Nearly Legal: Wychavon revisited

Back in October I cross posted a brilliant blog piece by Nearly Legal about the ruling in Wychavon District Council v EM [2011], which concerned whether a tenancy entered into on behalf of a person who lacked capacity, without the requisite authority from a deputyship or the Court of Protection, could create a liability for housing benefit.  In the initial judgment it was found that it did not, which potentially posed serious problems for many people without capacity to contract in supported housing.  I encountered significant levels of concern about this ruling from families and providers alike.  Happily, the judgment has been revisited, and Nearly Legal have kindly allowed me to cross post their summary from their blog.  The solution arrived at is not quite so neat and tidy as legal purists might like, but it will certainly be a relief to those reliant on supported housing schemes.

Wychavon DC v EM is a double decision, so to speak, by Judge Mark on a housing benefit matter, with broader implications regarding incapacity. In essence, EM is profoundly disabled (mentally and physically). Her parents moved her from a care home, with the support of Worcestershire CC (which also encouraged the understanding that entitlement to HB would follow), to an annex they constructed at their home. EM had previously lived in the garage at their home, but this was unsuitable as EM required round the clock care from three carers, who needed their own accommodation. EM’s parents could not afford this new arrangement without housing benefit. EM’s dad entered into a purported tenancy agreement with her for an indefinite term (hmm) at (what all agreed) was a reasonable rent. The question for the Upper Tribunal was whether this created a liability to which HB attached.

In the first decision ([2011] UKUT 144 AAC), Judge Mark held that it did not [we discussed that decision here NL]. It was a void agreement because EM’s dad clearly knew that she lacked capacity (citing Hart v O’Connor [1985] AC 1000).

However, in somewhat dramatic fashion, Judge Mark returned to the matter ([2012] UKUT 12 (AAC) – not on BAILI yet but we have seen the judgment thanks to a friend of the blog) in accordance with Rule 45(1)(a), Tribunal Procedure (Upper Tribunal) Rules 2008, which enabled him to re-open the decision if he had overlooked a legislative provision or binding authority which could have a material effect on the decision. At this hearing EM brought an entirely new ground to the table, so to speak: contracts for necessaries, either under section 7, Mental Capacity Act 1995 or the common law position as exemplified by In Re Rhodes (1890) 44 Ch D 94. And he also had the redoubtable Nathalie Lieven QC and David Blundell acting for EM (presumably pro bono, although this isn’t stated).

Although Judge Mark was in some doubt as to whether section 7 covered this matter (is the provision of accommodation “goods and services”?), he held rightly that the common law would cover this matter if the provision of this accommodation was a necessary. Wychavon argued that it wasn’t necessary because EM had previously lived in the garage and could do so again; but, as Judge Mark pointed out, that flew in the face of the evidence which had been accepted by the judge in the first tier tribunal and was in some respects uncontested.

As Judge Mark points out, HB is not only payable where a person is liable for rent but in respect of payments for the dwelling which is occupied as a home, and EM was so liable. Wychavon submitted that such matters were best dealt with through the Court of Protection. Judge Mark agreed but was also right in saying that such applications take many months and, pending that application, a person without capacity should not be left without necessaries.

There is a parting salvo because it was clear that the issue here was not between EM and Wychavon but between Wychavon and Worcestershire CC, which had effectively passed the matter on: “It is very unfortunate if that is the case, and if this series of appeals at public expense has been made necessary because of arguments between different authorities as to from whose budget essential provision should be made”.