ZYN, R (on the application of) v Walsall Metropolitan Borough Council [2014] EWHC 1918

Analysis

ZYN was seriously disabled and was reliant on community care services, part of which was provided by Walsall Metropolitan Borough Council (the council). She had substantial capital assets, amounting to around £550,000 deriving from compensation paid in settlement of a personal injury claim. This case concerned the statutory exceptions to the general government policy that those with assets are required to contribute to the cost of services to the cost of services they receive from a local authority.

The council had sought to charge ZYN for the full cost of social care services which she had received from the council, amounting to £271.84 per week under their charging policy for non-residential care services which stated that if a service user had over £23,250 in capital and savings they would pay the full cost of their care. ZYN contended that the council’s policy was unlawful because in calculating the amount which she had in capital the policy takes account of money derived form her personal injury settlement. She maintained that under the legislation, the council was required to disregard such capital.

The charges for Residential Accommodation Guidance (CRAG) requires a local authority to assess a person’s ability to pay for community care services under The National Assistance (Assessments of Resources) Regulations 1992. Regulation 21 of the 1992 Regulations provides that the whole of a person’s capital is to be taken into account, save that there shall be disregarded any capital, where applicable, specified in Sch 4. Schedule 4 of the 1992 Regulations set out various categories of capital that must be disregarded. These categories included at para 19:

‘Any amount which –

1. 1. (a) falls within para 44(2)(a), and would be disregarded under para 44(1)(a); or
   2. (b) of Schedule 10 to the Income Support Regulations;’

Paragraph 44 of the Sch 10 to the Income Support Regulations (Income Support (General) Regulations 1987) referred to:

1. ‘(1) Any sum of capital to which subpara (2) applies and –
2. (a) which is administered on behalf of a person by the High Court or the County Court under Rule 21.11(1) of the Civil Procedure Rules 1998 or by the Court of Protection
3. (b) which can only be disposed of by order or direction of any such court…
4. (2) This sub-para applies to a sum of capital which is derived from –
5. (a) an award of damages for a personal injury to that person;…’.

It was common ground that all the capital derived from ZYN’s personal injury settlement fell within para 44(2)(a) of Sch 10, being ‘an award of damages for a personal injury’ to ZYN. She contended that this capital was to be disregarded because it also fell within para 44(1)(a) and/or (b), being capital which was administered on her behalf by the Court of Protection and/or which could only be disposed of by order or direction of the Court of Protection.

The council contended that para 44 did not apply. First, it argued that the reference to the ‘Court of Protection’ in para 44 is a reference to the ‘old’ Court of Protection constituted under the Mental Health Act 1983 and para 44 therefore became incapable of applying to the capital derived from the settlement of ZYN’s claim when the new Court of Protection replaced the old Court of Protection on 1 October 2007. Second, it argued that where the capital derived from an award of damages for personal injury is managed by a deputy appointed by the Court of Protection, such capital is not administered by the court so as to fall within para 44(1)(a). Finally, the council contended that a significant part of ZYN’s capital did not fall within that provision as a result of para 2(a) of the order of the Court of Protection dated 19 November 2008, which authorised the deputy to withdraw a sum not exceeding £50,000 a year from the funds of ZYN for her use and benefit without needing to obtain the prior approval of the Court of Protection. They argued that the capital did not therefore fall within para 44(1)(b).

Held:

1. 1) At the time para 44 was introduced into Sch 10 to the Income Support Regulations, Parliament had already enacted the 2005 Act. It was therefore in contemplation that as soon as the commencement order was made and the relevant provisions of the 2005 Act were brought into force, the old Court of Protection would cease to exist and would be replaced by a new court which would exercise substantially similar (albeit not identical) functions and would also be called the ‘Court of Protection’.
2. 2) There was no reason to attribute to Parliament an intention that, when the 2005 Act came into force, there should be a change in policy regarding whether capital administered by the Court of Protection is to be taken into account in the means testing of benefits. There was no identifiable change in the 2005 Act which made it any less appropriate to disregard capital administered by the (new) Court of Protection when the 2005 Act came into force. It was better sense to suppose that Parliament intended para 44 to remain applicable to capital funds administered by the new Court of Protection. The term ‘Court of Protection’ was to be interpreted as meaning the body of that name which is in existence and has statutory responsibility for administering the property and affairs of persons lacking capacity at the relevant date.
3. 3) If Parliament has proceeded on the basis that an existing law has a particular meaning at the time when, if Parliament had understood the law to have a different meaning, it is reasonable to infer that it would have acted differently, that may properly be treated as an implied directive as to how a previously ambiguous law should be interpreted. It was permissible to have regard in interpreting para 44 to the fact that the reference to the ‘Court of Protection’ was left unchanged when the 2005 Act was brought into force.
4. 4) It was inconceivable that the Minister and Parliament would have left para 44 as it was and done nothing to update it if they had understood it to bear the first of these meanings and to refer to a body which had now ceased to exist. The courts interpret the language of a statute or statutory instrument as having the meaning which best explains why a rational and informed legislature would have acted as Parliament has. Attributing to Parliament an error or oversight is therefore an interpretation to be adopted only as a last resort. In the absence of any compelling indication to the contrary, it must therefore be assumed that when the 2005 Act was brought in to force Parliament left para 44 unchanged advisedly. The term Court of Protection in para 44 of Sch 10 to the Income Support Regulations was therefore apt to refer to the current Court of Protection.
5. 5) In administering a person’s property and affairs, a deputy is exercising powers delegated by the court. There was no logical reason why the question whether capital is to be disregarded should depend on whether the court administers the funds directly or by using an agent. Capital managed by a deputy appointed by the Court of Protection under the 2005 Act is ‘administered on behalf of a person by the Court of Protection’ within the meaning of para 44(1)(a).
6. 6) The council’s position on the para 44(1)(b) led to absurdity. No rational policy maker could make the right of a local authority to charge for the cost of care services dependent on the size of the amount which a deputy was permitted to withdraw and spend without the prior approval of the court at any given time.
7. 7) The only interpretation of para 44(1)(B) which made rational sense was an interpretation which treated the whole of the capital of ZYN as falling within its scope even after an order has been made which permitted a deputy to withdraw a sum of money either for a particular purpose or for the general use and benefit of ZYN.
8. 8) In conclusion, the council’s policy on charging for the cost of social services was unlawful insofar as it took account of any of the capital derived from ZYN’s personal injury settlement.

LEGGATT J Introduction [1] The claimant, whom I will refer to as ‘ZYN’, is severely disabled. She has a need for community care services, part of which is provided by the defendant local authority (‘the council’). [2] ZYN has substantial capital assets, the present value of which is about £550,000, which derive from compensation paid …

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