pay 1,664.44, and was debarred from taking any further steps in the action until those costs were paid. Application for permission to appeal that order was refused on paper by Rafferty J on 22nd July 2002. It was renewed orally before Harrison J, who refused permission in his turn on 21st March 2003. This court refused to consider the appellant's application to appeal that refusal, by order of Arden LJ on 21st November 2003.
  12. It was the case, accordingly, as the appellant at no stage paid any of the costs, that he remained pursuant to that order strictly debarred from playing any further part in the proceedings. Ultimately, when the matter came before HHJ Inglis for trial, the appellant was present and sought to represent both himself and his father's estate, and Judge Inglis in the judgment, a transcript of which we have not been provided with, permitted him to appear and to put forward his and his father's estate's defence. The judge at the same time refused the appellant's application for an adjournment and, again, that forms part of his complaint that there was unfairness, because he submits that the consequence was that he was unable to defend himself or put forward a defence on behalf of his father's estate fully and properly.
  13. The fact is that the procedural history to which we have referred indicates that the court provided proper case management in terms of ensuring that the proceedings were focused on what was relevant, and gave effect to the recommendations which became part of the new rules of court after the report by Lord Woolf, to the effect that courts should ensure that interlocutory orders as to costs should be made in a timely manner and not simply left to the end of proceedings, because that was capable of resulting in injustice to the successful litigant in the procedural issue.
  14. It follows that the orders were made in pursuit of a legitimate aim: to ensure proper process in the interests of justice as between litigants. The disadvantage that was visited upon the appellant was a disadvantage which was effectively one which was self-inflicted. He was required to pay costs and he failed to meet that order. There is, and cannot be, any breach of Article 6 in those circumstances.
  15. His further complaint under Article 6 relates to the proceedings themselves in that he asserts that the trial was not before an independent and impartial Tribunal. His complaint essentially is that the court was prejudiced against him, or biased against him, and that in those circumstances there was a breach of Article 6 in that respect. We can see no material which could even begin to raise an issue as to the independence or impartiality of HHJ Inglis in this case. If any proof were needed, it is the fact that the judge himself gave permission to appeal against his decision, expressing when he did so concern for the appellant's case, which one would have thought would have made it abundantly plain to the appellant that he had had as fair a trial as he could possibly have wished from that judge. It is unhappy that he should, in those circumstances, have thought fit to pursue his appeal on that basis. The other grounds which are asserted under Article 6 essentially go to the merits of the appeal, to which I must then turn.
  16. The first, as I have indicated, was that he asserted that the judge's conclusions were wrong in law and, secondly, were wrong in fact. He asserts that the judge was firstly wrong to conclude that there was any debt owing by his father's estate, or him, to the first claimants, and secondly, that the judge was wrong to conclude that section 423 of the Insolvency Act was available to either the first or the second claimants on the facts of this case.
  17. He does not, however -- although it appears that he was in his grounds of appeal -- suggest that the judge misdirected himself in law as to the terms of section 423; but he submits that, on the facts, the judge was not entitled to apply it in this case in favour of either the first or the second claimants.
  18. In order to consider those grounds of appeal, it is necessary to say something a little bit more about the circumstances in which the transaction which was challenged under section 423 of the Insolvency Act came about. It is apparent that in November 1997, that is when the father was in the hospital where he was for rehabilitation, he saw a solicitor on a number of occasions, and ultimately he entered into five separate transactions. Firstly, he made a will. Secondly, he executed an enduring power of attorney in favour of the appellant and his daughter. Thirdly, he entered into a deed of gift, which gifted the property in which he lived to the appellant and his sister, and then entered into a leaseback agreement which entitled him to occupy the premises for a period of 20 years, essentially at a token consideration. Fifthly, he made a declaration of solvency, which was undoubtedly correct at the time.
