Mr Peter and Mrs Caroline Jackson v Cambridgeshire County Council

Decision 390 This decision may be freely reproduced and distributed. It should be drawn to the attention of the registration and inspection staff and legal advisors Mr Peter Jackson and Mrs Caroline Jackson Appellants V Cambridgeshire County Council Respondents Tribunal sitting on 18th October 1999 at Hinchingbrook House, Huntingdon. Before: Michael Kelly   Jane Tunstill   Frank Watts Representation: The Appellants were not represented and Mrs Caroline Jackson did not appear.       The Respondent was represented by Mr Timothy Farr (Solicitor) of Cambridgeshire County Council.  DECISION It is the unanimous decision of the Tribunal that the Appellants' appeal be dismissed and that the decision of the Registration Authority cancelling the Appellants' registration be confirmed. Introduction This is an appeal under Section 15 of the Registered Homes Act 1984 against the decision of Cambridgeshire County Council on 6th April 1999 to cancel the registrations of Mrs Caroline Jackson and Mr Peter Jackson in respect of The Old Rectory, 15 Church End, Rampton, Cambridge, CB4 4AQ for the reason that the annual fee in respect of the Home had not been paid on or before the due date, contrary to Section 10(b) of the Registered Homes Act 1984. Invoice IN041462 issued on 31st December 1996 for the annual fee of £615 for the year 1997, due to be paid by 31st January 1997 was still outstanding although the Appellants did pay £20.54 towards this on the 3rd October 1997 and invoice IN64441D issued on 31st December 1997 for the annual fee of £615 for the year 1998, due on 31st January 1998 was still outstanding. Mr Jackson, on his behalf and on behalf of Mrs Jackson, accepted that the fees had not been paid but argued that they were entitled to set-off sums that they alleged the County Council owed them against the unpaid Registration Fees. The County Council had taken action in the Cambridge County Court to recover the unpaid fees but the case had been adjourned without decision. The Home now has no residents. We were told by Mr Jackson that his wife did not wish to attend the Tribunal but that she wished him to represent her. We decided to continue in her absence. The legal position We heard legal argument on the question of whether the principle of equitable set-off could apply in this case. It was argued on behalf of the County Council that Section 8 of the Registered Homes Act 1984 and regulations 5 of the Residential Care Homes Regulations 1984 required the Jacksons to pay the appropriate fee. The fee is not transferable. If it were, the purpose of the legislation would be defeated. Local Authority Circular (95)12 from the Department of Health gives guidance on the way the Registered Homes Act should be applied and enforced. It suggests that the primary objectives of the registration and inspection system are to protect the residents and maintain standards. The fees for registration and inspection which authorities must charge independent home owners are to cover the reasonable average costs of carrying out their regulatory functions. We were referred to the case of Gathercole v Smith(1881) 7QBD 626, CA which supports the proposition that where a claim is based upon a statutory right, which by the terms of the statute is not transferable to any person other than the claimant, a debt due from the claimant may not be set-off against it. It was also suggested that the case turned on the view that allowance of a set-off would have frustrated the object of the statute. Mr Jackson argued that set-off at law was historically created to prevent imprisonment as a debtor of a person not truly indebted because there was a mutual owing by his creditor. Its effect has been preserved today. The debt owed by Cambridgeshire County Council represented about half a year's income for the Appellants, hence causing serious cash flow problems. Had a further cheque been drawn for the annual bed fees this would have starved money required for caring for residents or breached the bank overdraft limit and caused eventual collapse. The claim arose in the same right. The Appellants pay CCC in order to establish care beds and if CCC fail to pay for their clients who subsequently occupy these beds it is only fair and equitable that a set-off be applied. He argued that Cambridge County Court had not dismissed his claim for a set-off but the case was adjourned without a decision being reached. Nothing in the Registered Homes Act 1984 precludes a set-off. Mr Jackson disputed the Respondent's interpretation of Gathercole V Smith. The case was very old and concerned the statutory right to an individual's pension. The object of the statute in the present case is to provide resources for CCC to regulate providers of care. They could have the cash they owed him for that. This object has not been frustrated because CCC is not acting as an agent for government. The case of Gathercole v Smith may well be relevant. Procedure We determined that we would make a preliminary decision on these submissions. If we found that the principle of equitable set-off did not apply in this case then the appeal would inevitably be dismissed because the fees had not been paid. If the principle did apply then we would go on to hear evidence. Our findings There has been a protracted commercial dispute between the parties about the payment of fees. Mr and Mrs Jackson have not paid the registration fees because they assert that an equivalent or greater amount of money is owing to them by Cambridgeshire County Council. Section 10(b) of the Registered Homes Act 1984 allows the registration authority to cancel registration if the fees are not paid in accordance with the regulations. Gathercole v Smith (1881) 7QBD 626, CA. Is authority for the propositions that a set-off should not be permitted if it would frustrate the purpose of the statute and that a debt due from a claimant may not be set-off against a claim based upon a statutory right which is not transferable. The purpose of the statute is to provide for the regulation and inspection of registered care homes. The statutory fees are intended to cover the costs of such regulation and inspection. It is clear that if such fees are not paid then the purpose of the Registered Homes Act 1984 would be frustrated. Mr Jackson referred to the registration fees as "bed fees" presumably because the amount of the registration fee depends upon the number of beds in the establishment. He seemed to think that he had to pay a fee for the care beds he established. He failed to recognise that inspection units were separate units within the local authority structure and were funded by registration fees. Neither the local authority nor the inspection unit determined the fees. They were determined by the Secretary of State. There was no relationship between the statutory fee due under the Registered Homes Act 1984 and the Appellants' claims against Cambridgeshire County Council. The case of Khan v Islington Borough Council (1999) dealt with the right of a landlord to make deductions from a home loss payment where the tenant was in rent arrears. An equitable set-off could be made where there was a relationship between the respective claims of the parties and where it would be manifestly unjust if a set-off were not permitted. (Spry, "Equitable Remedies" 5th Edition 1997) The Council had given Mr and Mrs Jackson a great deal of leeway, even taking action in the small claims court, before beginning the cancellation procedure. There has been no injustice to the Appellants. Indeed the Cambridgeshire County Council should have considered cancellation as soon as the Registration fee became overdue. By their inaction they encouraged the Appellants to think that a set-off was possible and they have done nothing to encourage the payment of fees on time. They gave the impression that the payment of fees was not an important part of the registration process. It is not a function of this Tribunal to resolve contractual disputes between parties. Such applications are a waste of public funds and might be discouraged if costs could be awarded. Finally we were prepared, with the agreement of the local authority, to allow the Appellants to pay the fees at the last moment. Mr Jackson was unable or unwilling to take advantage of this concession. We dismissed the appeal.  Mr M Kelly Professor Jane Tunstill Mr Frank Watts