  19. The timing of that deed of gift obviously became critical to the judge's determination of the issues under section 423, but before I turn to that, it is necessary just to say more about the subsequent history which resulted in the first claimants' claim for the sum which they paid to The Grange during the period of the appellant's father's occupation of a room in that nursing home. It is unnecessary to go into significant detail through that history, but the position was that the first claimants assumed responsibility for payment of the nursing home charges in the first instance, pursuant to section 21 of the National Assistance Act 1948, which provides:
  20. "The local authority may, and must as directed by the Secretary of State, make arrangements for providing residential accommodation for persons in need of care and attention not otherwise available to them."
  21. By section 22, provisions are made for the recovery of payments so made in the following terms:
  22. "The local authority providing the accommodation shall recover from the person accommodated the amount of the payment he is liable to make."
  23. The process of assessing the right to and the amount of recovery to be made by a local authority in respect of such payments is set out in the National Assistance (Assessment of Resources) Regulations 1992. One of the Regulations deals with the question of capital in the following terms, that is Regulation 20:
  24. "As far as material, no resident should be assessed as unable to pay for his accommodation at the standard rate if his capital calculated in accordance with Regulation 21 accedes 16,000."
  25. Then, by Regulation 25, it is provided:
  26. "A resident may be treated as possessing actual capital of which he has deprived himself for the purpose of decreasing the amount that may be liable to pay for his accommodation."
  27. There is no question but that, other than the value of his property, the appellant's father had effectively no assets which could be utilised to provide for payments of the accommodation charges. However, Regulations 20 and 25 taken together make it clear that, insofar as he had or could be treated as having the value of the property, then that could and should, pursuant to the Regulations, be taken into account.
  28. In the first instance, the process of assessment was undertaken by a social worker, Patricia Boyle. The assessment she made resulted in her concluding that the appellant's father should make no payment, but that the appellant should pay 7 per week, and a financial assessment was prepared to that effect and a placement agreement was entered into with The Grange, which incorporated those terms and made provision for the way in which his pension, that is the appellant's father's pension, should be dealt with.
  29. It appears clear that Ms Boyle was aware of the fact that the deed of gift had been made in November 1997, and there is no doubt that she, at that stage, was accordingly not seeking to invoke or suggest that the first claimants should invoke Regulation 25 of the Regulations to which I have referred. However, the matter was passed by Ms Boyle ultimately to a Mrs Evans for the purposes, it would appear, although we have not been taken through the details, of a final assessment of the position, the first claimants asserting, in effect, that they were entitled to come to an interim conclusion and then ultimately to a final conclusion.
  30. The position between the time that Ms Boyle handed the matter over to Ms Evans, and the ultimate decision of the council which resulted in the claim being made is not abundantly clear, and indeed one of the matters which the judge referred to in his judgment was that neither Ms Boyle nor Ms Evans made statements or were called before him. Ms Boyle was apparently no longer employed by the first claimants and Ms Evans was ill. However, there was documentation before the court from which the judge considered he could conclude that Ms Evans had misread the date on the deed of gift as being March 1997. What is clear is that on 8th June 1999 the Benefits Agency came to the conclusion that the deed of gift should be treated as effectively a nullity for the purposes of income support calculations and, as a result of that, disallowed a claim for income support by the appellant's father.
  31. It is, and was, suggested by the appellant that it was only when the first claimant became aware of the attitude of the Benefits Agency that it decided to consider the use of Regulation 25. The judge rejected that. He concluded that the application of Regulation 25 was only considered by the first claimant when Ms Evans appreciated her mistake over the date. Ultimately the result was that what the first claimant described, and the judge also described, as the "definitive decision" was taken on 3rd August 1999, in which a Miss Matkin formally notified the appellant that the first claimant was intending to treat the deed of gift as being of no effect for the purposes of the calculation of the appellant's father's resources as a result of the application of Regulation 25, and that, accordingly, the appellant's father was liable for the sums which had been paid by the council to that date to The Grange. It was in those circumstances that the first claimant's claim came before the court.
  32. Although, as I have already indicated, the history of the appellant's father's stay and subsequent leaving of The Grange forms the background to the dispute, in a factual sense, between the parties, it is not necessary for us to go into any detail of the unhappy story which the appellant took us through. That is not intended as any criticism, because it set the scene vividly for the unhappy litigation which has resulted since the year 2000.
  33. The first complaint that the appellant makes in relation to the judge's conclusions of law is that, on the facts that we have related, the judge was not entitled to conclude as he did in paragraph 46 of his judgment that all that the judge was entitled to look at, for the purposes of determining the appellant's father's estate's liability, was the decision of the council which was notified to the appellant in August 1999.
  34. The appellant had sought to submit to the judge that that decision was in fact flawed in two important respects. Firstly, he submitted that the history of the matter made it plain that the court had in 1997 effectively determined the appellant's father's liability when Ms Boyle made the financial assessment and the original placement agreement was entered into, and that made it plain that the first claimant was accepting responsibility for the payments and was not intending to apply Regulation 25, and accordingly there was no power in the first claimant to, in effect, revisit that decision, as it has sought to do in August 1999 which is the decision upon which the first claimant's claim was based.
  35. Secondly, it is submitted that, even if there was such a power, the history of the matter is such that the decision to reconsider was perverse. The judge, in dealing with that aspect of the appellant's arguments, said:
  36. "I am persuaded also that the real questions that Mr Akrill wants to raise -- namely, firstly, whether it was open to the local authority to revisit the matter after their previous decision had undoubtedly been made and, secondly, whether in any event the revisited decision can stand as being within the scope of what a reasonable authority would decide -- are not matters for this court. The internal procedure of the local authority having been exhausted, the challenge to that decision as emerged would seem to me to be entirely a public law challenge. The arrangement under which the local authority seek to recoup their money was one under which Mr Akrill agreed to pay the assessed amounts due from him. That assessment changed and the amount due from him under the regulations changed also. If there were flaws in the decision-making and in the way in which the result of it was notified to the Akrills as there may have been on any view and as to my mind there plainly were, I do not think that it affects the amount due under the assessment."
  37. Mr Akrill's simple complaint is that the judge misdirected himself clearly as to law in that passage. He has referred us to the decision of the House of Lords in Wandsworth London Borough Council v Winder [1985] 1 AC 461, in which the question arose as to whether or not a public law defence could be raised in county court proceedings brought to recover unpaid income tax. The House of Lords considered the extent to which a rent increase claimed by a local authority landlord could be challenged by raising a public law defence to the decision to increase that rent.
  38. The House there considered the jurisprudence which had arisen out of the addition to the rules of the Supreme Court of Order 53, which made provision for judicial review, and the consequential decisions of the House of Lords in O'Reilly v Mackman [1983] 2 AC 237, and Cocks v Thanet District Council [1983] 2 AC 286. The House in the Wandsworth case made it plain that although those two cases remained authority for proper practice in general in relation to applications for relief in public law matters, they could not take away from a litigant the right to raise as a defence to proceedings an issue of public law which undermined the basis of the claim.
  39. That was followed by this court in Pawlowski (Collector of Taxes) v Dunnington [1999] STC 550 (CA), and in Rhondda Cynon Taff County Borough Council v Watkins [2003] EWCA Civ 129, again a decision of this court which reiterates the principle that, subject to questions of abuse of process in particular, the general principle is that a litigant is entitled to raise as a defence an alleged breach of public law if it affects the basis of the claimant's claim.
  40. In those circumstances, we have to consider what the consequence is in relation to the claim of the first claimants before us today. It may well be that, on a full consideration of the relevant statutory context, both statute and regulations, it will be apparent that the local authority was indeed entitled to act as it did and that there was no procedural or other impropriety which could preclude the council from relying on the ultimate assessment that was made in August 1999.
  41. But that is not a matter which we are in a position to consider on the material before us today, and, accordingly, in relation to that aspect of the first claimant's claim, the matter must be remitted to the judge for him to consider the extent to which the matters raised by the appellant, identified in paragraph 46 of the judge's judgment, are matters which undermine the first claimant's entitlement to the sum claimed.
  42. To that extent, accordingly, the appeal of the appellant and the appellant's father's estate in relation to the first claimant must be allowed. However, that is, in my judgment, the only proper criticism that can be made of the judge in the full and careful judgment which he gave in this case. In particular, when the judge proceeded to consider the provisions of section 423 of the Act, it seems to me that he directed himself impeccably. Section 423 provides, so far as relevant, as follows:
  43. "(1) This section relates to transactions entered into at an undervalue and a person enters into such a transaction with another person if --
    "(a) he makes a gift to the other person or he otherwise enters into a transaction with the other on terms that provide for him to receive no consideration.
    "(b) ...
    "(2) Where a person has entered into such a transaction the court may, if satisfied under the next subsection, make such order if it thinks fit for --
    "(a) restoring the position to what it would have been had the transaction not been entered into, and
    "(b) protecting the interests of persons who are victims of the transaction.
    "(3) In the case of a person entering into such a transaction the order shall only be made if the court was satisfied that it was entered into by him for the purpose that --
    "(a) of putting assets beyond the reach of a person who is making or may at some time make a claim against him, or
    "(b) of otherwise prejudicing the interests of such a person in relation to the claim he is making or may make ..."
  44. Section 424 identifies those who may apply for an order under section 423 in the following terms:
  45. "(1) an application for an order under section 423 shall not be made in relation to a transaction except --
    "(a) ...
    "(b) ...
    "(c) in any other case by a victim of the transaction."
  46. It follows that the judge had to consider, firstly, whether either the first claimant or the second claimants could be considered to be victims within the provisions of those sections, and, secondly, whether the claimants had established the prerequisite, that is in particular the intent now identified in section 423(3) of the Act.
  47. The judge set out the test that he had to apply at paragraphs 51, 52 and 53 of his judgment in the following terms:
  48. "51. Under Section 423 the claimants in each case have to prove, firstly, that in November 1997 Mr Akrill entered into a transaction at an under value by making a gift of his house, which is not a contentious assertion; secondly, that the transactions entered into by him for the purpose of putting assets beyond the reach of a person who may at some time make a claim against him or otherwise prejudice the interests of such a person. The orders that can be made if the above is proved are orders for the purpose of protecting persons who are victims of the transaction and a victim is a person who is or who is capable of being prejudiced by the transaction. The key matter that has to be proved is the relevant intent or purpose of Mr Akrill when he executed the Deed of Gift. I take it to be the law that what has to be determined is his subjective intent or purpose. It can be gathered or inferred from all the circumstances in the absence of direct evidence from him either as recorded in the Deed of Gift, where he did not record any relevant intention, or from what he has said on other occasions.
    "52. Nonetheless, his actual purpose has to be determined and it is not sufficient simply to look at the result, although subsequent events may be material. The intent does not have to be shown to be dishonest or fraudulent nor to have any other such qualification attached to it. It simply has to be proved to be a substantial purpose of the transaction.
    "53. The person who the donor must have in mind as the object of his relevant purpose is a person who may at some time make a claim against him. At the time of the gift the person need not be a creditor or actually identifiable but no doubt the more remote such a person is from the circumstances existing at the time of the gift, the less likely it is that claimants will be able to establish the requisite purpose in the donee."
  49. The judge then turned to consider the facts and made it plain that, at the end of the day, he had to come to a conclusion by way of inference from the facts as he found them. In paragraph 61 he set out the reasons for the ultimate conclusion that he reached. He said as follows:
  50. "I am influenced in my decision by these considerations. Firstly, Mr George Akrill was ill and having to go into a care home for an indefinite period. Secondly, there was knowledge in the family generally that a person's resources, capital resources, including their home, are called upon to pay care home fees. Thirdly, Mr Akrill had never before made legal documents but in contemplation of going into a care home, not knowing how long he would have to be there, he made five of these documents within three weeks of going into The Grange. Unfortunately there is no revealed explanation that stands scrutiny of why there should at that time have been a gift of the house to his children when at the same time he was making a Will that left the whole estate to them equally, other than to achieve some other purpose than simply making the gift, particularly since the arrangement formally was that there was a Lease-back so that in no circumstances that anyone considered would the house be sold whilst he was still alive. Fifthly, he was not a sophisticated man used to legal dealings but had a number of meetings with his solicitor during the course of which in the relevant few weeks the proposed transactions were no doubt explained to him and his instructions taken. I don't think that from his family's knowledge he would be ignorant of and not have in mind that his house could be used if necessary to fund care fees if it was available to do so and his stay in The Grange was prolonged.
    "62. Overall, I find that a real and substantial purpose of making the gift of the home to his children as and when he did was to put the house beyond the reach of people who, in the future, might make a claim against him in respect of the costs of his residential care. I find that he anticipated that those costs would be incurred on a continuing basis for an indefinite period, even though he may have harboured some hope of returning to what had been his own home and that those costs would be incurred to the homeowners for the time being and he knew that at some stage the local authority might have to become involved in providing finance if he himself had not got the means. I infer that a substantial reason for the gift was to protect the house for that purpose. It is a very common, understandable and in no way morally reprehensible reason, but a clear purpose nonetheless.
    "63. Once that finding is made, I do not think it is difficult to fit both these claimants into the position of victim within the meaning of section 423, Sub-section 5, as persons who are capable of being prejudiced by the gift. Both were, in the passage of time, likely to become involved in being owed money in respect of care home fees that they would look to Mr Akrill to pay if he had the means and his means had been diminished by the gift. It will be plain to those in court that I have not found it easy to come to the conclusion that I have expressed above."
  51. It was on the basis of those findings against the direction that he gave himself as to the law that the judge concluded as a result that he should make the orders in favour of both the first claimant and the second claimants in respect of their claims under section 423.
  52. Mr Akrill has sought to persuade us that, although he accepts that the judge directed himself correctly as to the law, he was not entitled to come to the conclusions of fact that he did. He submits that the judge essentially had entered the realms of speculation, and that his findings were not securely based upon the evidence. He makes the point that, as far as paragraph 61 is concerned, he is in any event concerned about the accuracy of that particular paragraph, bearing in mind the fact that, although the judge appears to have considered that there were five identifiable reasons, he only enumerates four.
  53. It seems to me that that was a point which was one which the appellant could and should not have made. The fact is that, on any analysis, the word "fourth" can go before the word "unfortunately" with no difficulty at all, and in any event there is no justification for an allegation that this judge, or the court, has in some way tampered with the judge's judgment, particularly bearing in mind the end of the passage, which I have already cited, which indicated expressly the care and concern that this judge had in relation to the issues with which he had to deal. I take the view that the conclusion that the judge reached was not merely one that was open to him on the facts, but that the nature of the five transactions which were entered into on the advice of the solicitor when he did, that is in November 1997 immediately before emerging into a care home environment, mean that any other conclusion could well have been perverse.
  54. In those circumstances there is, in my view, no justification, as I have indicated, for our interfering with any of the conclusions of the judge, apart from the conclusion to which I have referred in paragraph 46 of his judgment. In particular, the passages to which I have referred in paragraphs 62 and 63 make it abundantly plain that the second claimants were considered by the judge to have an independent and separate entitlement to their claim under section 423, and that claim remains valid, for there is no basis upon which the judge's conclusion in relation to their claim can be in any way vitiated.
  55. Accordingly, as far as the appeal in relation to the second claimants' judgment is concerned, that must be dismissed, and the only aspect of the judge's judgment which must be reconsidered in the light of the indications that I have given, is the question of the extent to which public law considerations provide the appellant's father's estate with a defence to the first claimants' claim for the money they paid out for the care of the appellant's father in The Grange. All the other conclusions to which the judge came were fully justified, both as a matter of law and as a matter of fact.
  56. It follows that I would only allow the appeal to the extent indicated.
  57. LORD JUSTICE NEUBERGER: I agree, and my Lord has set out the issues and his conclusions so clearly that there is no point in my giving a separate judgment. I entirely agree with what he has said.
  58. LORD JUSTICE BROOKE: I agree. It is unfortunate that the court cannot deal with the issue of public law that arose in this case, but Ms Davies has made it clear that she would prefer the matter to go back to the county court rather than the court continuing to consider the matter at an adjourned hearing with all the costs that that would involve.
  59. The problem that has arisen is this. An appropriate agreement was entered into between the relevant parties, consisting of a financial agreement and an agreement for a placement. The agreement for the individual placement was made on 19th April 1999, and was said to be subject to a condition set out in the council's current terms and conditions of accommodation in the independent sector (Residential Care Homes (Four or more Residents) and Nursing Homes for Adults). When one looks at those terms and conditions, it is clear that all financial matters shall be dealt with in accordance with Schedule 1, financial arrangements.
  60. Schedule 1 in turn provides for the council to undertake the financial assessment of all service users who apply for financial assistance to determine the level of personal or other contributions in accordance with DSS income support rules. Paragraph 8 of that schedule provides:
  61. "Where the financial circumstances of a Resident change, the Derbyshire County Council's net contribution could vary."
  62. Accordingly, in the financial agreement dated 12th April 1999, there was an express term that any change in the resident's financial circumstances would require a new financial agreement.
  63. The financial agreement originally set out figures for the weekly amounts payable to the provider, Mr and Mrs Winlow, from the council and the resident respectively. It has been explained to us in the evidence that this was initially a provisional assessment, but an assessment which was not marked provisional was in due course made by Mrs Evans, a senior finance clerk. Her calculations were set out in two documents: one a reassessment of charges from 12th April, and the other a reassessment of charges from 10th May, which were sent to Mr Akrill under cover of a letter of 14th May. Mr Akrill takes the stance that that is the assessment in accordance with the agreement, and there has been no subsequent change in the resident's financial circumstances.
  64. What happened then was that the Benefits Agency drew the council's attention on 21st June 1999 to the news that they had disallowed a claim for income support, because they were treating Mr George Akrill as still owning the property. This led to the council seeking advice from their legal services department because, as Mr Bartle said in his witness statement, slightly inelegantly, it appeared that a situation of deprivation of resources, deprivation of a capital asset, may have occurred. In due course, the council's legal services division decided that the situation of deprivation of resources, deprivation of a capital asset, had indeed occurred and that led to a reassessment of Mr George Akrill's financial position.
  65. Mr Bartle observed in his witness statement that, in any event, once income support had been withdrawn, there was a change in the financial position which would have to be reassessed.
  66. I, for my part, am extremely doubtful that there is likely to be any light at the end of the tunnel for Mr Stephen Akrill when this public law point is investigated, but we do not have the material here in order to assess the position ourselves, although I am very familiar with the arrangements by which statutory authorities can take decisions of the type that were taken by the council in July 1999.
  67. In those circumstances, since Ms Davies has preferred us to send this issue back to the county court judge rather than to retain it for further argument in this court, particularly as Mr Akrill may wish to address the judge about issues relating to the rationality of the council's decision to reassess the position under the financial agreement, I agree that the appropriate course is to remit this issue, and this issue only, to the county court. I entirely agree with what Latham LJ has said about the point that the judge was wrong not to consider the public law defence which Mr Akrill wished to be considered. It is a great pity that the issue was not identified clearly so that we could have dealt with it today.
  68. In his appellant's notice, Mr Stephen Akrill said:
  69. "1. The Judge ignored and did not take account of the Appellants' Defence to the 1st Claimant's Claims on public law grounds."
  70. When he explained the point today, Ms Davies initially wished to have an adjournment to consider it. She then in effect submitted that, if he was right about this as a matter of law, she could not resist that, although she urged us somehow or other, at any rate, to protect the position as far as the second claimants were concerned, and, as I have said, to send it back to the county court for further argument in relation to the first claimants.
  71. For these reasons, and the reasons given by Latham LJ with which I also agree, this appeal is allowed only to the extent which we have made clear in our judgment.
  72. Order: Appeal allowed on one ground only

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